Colombia

DEVELOPMENT OF TELECOMMUNICATIONS IN COLOMBIA AND REGIONAL SURROUNDINGS

The evolution of the telecommunications sector in Colombia in 2006, was framed within a context of competition with the purpose of absorbing the fast technological and economic changes. Within these changes, one is the tendency convergence of telecommunications, that suggests that the user receive by same means different communication services like (television, telephony, Internet, etc.). The result of this integration of services for the users, is a costs diminution, different payment modalities, better quality and added value, among others.

The annual study made by the Research center of Telecomunicaciones (CINTEL) about the telecommunications sector, displayed during the XXI National Congress and the XII Andean of Telecommunications Andicom 2006, reveals that the sector grew 17% with respect to the 2005 and that the movable telephony is the most dynamic segment, becouse of its ample range of services and the fast adoption of new technologies. According to this study, the propietary companies of the networks of local telephony presented a slight rise of 0.4% with respect to the previous year, explained mainly by the use of their infrastructure for the broadband and access services benefit, constituting an income source alternative. Following this same report, year 2006 stood out by the strategic alliances that show the tendency of the operators towards the diversification, the generation of competition in services of value added on the part of the television operators and the reduction of the cost of the long distance due the masificación of the movable telephony promoting the system of calls through solutions based on IP.

According to data of the Ministry of Communications, the cellular movable telephony continues with its fast dynamism and expansion, constituting itself in the segment with greater income of the sector, which responds mainly to the diversification of services offered by the movable operators (text messages, audio, images, among others), besides attractive prices and plans and, the implementation of new technologies, which allow them to improve the quality of served. As far as the market of broadband, this one presents a continuous and fast growth, which demonstrates the progressive effect of technological substitution, due the migration of users from access exchanged towards the broadband services, as result of better conditions of speed and tariffs.

TENDENCIES AND PERSPECTIVE OF THE SECTOR

In general, the telecommunications sector is in a constant change and adaptation to the technologies and developments, situation in which gradually the operators renew and expand their networks to offer greater speeds of access and new services.

As it has been presenting in the country for some time, the clear tendency of the sector towards the services convergent and the Networks of New Generation – NGN continues. The offer of packs like double play and triple play are more and more popular offering video, voice and data on a same platform. It is expected that in the short time limit the sector start with the offering of given of the called quadruple play, integrating to the offering of services packaged before described the mobility by means of the utilization of wireless systems.

MOBILE PHONE SYSTEM TO REGIONAL LEVEL

According to the data reported by the Department of Communications users, it is estimated that for the year 2006 Comcel presented the greater quantity of credited in so much service in the Atlantic Coast, as in the West and East of the country, followed by Telefónica Móviles and Colombia Móvil respectively. In fact, Comcel in the period analyzed possessed the 68% of them credited of the region oriental, while Telefónica Móviles had the 25% and Colombia Móvil the 7%. Said tendency is similar,in the western region, where the percentage distribution is the 66%, 26% and 8%, as well as in the Atlantic coast, where the same one equals al 63%, 23% and 11% respectively.

MOBILE APPLICATIONS

The new terminals with which is possible so much the broadcast of voice as of data utilizing technologies like WiFi and solutions based on IP, were the ones that had greater boom in the mobile market during the 2006, year in which they were sold in the world 327% most mobile than in the 2005 with technology WiFi being reckoned that for the 2010 this figure will enlarge in 1300%. At the same time, the traditional mobile terminals, that are characterized only by the broadcast of voice, they increased their sales in only a 15%. The multimedia terminals are utilized to take pictures, to listen music, to see videos and television and even to play with 3D Graphics, by which the multimedia mobile phone system has become the equivalent one to a portable PC with modem, which at the fact to be online to Internet, they can integrate in a single terminal technological large quantities of information that can be consulted and stored. 94% of the billing of the users of mobile phone system stems from the calls of voice, this tendency is changing and the operators of mobile phone system are offering new services of data.

Bogotá D.C., Agosto 2007 - No. 9 Comisión de Regulación de Telecomunicaciones República de Colombia http://www.crt.gov.co

INTERNET EVOLUTION IN COLOMBIA

INTERNET

In Colombia, just as in the entire Latin American region, a growing trend seeks to substitute switched accesses with broadband connections. The number of subscribers is estimated to reach approximately 900.000 by the end of 2005, which equals 4,7 million users in the entire national territory.

BROADBAND

Broadband penetration in Colombia presents significant growth, reaching approximately 151% in 2005 increasing the number of dedicated subscribers from 127,113 in December of 2004 to 318.863 in December 2005. Notwithstanding the foregoing, penetration of Internet is still low by comparison with other Latin-American countries (0.67% by December 2005).

According to the previous graphs, cable is still the most widely used technology in the country, but this trend has been changing with the mass use of xDSL, which grew 93% from June 2005 to December 2005. If this trend continues, a balanced distribution of subscribers among these two technologies can be expected by the end of 2006.

WIRELESS TECHNOLOGIES

Wireless technologies (WiFi and Wimax) are seen as tools to reach more penetration of the broadband services. The use of these technologies has generated business opportunities. In the cities of Bogotá and Bucaramanga, some companies provide broadband access using wireless media, in direct competition with traditional broadband operators and with those who provide solutions for the corporate sector. In Colombia WiFi can be provided freely and it is offered mostly to private entities. Recently a Pre-Wimax Metropolitan Area Network was deployed in the fifth major city of the country (Bucaramanga); the impact of this in the broadband penetration of is to be seen. As regards to Wimax, although its application standards have not been fully tested, WiMax technology access could represent an important source of income in Latin America for both operators currently offering broadband access through other technologies, and for new players interested in participating in this business. New initiatives for the installation of networks using this technology in different countries in the region8 have been developing recently, mainly with the goal of taking broadband to isolated regions. To this effect, regulatory bodies and electromagnetic spectrum administrators have been implementing actions geared at the assignment of this resource to the provision of broadband wireless services. Regulatory activities involving this matter are varied and range from the free use of frequencies such as approved by COFETEL in Mexico, where a restriction limiting its use in closed environments was eliminated to promote investment in this technology, to processes such as the one currently underway In Colombia, the provision of telecommunications services supported on Wimax is subject to a license authorizing the use of the spectrum. The Ministry of Communications established that there would be three licenses with national coverage and two licenses per region, so there can be five licensees operating in each region, competing among them and with the providers of broadband services supported in cable and xDSL. In order to favor competition, those who have licenses with national coverage cannot apply for licenses with regional coverage.9 The Ministry of Communications established the requirements to acquire licenses with national coverage. The most relevant are the requirements of having license for providing TPBCLD services and having license for providing Value Added services. Given that just three Wimax licenses with national coverage will be granted and there are only three legal operators of TPBCLD, these three operators will be the only three providers of Wimax broadband services with national coverage. These three licenses were granted in January 2006 and the roll out of the networks is in process. Two of those three were already providers of broadband using cable or xDSL. This raises questions regarding the real impact of this licensing process in improving competition in the broadband market. Additionally, the Ministry of Communications decided to grant national licenses for use of the electromagnetic spectrum to the three legally qualified long-distance operators, creating in this way the possibility of competition within operators who already own infrastructure, and also with other operators, by the assignment of two additional licenses in each region of the country.

Bogotá D.C., 26/06/06, Colombian TC Sector.pdf

Comisión de Regulación de Telecomunicaciones República de Colombia

http://www.crt.gov.co

Colombia mobile phone lines rise 26.5% to 27.7 mln in 2006

BOGOTA (MarketWatch) -- The number of mobile telephone lines in Colombia rose to 27.7 million in 2006, up 26.5% from a year earlier, when 21.9 million mobiles were operating, the country's consumer protection agency said. The expansion of mobile phone lines was slower than in 2005, when the number of lines jumped twofold, because the market is gradually reaching saturation, said a telecommunication official at the agency. However, the number of mobile phone lines as reported by the agency was 5% lower at the end of 2006 than at the end of the third quarter, when it reached 29.2 million. The decline is because of a change of methodology: in the fourth quarter, the agency only took into account lines that have reported at least one phone call during the previous three months, Tulio Angel, president of the mobile industry group Asocel, said. "There are plenty of phones that were bought last year, but reported no phone calls in that period. Those cell phones no longer count," Angel told Dow Jones Newswires. Comcel, the Colombian unit of Mexico-based America Movil SA (AMX), controlled the biggest slice of the market, with 17.80 million lines, followed by Spain's Telefonica SA (TEF) with 7.75 million lines. Colombia Movil SA, the local unit of Millicom International Cellular SA (MICC), came in third with 2.15 million lines, the consumer protection agency said. In terms of sales, the Colombian Telecommunication Regulator estimated that mobile phone companies' sales reached 7.24 trillion Colombian pesos ($3.21 billion) last year, far surpassing fixed-lines operators' sales, which likely topped COP2.36 trillion in 2006. "The outlook of the Colombian telecommunication sector reflects a global trend in which fixed-lines telephony has been substituted by mobiles," CRT said in a report. For this year, CRT foresees that mobile and fixed-line companies will have to compete more aggressively against wireless Internet services and providers of voice transmission through the Internet.

www.marketwatch.com http://www.asocel.org.co/, La Asociación de la Industria Celular de Colombia

Raúl Osorio. Bucaramanga, Colombia.

Sergio González. Bucaramanga, Colombia.

PRISMA Group and Systems Engineering Faculty, UNAB.