The purpose of this report is to provide an overview of the major developments in the telecommunications industry in Colombia. This report also makes special reference to certain high growth areas such as mobile telephony services, Internet subscription services, and the television industry. These sectors have seen particularly high growth in recent years, with companies continually investing in new technologies and offering new services to clients.
Despite the economic downturn at the end of 2008 which has affected developed economies and emerging markets such as Colombia, the telecommunications sector , has not suffered as much as other sectors of the economy and continues to present positive growth figures. While GDP growth for the Colombian economy declined from 7.5% in 2007 to 2.5% in 2008, the telecommunications sector continued to show a healthy growth rate of 6.4% in 2008, down from 15.7% in 2007.
The telecommunications industry in Colombia has enjoyed rapid growth in recent years on the back of new technologies and value added services. Current data indicates an orientation of the telecommunications market towards competition based on services which are provided in multimedia or convergence modes.
In order to maintain business in a highly competitive market, operators have been increasingly offering bundled services with attractive rates for consumers, in which Internet access and other value added services are included.
Studies by the Telecommunications Regulatory Commission (CRT) (http://www.crt.gov.co), highlight an increasing use of mobile telephony in the provision of Internet access, combined with voice services. For mobile phone operators the current trend is to offer Internet mobile services.
Mobile phone subscriber numbers have surged, with mobile phones becoming the primary method of communication, both in rural and urban areas. According to the World Economic Forum report on ICT, Colombia ranks above the world average in the connectivity index. After lagging behind countries such as Venezuela and Ecuador for years, Colombian mobile phone penetration has now surged to approximately 70 percent, the highest in the region. Behind the growth have been new entrants to the market, such as Spain's Telefonica and the Mexican group Telmex, which owns Colombia's leading mobile phone operator, Comunicaciones Celulares (Comcel). Telefonica is the number-two player in the mobile phones market, which in 2004 took a controlling stake in Colombia Telecom, the country's leading landline provider.
The telecommunications industry has been a leading sector in terms of foreign direct investment in Colombia. Telefonica is currently one of the largest foreign direct investors in the country. In order to increase traffic and the number of subscribers, companies have been offering more attractive services to customers, such as packaged services. Colombia Telecomunicaciones (Telefonica) is the market leader in long distance telephony. However, traditional local and long distance phone services have seen low or even negative growth rates in recent years. In general, in recent years, the market has been moving towards increased competition and increased efficiency, which has resulted in price reductions to consumers. Indeed, the key to remaining competitive in this market is continual investment in infrastructure and new technologies.
By Gabriel Ramjas