SLOWLY BUT SURELY

Colombia 2020 | TELECOMS & IT | FOCUS

Colombia has taken important initiatives in recent decades to promote digital transformation, including plans to ensure that the opportunities and benefits of digitalization are shared throughout the economy and across all segments of society.

Since the beginning of the 21st century, Colombia has been expanding rapidly and reaching higher standards of living. Between 2008 and 2017, real GDP grew by an average of 3.8%, more than double the OECD average at 1.7%. Besides, Colombia's growth rates have been among the highest in the Latin America and Caribbean (LAC) region.
This growth was directly fueled by digitalization and digital technologies, enabling businesses of all sizes to manage production across different locations and connect to global value chains. On the back of digital transformation, Colombia has diversified from a commodity-based economy into a high value-added services one; as of 2019, the service sector accounted for 70% of the workforce and 60% of GDP. Government spending and initiatives have been the main growth drivers. Not only has the government introduced reforms to reduce informality and improve the business environment, it has also invested in the deployment of high-speed broadband infrastructure and digital government services.
According to the OECD, average growth rates of fixed (9.4%) and mobile broadband subscriptions (24.9%) in Colombia between 2012 and 2018 were among the highest in the OECD; however, the country's fixed and mobile broadband subscriptions per 100 inhabitants in 2018, at 13.4 and 52.1, respectively, were the lowest. Likewise, the average download speed (3.48Mbps) and the share of fiber connections (13%) are lower than the OECD average. The country is also behind in overall internet usage, with 64% of the population using the internet in 2018. This is due to a combination of factors such as Colombia's geography, the armed conflict, and sparsely populated areas. Despite all that, Colombia's digital transformation has been nothing short of phenomenal. The Juan Manuel Santos government increased internet coverage from 24% of municipalities in 2010 to 98% in 2018. And President Iván Duque has pledged to connect 100% of municipalities to the internet by 2022. Under Santos, Colombia introduced the Live Digital initiative, which included plans to adopt broadband coverage around the country, and the Duque government under has promised to continue this process with a new plan. Dubbed The Digital Future is for All, it aims to promote the digital transformation of society, close the digital divide among individuals, businesses, and territories, and foster financial inclusion.
The government has also put forward a Pact for the Digital Transformation of Colombia 2018-2022, which is part of the National Development Plan (PND). The main targets are to connect 70% of households to the internet, up from 50% in 2017; ensure 50% of households have fixed internet, up from 38% in 2017; provide 32 million internet connections with download speeds of more than 10Mbps, up from 15 million in 2017; increase the number of 4G mobile internet subscription to 27 million, up from 12 million in 2017; and offer 3.57 million training courses on digital skills, up from 2.39 million in 2017.
Two of the greatest challenges that the government seeks to address is lack of competition in the telecommunication sector and the lack of basic computer skills. For perspective, a fixed high-consumption internet package in Colombia costs 2.5 times the average in other countries. Fortunately, high prices will soon be a thing of the past.
Talking to TBY, Minister of Information Technologies and Communications Sylvia Constaín stated the government's policy under the Law of Modernization of the ICT sector (Law 1978 of 2019) has “changed from maximizing financial income to maximizing social wellbeing. In 2019, not only were we able to modify the legal framework, we also established a convergent regulator. This was one element that the OECD was particularly insistent on. Notably, we set up the entire spectrum allocation process within a couple of months. We created free internet zones across the country. Currently, there are 1,000 of them in rural areas and 870 in urban areas."

Moreover, while noteworthy progress has been made in regard to the adaptation of the educational system and labor market for digital transformation, the government needs to direct more investment to education and lifelong learning to meet the challenges of the digital economy.