Colombia - Telecoms, Mobile, Broadband and Forecasts

The Colombian telecom market has been experiencing intensifying competition, increasing convergence, and the emergence of a rapidly growing broadband sector. The years 2011/2012 have brought significant changes to the country'stelecom environment, with major companies consolidating their fixed and mobile operations, the launch of several MVNOs, and the arrival of 4G/LTE technology, among others.

Although reasonably well developed in the main business centres, Colombia's telecom infrastructure is quite poor in small urban centres and rural areas. Many remote municipalities – especially in the Amazonian region – lack any kind of telecom infrastructure.

Fixed-line teledensity is only 15%, yet the number of lines in service continues to decrease, with customers opting for alternative technologies and mobility in preference to traditional phones. Colombia has about 25 local telephony providers, operating municipally, regionally, or nationally. Many of these started as private companies, but later became public concerns owned by their respective municipalities. The trend is gradually changing, with more companies selling shares to private investors. Despite the large number of local operators, around 83% of the customer base is served by four major companies: Movistar (previously Telefónica Telecom), ETB, UNE-EPM, and Claro (previously Telmex).

Numerous companies have received access codes to provide long distance telephony. Competitive carriers have gained 31% of the international long distance market – Infracel, with a 26% share, has proved by far the most successful. In the Domestic Long Distance (DLD) market, however, competitive carriers have managed to eke out only a 4% share.

In the mobile market, Colombia's penetration has only just reached the 100% milestone – well behind other Latin American countries such as Chile, Brazil, and Argentina where, on the other hand, GDP per capita is also much higher than in Colombia.

Three mobile network operators dominate the Colombian mobile market: Claro (previously Comcel), Movistar, and Tigo. The leader is Claro, with a 64% market share, but its subscriber base has been shrinking since the introduction of Mobile Number Portability.

By end-2012, there will be six MVNOs in Colombia. Uff! Móvil, UNE-EPM, ETB, and Emcali offer mobile voice and internet services over Tigo's network, while Metrotel and Virgin Mobile have entered into wholesale agreements with Movistar.

UNE-EPM has launched a 4G/LTE network in Bogotá and Medellín – this is Latin Americas sixth commercial LTE offering. The government has scheduled an LTE spectrum auction for September 2012 and hopes to attract both existing and new players.

Though slightly below the regional average, Colombia's fixed broadband penetration is higher than would be expected given the country's low economic indicators. Helped along by a regulatory framework that encourages competition and by government efforts to reduce the 'digital divide', the fixed broadband market continues to register double-digit growth rates.

The Colombian government has launched several initiatives to increase fixed broadband penetration, including Computers for Schooling (which provides refurbished second-hand computers to schools), Compartel (which endeavours to provide every Colombian with access to telephone and internet services), Vive Digital (which aims to increase Colombia's internet connections to 8.8 million by 2014), and the National Fibre Optic Project.

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. The market is divided between UNE-EPM (ADSL and cable modem services), Claro (cable modem), Movistar (ADSL), and ETB (ADSL).

The cable TV sector has undergone major consolidation and, as a result, two companies, Claro and UNE, together control 89% of the market.

Estimates for 2012 indicate sustained growth in the mobile broadband, fixed broadband, and satellite TV sectors. The number of fixed-lines will continue to contract. We expect the number of mobile subscribers to increase by 4% only, as many of the wealthier citizens already have two or more mobile phones, while a large percentage of the population cannot afford even one.

Key Developments

- Mobile number portability, launched in mid-2011, has seen more than 300,000 subscribers port their phone number
- Telefónica's fixed and mobile operators have merged and unified their operations under the Movistar brand
- AméricaMóvil is unifying – but not merging – the operations of Telmex and Comcel under the Claro brand name
- ETB no longer seeks privatisation, but plans to achieve economic recovery through mobile telephony, broadband, and cable TV. The regulator has further lowered termination charges for fixed-to-mobile calls;
- The National Television Authority (ANTV) has taken over from the previous television regulator, the National Television Commission (CNTV).There are 1.3 million Colombians subscribed to mobile broadband, and the number is growing by 23% a year
- In the second half of 2012, Colombia will become the second Latin American country (after Chile) to enjoy Virgin Mobile'syouth-focused MVNO services.
- UNE-EPM is planning to expand its LTE network to Colombia's major cities; other LTE launches are expected to take place following the upcoming award of LTE licences
- With an investment of US$600 million, Colombia's National Fibre Optic Project aims to deploy over 15,000km of fibre cable
- By 2014, fibre-optic cables should reach 1,078 or 96% of Colombia's 1,123 municipalities.

Report Scope

This annual report provides a comprehensive overview of trends and developments in Colombia's fixed-line, mobile, broadband, and pay TV sectors. Subjects include:

- Market and industry analyses and overviews
- Facts, figures, and statistics;
- Government policies affecting the telecoms industry
- Telecom infrastructure
- International satellites and submarine fibre optic cables;
- Major players, revenues, subscribers, mobile ARPU
- Fixed broadband (ADSL, cable modem, wireless)
- Internet, VoIP, IPTV
- Convergence and triple play solutions
- Pay TV market
- Mobile voice and data markets
- Next generation mobile (3G, 4G, mobile broadband, LTE)
- Scenario forecasts for the fixed-line, mobile, and broadband markets for the years 2015 and 2020