Panama is emerging as an IT hub in Latin America, and the regulatory frameworks that guide the sector are evolving to keep up.

Edwin Castillo
Director of Telecommunications
National Authority of Public Services
Roberto Melo

The telecommunications industry in Panama generated revenues of almost $1 billion in 2013. How would you evaluate this figure, and what are your expectations for the next few years?

EDWIN CASTILLO Figures will keep growing, despite the fact that 2014 has been difficult for operators. Still, they have worked in an excellent manner with the regulatory authority. We have involved them in all of our policies and have taken into consideration their needs so as not to negatively impact their business activities. They have invested large sums of money over the past year to keep improving. One operator actually invested $50 million to improve its own systems. Total industry income is set to exceed $1 billion, although the number of cell phones is not going to increase. However, we are going to improve and grow in terms of speed and services. We expect a growth rate of around 1.5% or 2% in 2014.

ROBERTO MELO Many technology companies are providing new international services like cloud services, with investments doubling in size in data centers and hosted technology, because of connectivity. I have had meetings with international providers, such as Google, which are considering placing cloud services in Panama that are capable of serving other areas around Panama. There is great potential for growth, and because of the connectivity of the country, there is great potential to locate those services here. CAPATEC is working with the government to create and improve the legal framework to attract this type of investment, and we are having great success in this regard.

What have been the most important advances in the telecommunications sector over recent years?

EC Basically, one of the key advances has been the improvement of digital broadband, which has experienced huge growth. We have also been working with the four telephone operators to ensure their services are more flexible and that they improve the offering quality, particularly in terms of speed. We have introduced the digital dividend band, which allows us to develop LTE systems. This brings us a higher speed in terms of mobile data. The country has experienced significant growth in terms of cellular networks. We have had a problem over the past years in terms of cellular towers; however, we have now introduced legislation whereby operators share the same towers. This means the country is not crowded with towers, whereby we can avoid the visual impact they provoke.

RM Panama has excellent internet connectivity, and that is thanks to its geographic location. As a result, Panama stands out as an excellent location for data centers that can provide cloud services. Also, the “Internet for All" initiative has provided internet access to 1.6 million Panamanians, and more than half are registered. Furthermore, internet access is free in most parts of the country, including schools. As for mobile connectivity, we have heavy competition with four carriers, and that wealth of choice means we have some of the cheapest internet rates, and also the highest penetration of smartphone devices in Latin America. In fact, we probably have even greater penetration per capita than the US. This also means that Panama is a great environment to test and launch new ideas and initiatives in, making it a cheap place to experiment with, and introduce innovative technologies. According to the World Economic Forum Network Readiness Index, which measures the impact of technology in businesses, government, and society overall, Panama ranks 46th in the world. This is an improvement from the previous index where the country was ranked 59th, an improvement of 13 places from 2013, and another 13 steps up from 2012. Clearly, our country is rapidly improving in terms of ICT. Panama has a lot of the dynamics that a country, such as Singapore, has in terms of attracting investment to make the country a regional hub for ICT.