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Colombia Broadband Access Services Market
Frost & Sullivan, Sep 2005
Improving Social and Political Milieu Fuel Subscriber Base and Drive the Colombian Broadband Access Services Market
The Colombian broadband access services market has shown a positive trend in the past and is expected to continue doing so in the future as substantiated by the accelerated growth rates for digital subscriber line (DSL) broadband services in 2004. Moreover, the Colombian economy experienced a gross domestic product (GDP) growth of 3.9 percent accompanied by an enhancement of the social and political picture. These factors along with the introduction of new wireless technologies such as wireless fidelity (Wi-Fi) and platforms as well as pre worldwide interoperability for microwave access (pre-Wimax) are facilitating easier deployment of networks and access to the services.
This Frost & Sullivan study analyzes the current and future market potential for broadband access services in Colombia and includes an analysis of nascent technologies in Wi-Fi and WiMax platforms. While profiling the strengths and weaknesses of each company in this space, this study also proffers a discussion of the marketing strategies of operators.
Rise in Online Users Secures a Steady Future for the Broadband Access Services Market
'Colombia is the third largest market in Latin America in terms of population with more than 45 million inhabitants yet, its Internet density is only 8 percent,' according to the analyst of the study. 'Internet access in Colombia began only in the mid-1990s when large education institutions such as the University of Los Andes integrated Internet access to their facilities therefore, the low penetration rates offer more opportunities for growth in this space.'
The government and private sector programs intended to increase access to IT - such as Compartel, on-line government, and the program of Internet mass - were developed by Empresas Publicas de Medellin (EPM) in collaboration with Hewlett Packard (HP). Despite being the venue of such promise, the competitive landscape in the Colombian broadband access services market continues to be fragmented. This is caused chiefly by incumbents leading the way in terms of customer base with DSL and cable operators dominating the broadband scene. An additional element, which has resulted in the market fragmentation, is the entry of new participants operating in local markets that also operate in specific segments and niches.
The Colombian Government’s Regulations Promote Widespread Adoption of Broadband Access Services
The ministry of communications and the regulation commission of telecommunications (CRT) are engaged in developing a project for the promotion and mass adoption of broadband services through promotion and demand policies. The promotion policies for service providers advocate consolidation of a competitive market structure in the broadband access services space and the development of new technologies such as wireless and power line communications (PLC), among others. They also includes a study of the value chain of this market to create favorable conditions for mass operations and the elements needed for creating interoperating conditions. The demand policies, however, focus on information campaigns on the advantages of using broadband systems, creation of a broadband culture in the educational sector, and promotion of IT education.
'According to the CRT, the promotion and massive adoption of broadband program is likely to start at the end of 2005,' notes the analyst. 'This program will have a positive impact on the Internet and broadband development in the country and will be one of the most important drivers of the adoption of broadband access services in Colombia.'
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