 Columbia: Telecoms and technology background
FROM THE ECONOMIST INTELLIGENCE UNIT
Colombia has some of the best telecommunications facilities in the Andean region, and has achieved high average information technology (IT) capabilities in the regional context, but lags considerably behind benchmark countries. The importance of telecommunications in overall economic activity has grown, from 1.8% of GDP in 1995 to 3% of GDP in 2005. According to the Comisión de Regulación de las Telecomunicaciones (CRT, the telecoms regulatory body) turnover in telecoms increased by 9% in 2004 to reach Ps11.5trn (US$4.6bn).
Telecoms infrastructure has improved in quality and penetration in recent years, supported by increased national mobile phone coverage. Mobile phone services is the most dynamic subsector in the market, contributing over one-fifth of total income. In 2003 the number of mobile phone lines overtook the number of installed fixed lines, and by mid-2005 there were more than twice as many mobile phones as fixed lines, with a penetration rate of 30%, one of the highest in Latin America. In the long-distance market, incumbent carriers are increasingly losing out to wireless and Internet service providers.
The use of the Internet is growing rapidly, but remains low compared with other Latin American countries. The expansion of broadband is expected to boost Internet use.
The IT sector suffers from a poor production base, owing to a lack of funding and the absence of government incentives. The availability of skilled labour is another constraint, although the pool of software engineers is growing. Some Colombian companies have become important players in the Latin American market. The growth of online services has expanded, but relatively low Internet penetration and distrust of electronic transactions continue to act as barriers to the growth of e-commerce. The country was ranked seventh among ten countries in the Americas region in our e-readiness rankings in 2003.
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SOURCE: The Economist Intelligence Unit
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