Columbian Telecom Market Declines 8% in 2009

Thoughts on Carrier Evolution (Feb 24 2010) Marketing

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   The Colombian telecommunications market shrunk about eight percent in 2009 as a result of the global economic recession, says César Jiménez, Pyramid Research senior analyst.

   Where the Columbian telecom market generated $7.6 billion in revenue in 2008, that dropped to about $7 billion in 2009. This year will see a slight recovery, lead by high rates of growth for fixed line VoIP, broadband access and mobile data, says Jiménez.

   But it might take four years for total revenue to climb back up to 2008 levels.

   A big background factor in the Columbian market are deregulation and liberalization moves. Of 20 current regulatory initiatives, 10 deal directly with competition.

   In 2010, we expect the regulatory environment to be dominated by significant events such as implementing number portability, spectrum auctions in the 2.5-2.6GHz band, the defining of relevant markets and implementing antitrust regulations, says Jiménez.

   Still, Jiménezv does not believe the more-competitive landscape will be destabilizing to the current market structure. Rather, he sees it remaining "very stable."

   What that suggests is that although some new entrants are expected, they will face slow growth as they compete against established incumbents, in a market dominated by Comcel, Grupo Telefónica, UNE, ETB and Telmex.

   Broadband penetration currently stands at 5.3 percent in 2009, and is expected to reach 9.3 percent by 2014. Broadband revenue will continue as the fastest growing segment of the Colombian fixed market, Pyramid Research predicts.

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