Colombia Communication Profile 2012

The Colombian telecom market is favourable towards foreign investors and has a regulatory framework that favours competition.

Competition livens up in Colombia’s promising telecom market

Colombia’s telecommunications could offer substantial returns for investors willing to take on emerging market risks. The outlook is promising for the country’s economy, which is estimate to grow by an average of 4.5% annually during the 2010-2020 decade.

The Colombian telecom market has been experiencing intensifying competition, increasing convergence, and the emergence of a rapidly growing broadband sector. A single Convergence Licence allows companies to offer fixed-line telephony, Internet access, broadband, and other price-added services.

During 2011, radical transformations are expected both in terms of market consolidation and in the provision of new services, with fixed-line operators ETB and Emcali seeking strategic partners and/or investors, and sister companies Telmex and Comcel combining their fixed and mobile operations.

In Colombia, both the number of fixed lines in service and the national teledensity have been decreasing. Most of the fixed telephone lines are concentrated in the larger cities, so that facilities are quite poor in small urban centres and rural areas. Nevertheless, while lower than average for South America, Colombia’s fixed-line teledensity measures up favourably with the country’s low economic indicators.

The country has some 30 local telephone providers, half private, and half owned by the municipalities where they operate. Indeed, the participation of private capital in local telephony is relatively small, though companies are gradually selling shares to private investors.

The erstwhile fixed-line market leader, Telefónica Telecom, has been overtaken by ETB in terms of fixed lines in service. The third major operator is municipally owned UNE, which has seen an increase in fixed-line customers and has been particularly active in offering bundled services. The fourth place is occupied by Telmex Colombia, which is as well steadily increasing its fixed-line market share thanks to triple-play packages.

Long-distance services were liberalised in mid-2007. To operate, long-distance providers need a Convergence Licence and a multicarrier access code.

Although the Colombian mobile market has slowed down, it holds significant increase potential, particularly in the areas of mobile broadband and price-added services. América Móvil’s Comcel is the leading mobile operator, followed by Telefónica’s Movistar and Millicom-controlled Tigo. Avantel uses iDEN technology to serve a small number of subscribers in the corporate market. UNE-EPM is the country’s fifth mobile operator, but intends to focus on mobile broadband rather than voice services.

Helped along by a regulatory framework that encourages competition and by government efforts to reduce the ‘digital divide’, broadband is growing strongly in Colombia. In fact, this is of the few Latin American nations where dominant telecom operators are obliged to provide local loop unbundling and wholesale services.

ADSL is the leading broadband technology, but cable broadband continues to grow both in subscriber numbers and in geographical coverage due to the popularity of triple-play solutions.

The cable-TV sector has undergone major consolidation and, as a result companies, Telmex and UNE, together control 90% of the market. In the satellite-TV sector, Telefónica Telecom has succeeded in gaining additional than third of the market in only three years since launching services.

Colombia’s 3G data or mobile broadband market took off in 2009, but penetration is still only about 2%. Unlike other Latin American nations, Colombian operators advertise their 3G data services as high-speed mobile Internet rather than mobile broadband due to regulations on minimum broadband speeds (1,024Kb/s download and 512Kb/s upload).

Market highlights:

• national-owned companies are up for sale: ETB, with about 26% of the country’s fixed lines in services, and Emcali, with about 7%.
• Competition will receive a further boost from number portability, to be implemented in July 2011.
• The government is raising the spectrum cap from 55MHz to 60MHz per mobile operator.
• The year 2011 promises to be a lively for spectrum bidding. An auction will be held for 30MHz in the 1.9GHz band (to be used for 3G services), and there are tender plans for spectrum in the 1.7/2.1GHz and 2.5GHz bands.
• Having won 50MHz of spectrum in the 2.5GHz-2.69GHz band, fixed-line operator UNE is rolling out Latin America’s first 4G network using long term evolution technology. Launch is expected by September 2011
• Additional than 45 companies have received access codes for long-distance telephony. New entrants have managed to fasten about-third of the international telephony market but have only eked out a minuscule share of the domestic long-distance market.
• Despite failed auction attempts in November 2009 and in August 2010, the Colombian government still hopes to award a contract for the construction of a Ku-band satellite called Satélite Colombiano (Satcol), and expects to have it in orbit by 2013.
• IPTV, offered by UNE-EPM, is attracting a rapidly growing number of subscribers.

Colombia Internet, broadband, fixed-line, and mobile statistics – 2007 - 2010

(Source: BuddeComm based on industry data)

Data in this statement is the new available at the time of preparation and may not be for the current year.

Broadband and Broadcasting Market

Helped along by a regulatory framework that encourages competition and by government efforts to reduce the ‘digital divide’, broadband is growing strongly in Colombia. In fact, this is of the few Latin American nations that obliges dominant telecom operators to provide Local Loop Unbundling and wholesale services. ADSL is the leading broadband technology, but cable broadband continues to grow both in subscriber numbers and in geographical coverage thanks to the popularity of triple play solutions. IPTV, offered by UNE-EPM, is attracting a rapidly growing number of subscribers. The cable TV sector has undergone major consolidation and, as a result companies, Telmex and UNE, together control 80% of the market. This statement provides an overview of Colombia’s Internet, broadband, and pay-TV markets, accompanied by relevant statistics, analyses, and broadband scenario forecasts for the years 2010, 2015 and 2020.

Fixed-Line Market & Infrastructure

In Colombia, both the number of fixed lines in service and the national teledensity have been decreasing. Most of the fixed telephone lines are concentrated in the larger cities. The country has some 30 local telephone providers, half private, and half owned by the municipalities where they operate. Indeed, the participation of private capital in local telephony is relatively small, though companies are gradually selling shares to private investors. Telefónica Telecom has been overtaken by ETB in terms of fixed lines in service. The third major operator is municipally owned UNE, which has seen an increase in fixed-line customers and has been particularly active in offering bundled services. The fourth place is occupied by Telmex Colombia, which is as well steadily increasing its fixed-line market share thanks to triple-play packages. This statement provides an overview of Colombia’s telecom infrastructure, together with profiles of amount major and some minor fixed-line operators, accompanied by relevant statistics, analyses, and fixed-line scenario forecasts for the years 2015 and 2020.

Mobile Market

lthough the Colombian mobile market has slowed down, it holds significant increase potential, particularly in the areas of mobile broadband and price-added services. The government is raising the spectrum cap from 55MHz to 60MHz per mobile operator, and the year 2011 promises to be a lively for spectrum bidding. An auction will be held for 30MHz in the 1.9GHz band (to be used for 3G services), and there are tender plans for spectrum in the 1.7/2.1GHz and 2.5GHz bands. Having won 50MHz of spectrum in the 2.5GHz-2.69GHz band, fixed line operator UNE is rolling out Latin America’s first 4G network using long-Term evolution technology. Accompanied by key market statistics and analyses, this statement provides an overview of major developments in the market and brief profiles of amount mobile operators. The statement as well contains scenario estimate for the mobile telephony market for the years 2010, 2015 and 2020.

Telecom Market Trends

Colombia’s telecommunications could offer substantial returns for investors willing to take on emerging market risks. The outlook is promising for the country’s economy, which is estimate to grow by an average of 4.5% yearly during the 2010-20 decade. The Colombian telecom market has been experiencing intensifying competition, increasing convergence, and the emergence of a rapidly growing broadband sector. During 2011, radical transformations are expected both in terms of market consolidation and in the provision of new services, with fixed-line operators ETB and Emcali seeking strategic partners and/or investors, and sister companies Telmex and Comcel combining their fixed and mobile operations. Competition will receive a further boost from number portability, to be implemented in July 2011. This statement provides an overview of Colombia’s telecom sector and regulatory environment, accompanied by statistical data, analyses, and outlook.