Mobile Telephony and Broadband Services Driving the Colombian Telecoms Market

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Note -- this news article is more than a year old.

Spurred on by the explosive penetration of mobile telephony and broadband services the Colombian telecommunication services market has witnessed high and stable growth rates in recent times. Market development in the short and medium term will depend a great deal on the promotion of new technologies and applications.

New analysis from Frost & Sullivan finds that the market earned revenues of over $5.48 billion in 2006 and estimates this to reach $7.12 billion in 2012.

"The primary drivers for the Colombian telecommunications markets include the strong growth of broadband services, the development of the VoIP market, and the emergence of new applications in the mobile telephony segment," notes Gina Sâínchez, Research Analyst at Frost & Sullivan. "With fixed telephony services having reached maturity and mobile telephony penetration levels at over 73 percent, value-added services and new technologies will be critical to the market's future growth."

With regard to broadband and Internet access services, growth is likely to be accelerated by the country's economic progress, more affordable personal computers (PCs) and telecommunication equipment, and the Government's social programs for digital inclusion. Moreover, broadband prices continue to fall as a result of increasing competition and this continuing trend is likely to further spur subscriber growth.

Going forward, the voice over Internet Protocol (VoIP) segment is likely to emerge as the fastest growing market segment, followed by the broadband and Internet access segment. During the forecast period, the VoIP segment is projected to grow at a compound annual growth rate (CAGR) of 77.0 percent and the number of lines is expected to grow from 22,560 to 504,509.

"However, the entrance of multinational companies and the mergers and acquisitions adopted by market participants to strengthen their position have added much competition to the market," notes Sâínchez. "In this scenario operators have started a price reduction race that may restrain market growth."

Overall, the Colombian telecommunications sector has emerged as a market with high and stable growth rates. Given the increasing competition and the overwhelming need to maintain healthy average revenue per user (ARPU), it will be vital for market participants to offer bundled solutions and triple play, as well as integrated packages of telecommunications and IT solutions.

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