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Colombia telecoms market: 4G mobile services to grow fast during 2013
Colombia - Telecoms, Mobile, Broadband and Forecasts - a new market research report on 2014-04-24 04:43:01
We estimate that the fastest growing sectors in the Colombia telecoms market in 2013 will be 3G and 4G mobile services, satellite TV, and fixed broadband. The fixed-line sector will continue to stagnate or contract. The mobile telephony sector appears to be facing early market saturation: many of the wealthier citizens already have two or more mobile phones, while a large percentage of the population cannot afford even one.

Investment potential

Colombia is included in a group of up-and-coming nations (dubbed CIVETS) touted as hot markets because of their large potential returns. Hoping to attract tourism and foreign investment, the Colombian government is trying to shake off the country´s image as a trouble spot. In fact, according to some economic analysts, Colombia is becoming the hidden investment gem of South America.

Market consolidation

For several years, the Colombian telecom market has been experiencing mergers, intensifying competition, and increasing convergence. The cable TV sector, in particular, has undergone major consolidation and, as a result, two companies, Claro and UNE, together control 89% of the market. Claro and Movistar have consolidated their mobile and fixed-line businesses, and further consolidation and changes of ownership are expected, with Millicom International Cellular and municipally owned EPM involved in negotiations aimed at merging their fixed and mobile operations – respectively UNE and Tigo.

Fixed-line market

Fixed-line teledensity in Colombia is only 13.5% and well below the Latin American average, yet the number of lines in service continues to decrease steeply, with customers abandoning traditional phones in favour of mobile handsets. As in other Latin American countries, most of the existing fixed telephone lines are concentrated in the larger cities, leaving the rest of the population under-serviced.

Fixed-line operators

Colombia has about 20 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 leading fixed-line operator in terms of lines in service is ETB, controlled by Bogotá´s local government. Telefónica´s Movistar is the second largest provider. UNE-EPM, owned by the municipality of Medellín, occupies a close third place. Telmex Colombia, which has adopted the brand name Claro, has a rapidly growing market share thanks to the growing popularity of its triple play services.

Broadband market

Colombia´s broadband penetration is far higher than would be expected based on GDP per capita, which is quite low in Colombia. ADSL is the leading broadband technology, but cable broadband has been regaining much of its lost market share, growing at a healthy rate both in subscriber numbers and in geographical coverage. The resurgence of cable modem is largely due to the growing popularity of triple play bundles including broadband, telephony, and cable TV.

Broadband players

Colombia´s leading broadband players are fixed-line operators Claro, UNE-EPM, Movistar, and ETB. Claro provides cable modem access, UNE offers both ADSL and cable modem services, while Movistar and ETB use ADSL technology.

National broadband plans

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 (involving projects that subsidise internet access for schools, low-income households, and rural areas), and the National Fibre Optic Project.

Mobile market

Although below the regional average, Colombia´s mobile penetration is quite high compared with the country´s relatively low economic indicators. While the market has slowed down, it still holds significant growth potential, particularly in the mobile broadband sector where penetration is still very low. The years 2010-2013 have brought significant changes to the Colombian mobile environment, with the launch of several MVNOs and the arrival of 4G/LTE technology, among others.

Mobile Network Operators

Three Mobile Network Operators (MNOs) dominate the mobile market: Claro, Movistar, and Tigo. The leader is Claro, with a 61% market share, but its subscriber base has been gradually shrinking since 2009. Local trunking service provider Avantel serves a small number of mostly corporate customers using digital iDEN technology. UNE operates a 4G/LTE network in six Colombian cities.

Mobile Virtual Network Operators

Colombia has six Mobile Virtual Network Operators (MVNOs), with UNE being both an MNO and an MVNO. Uff! Móvil, UNE, ETB, and Móvil Éxito offer mobile voice and internet services over Tigo´s network, while Metrotel and Virgin Mobile have entered into wholesale agreements with Movistar.

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