Overview
Colombia’s Information and Communications Technology (ICT) market has been experiencing significant growth, with a 14.6 percent increase in U.S. dollar terms in 2022. The market is expected to grow moderately by 6.6 percent in U.S. dollar terms in 2023, thanks to the momentum of digitization and cloud adoption. According to Fitch Solutions, the I.T. market in Colombia is forecasted to decelerate in U.S. dollar terms in 2023 due to inflation and peso depreciation against the U.S. dollar, making it less affordable to import hardware and software products from global markets, which will also have a negative impact on I.T. services.
Table 1: Colombia’s ICT Market Value
|
|
2021 |
2022 |
2023 (est.) |
2024 (est.) |
|
Market Value |
8.04 |
10.21 |
10.58 |
11.26 |
Units: USD billions
Source: Fitch Solutions
The hardware industry in Colombia is small, and the market relies on imports, while the software and services industry emerged as an important regional nearshoring center. According to Fitch Solutions, the computer hardware market decelerated in U.S. dollar terms in 2022 in Colombia because of peso depreciation and inflation, with only 5.7 percent growth. The local software industry in Colombia has numerous development firms, some targeting regional expansion. Local software firms have strengths in financial applications, digital animation, and mobile and web applications.
Table 2: Colombian Imports in I.T. Hardware
|
I.T. Hardware Total |
2020 |
2021 |
2022 |
|
Total |
1.436 |
1.876 |
2.223 |
Units: USD million
Source: Fitch Solutions
The total imports of I.T. hardware amounted to USD 2.2 million in 2022, an 18.5 percent increase compared to 2021. There was a sharp increase of 27 percent year-on-year in 2022 for notebooks and tablets due to the rise in telework and homeschooling generated by the COVID-19 pandemic. China was the primary source of imports for most product categories; around 97 percent of notebook and tablet imports came from China, except for server and storage equipment, where the higher share was from Mexico and the United States.
Table 3: U.S. ICT Services Exports and Imports to Colombia
|
Exports of services |
2019 |
2020 |
2021 |
|
Telecommunications, computer, and information services |
722 |
743 |
956 |
|
Computer software, including end-user licenses and customization |
240 |
270 |
318 |
|
Cloud computing and data storage services |
47 |
74 |
97 |
|
Other computer services |
10 |
15 |
44 |
Table 4: Computer Services
|
Imports of services |
2019 |
2020 |
2021 |
|
Telecommunications, computer, and information services |
91 |
96 |
137 |
|
Computer software, including end-user licenses and customization |
5 |
7 |
(D) |
|
Cloud computing and data storage services |
(*) |
(*) |
(D) |
|
Other computer services |
27 |
23 |
30 |
(*) Transactions between zero and +/- $500,000
(D) Suppressed to avoid the disclosure of data of individual companies
Source: Bureau of Economic Analysis, in millions USD
Colombia has made significant strides in expanding internet access and ICT to its citizens in urban areas. The Ministry of ICT (MinTIC) has reported that there were 48.9 million internet connections in the fourth quarter of 2022, with 8.8 million fixed internet access points and 40.1 million through mobile connections. The most commonly used technology is 4G, which accounts for 85.2 percent of connections, followed by 3G with 13.2 percent and 2G with 1.5 percent.
The mobile subscription growth has been thriving, with a considerable increase every quarter over the past few years. According to Fitch Solutions, mobile penetration reached an estimated 155.8 percent in Q422, suggesting that the mobile voice market is approaching saturation.
Leading Sub-Sectors
- Best prospects for the ICT sector include digitization and cyber security solutions.
- Cloud Computing Services: Increase data-center capacity, roll out more services by cloud vendors, and platform-as-a-service adoption from enterprises.
- Servers and Storage: data-center hardware demand by telecom operators, cloud, and content firms.
- Software-as-a-Service (SaaS): The adoption rate for on-premise software is low in Colombia, and many firms are preparing to bypass the on-premises era and go straight to the cloud.
Opportunities
The adoption of cloud services will be the most significant driver of the ICT market development in Colombia over the medium term. Prospects are developing for U.S. companies to take advantage of the benefits of the U.S.-Colombia Trade Promotion Agreement (CTPA).
The I.T. market in Colombia sees most demands from a few key subsectors, such as the ICT industry, public sector, and retail. There is demand in Colombia for ICT investments and services that boost efficiency and increase flexibility in financial services, including digitization and platforms for payments and banking, fraud detection, and cybersecurity solutions. Opportunities for U.S. companies will be driven by increased connectivity and affordability of equipment, multi-sector economic growth, and government programs for institutional and regional modernization.
On July 25, 2019, Colombia passed the ICT Sector Modernization Law (Law 1978 of 2019). The law pursues the reduction of the digital gap in Colombia. It intends to boost the ICT sector, allowing current and new companies to develop innovative projects connected with ICT services, improve access to those services, enable progress and modernization, and implement new technologies. The ICT sector presents opportunities for U.S. companies able to offer cutting-edge products and services the Colombian market needs to advance with connectivity.
The Colombian Government has been developing a public policy for adopting fifth-generation (5G) technology in Colombia since 2019, with the 3.5 GHz band being identified as ideal for development. In 2020, MinTIC opened a call for interest from mobile operators to participate in future 5G spectrum assignments, but the 5G spectrum auction planned for early 2022 has not yet taken place, which leaves operators unable to commit to 5G deployments in the short term.
On June 14, MinTIC Minister Mauricio Lizcano announced that the multiband auction for implementing 5G in Colombia and expanding 4G coverage would take place on December 20th,2023. Tender opportunities are on the MinTIC website.
Regulators
MinTIC is responsible for monitoring and controlling the sector, except in subjects related to user protection and anti-competitive practices, which is the responsibility of the Superintendence of Industry and Commerce (SIC). The National Spectrum Agency (ANE) is the spectrum management adviser. The Communications Regulation Commission (CRC) regulates the communication market under regulatory improvement criteria to protect citizens’ rights, promote competition, investment, and the quality of services and information pluralism.
U.S.-Colombia Trade Promotion Agreement
In May 2012, the CTPA came into effect, including a chapter dealing specifically with ICT services. This chapter regulates access to the use of public telecommunication services. It stipulates a series of obligations about suppliers of public telecommunication services, including interconnection, resale of services, number portability, and dialing parity. It also defines the obligations of major suppliers of ICT services, such as treatment by major suppliers; competitive safeguards; resale of services; unbundling of network elements; interconnection provisions; co-location; provisioning and pricing of leased circuits services; and access to poles, ducts, conduits, and rights of way.
The CTPA telecommunications chapter also regulates the operation of submarine cable systems. It establishes conditions for the supply of information services, the operation of independent regulatory bodies and government-owned telecommunications suppliers, and the resolution of telecommunications disputes, among others. The telecommunications chapter generally fosters transparency, equal treatment, and a clear framework for U.S. companies operating in Colombia.
Trade events
September 6 – 8, 2023
Cartagena de Indias, Colombia
ANDICOM is the most important event in the ICT industry in Colombia and the region, where high-level public and private authorities meet in a marketing and high-level academic environment. It has the support of multilateral entities such as the World Bank, IDB, OAS, the Ministry of Information and Communications Technology, and the Communications Regulation Commission of Colombia, among others.
This annual event attracts around 5,000 participants, including key industry figures at business and governmental levels, to generate significant synergies that outline and, on many occasions, define the sector’s policies.
Web Resources
Agencia Nacional del Espectro (ANE) (Spanish)
Ministerio de Tecnologías de la Información y Comunicaciones (MinTIC) (Spanish)
Comisión de Regulación de Comunicaciones (CRC) (Spanish)
Ministerio de Comercio, Industria y Turismo (MinCIT) (Spanish)
Federación Colombiana de la Industria de Software y TI (Fedesoft) (Spanish)
Cámara Colombiana de Informática y Telecomunicaciones (CCIT) (Spanish)
For additional information, including market analysis, trade events, and the products and services that the U.S. Commercial Service can provide to help you succeed in the Colombian market, please contact:
U.S. Embassy Bogotá
Rafael Jiménez
ICT Commercial Specialist
+57 (313) 275-2764