Overview

The Information and Communications Technology (ICT) market in Colombia contracted 1.3 percent in U.S. dollar terms in 2020, primarily due to the negative impact of the COVID-19 pandemic on business investment, household consumption, and the peso depreciation affecting hardware and software affordability in local currency. Fitch Solutions forecasts a deceleration of the I.T. market in Colombia in U.S. dollar terms in 2022 as the rebound out of the Covid-19 pandemic loses momentum. Colombia´s ICT market is expected to have a moderate growth rate of 6.8 percent in U.S. dollar terms in 2022, thanks to the momentum for digitization and cloud adoption generated by the pandemic.

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. Fitch Solutions forecasts the computer hardware market will also weaken year-on-year after consecutive years of U.S. dollar spending growth during the pandemic in 2020 and 2021.

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.

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.

 

Units: USD million
Source: Fitch Solutions

Colombia’s total imports of I.T. hardware amounted to USD 1.436 million in 2020, a 4.89 percent increase compared to 2019. There was a sharp increase of 27 percent year-on-year in 2020 for notebooks and tablets due to the rise in telework and home school generated by the 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 there was a higher share from Mexico and the United States.

 

 

(*) 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

Leading Sub-Sectors

Best prospects for the ICT sector include digitization and cyber security solutions.

Cloud Computing Services: increase data-center capacity, the rollout of 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-premises 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 derived from the U.S.-Colombia Trade Promotion Agreement.   

The I.T. market in Colombia sees most demands come 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 sectors such as 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.

Tender opportunities can be found on the Colombian Ministry of Information Technologies and Communication´s (MinTIC) website.

Telecommunications

MinTIC has consolidated internet access and ICT for most Colombians in urban areas. There were 46.44 million Internet connections in the fourth quarter of 2021, 8.44 million fixed internet access points and 38.0 million through mobile connections (according to the latest bulletin published by MinTIC in April 2022). The most used technology is 4G with 78.7 percent, followed by 3G with 18.2 percent and 2G with 3.2 percent.

Mobile subscription growth has been healthy in Colombia, with the market posting significant gains every quarter over the past few years. Fitch Solutions estimates mobile penetration reached 142 percent in Q321, indicating that the mobile voice market nears saturation.

Since 2019, MinTIC has been developing a public policy for adopting fifth-generation (5G) technology in Colombia, in which the 3.5 GHz band was identified as ideal for development. In 2020, the ICT Ministry opened a call to receive expressions of interest from mobile operators to participate in future 5G spectrum assignments; however, no auction has been held so far.

Trial services in 5G were launched by Claro, Movistar, and Tigo in May 2020 using 3G/4G frequencies and part of the 3.5GHz spectrum assigned for piloting purposes. On May 12, 2021, Millicom announced incorporating Open RAN technology into its 4G network expansion in Colombia. According to Fitch Solutions, 4G will remain the most widely used technology in Colombia during the upcoming years, making greater use of third-party cloud and infrastructure providers to help meet the demand for connectivity. 

As of June 2022, MinTIC was still pending to confirm the next spectrum auction and the first to include bands for 5G use, such as the 2.5GHz and 3.5GHz. 5G will not see rapid take-up in Colombia due to high costs and the lack of locally relevant use cases; operators will continue to expand their LTE offering in the country.

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 U.S.- Colombia Trade Promotion Agreement (TPA) 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 pertaining to suppliers of public telecommunication services, including interconnection, resale of services, number portability, and dialing parity. It also defines the obligations for 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 TPA 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. In general, the telecommunications chapter fosters transparency, equal treatment, and a clear framework for U.S. companies operating in Colombia and vice versa.

Trade Events

ANDICOM

August 31 – September 02, 2022

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 sales environment and in a high-level academic environment. It has the support of multilateral entities such as the World Bank, IDB, ITU, IEEE, OAS, the Ministry of Information and Communications Technology, and the Communications Regulation Commission of Colombia, among others.

This annual event attracts around 3,000 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.

Resources  

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
Rafael.jimenez@trade.gov
+57 (313) 275-2764
https://www.trade.gov/colombia