El Salvador - Country Commercial Guide
Information and Communications Technology

This is a best prospect industry sector for this country. 

Last published date: 2020-09-30

Overview

 

2017

2018

2019

2020(Estimated)

Total Local Production

0

0

0

0

Total Exports

13,000,000

14,000,000

14,400,000

13,000,000

Total Imports

537,500,000

607,000,000

605,000,000

537,500,000

Imports from the US

261,806,629

265,415,368

272,245,791

261,806,629

Total Market Size

524,500,000

593,000,000

590,600,000

524,500,000

Exchange Rates

NA

NA

NA

NA

(total market size = (total local production + imports) - exports). Information on local production not available.

Source: Central Reserve Bank of El Salvador, and U.S. National State trade data. Statistics in millions of U.S. dollars. Trade data classification based on U.N. ITC goods and NICS 334 computer and electronic products.   Official currency is U.S. dollar, no exchange rates apply.

Overall, the United States continues to be the main source of imports in El Salvador, leading about 30% of the imports market share in 2019, followed by China with 14% of market share.  There is no significant local production of information and communication technology, except for capacitors used in electronic equipment produced at a free trade zone for specific clients.  Import duties for information and communication technology and equipment are zero percent, subject to a 13% value added tax.  End users must pay 5% tax on purchases of telecommunications products and services, such as fixed and mobile telephony, pay-TV, and internet as a special contribution for citizen’s security.  To do business in El Salvador companies should either register an office or work with a local agent to navigate the procurement registration process and follow up on public and private opportunities, it is recommended to develop contracts between the parties using provisions in CAFTA-DR Chapter 11.

In El Salvador, the ICT sector operates under a privatized legal and institutional framework since 1997, one of the most liberal ICT sectors in Latin America, encouraging competition in most areas and allowing foreign investment. The country’s transition to digital transmission began in 2018 along with adaptation of the Japanese-Brazilian Digital Standard (ISDB-T). The regulatory authority with responsibility over spectrum development is the General Superintendence of Electricity and Telecommunications (SIGET).  The Superintendence of competition (SC) controls the concentration of telecommunication operators. 

Mobile-cellular operators began rolling out Long Term Evolution (LTE) data services in 2016. The total number of internet users in 2016 was 1,785,254 or about 29% of the population,[BL1]  mostly using internet for social media and for education and business. Mobile penetration is remarkably high considering El Salvador’s economic indicators, being about a third higher than average for Latin America and the Caribbean. The growth in fixed-line services slowed in the face of mobile-cellular competition, fixed lines were 14 per 100 inhabitants, and mobile cellular was 148 per 100 inhabitants in 2019.  The broadcast media sector of the ICT industry in El Salvador combines multiple privately owned national terrestrial TV networks, supplemented by cable TV networks that carry international channels, and hundreds of commercial radio broadcast stations.

The country was one of the last in the region to provide LTE services, mainly due to the inadequacy of suitable spectrum, but in 2019 the telecommunications regulator (SIGET) awarded more spectrum through a public tender after which LTE 4.5 has been deployed by private operators.   

Leading Sub-Sectors

The following subsectors have high probability of success:

· Consulting, professional and technical services

· Software development

· Database management

· Data center operations

· Cybersecurity operations

· Computer and network hardware and software

· Telecommunication systems and products

Opportunities

The Technical and Innovation Secretariat has made comments that show an understanding of the importance of digitalization in modern societies and economies, and a firm intention to drive this process in the country.  The Innovation Secretariat’s 2020 - 2030 Digital Agenda  aims to initiate a digital transformation is developed over  four pillars: 1. digital identity; 2. innovation, education, and competitiveness; 3. modernization of the government; 4. digital governance.  ICT services and products to accomplish the Digital Agenda are focused on:

  • Digital identity
  • Digitalization of medical records at selected public hospitals
  • Reduction of digital gap
  • Centralized data center
  • Electronic commerce, electronic signature, and electronic invoice implementation
  • Biometric passport
  • National registry of mobile phone numbers

Software, hardware and training for online education

Smart Cities initiatives have emerged through video surveillance to confront crime and violence.  the connectivity and technology available in the market has made it possible, but also has opened up the opportunity to do more with internet of things to improve the lives of the citizens and business.  El Salvador has ambitious plans to modernize ports, airports, water and sewage systems, improve and expand mass mobility, lighting and surveilliance of roads. There are opportunities for water metering, smart traffic solutios, smart lighting systems, cctv cameras, and city monitoring systems.

El Salvador’s private and public sector prefer U.S. products, services, and technologies.  The main buyer is the public sector and purchases are channeled through Comprasal, an online portal for competitive bidding processes. All government purchases are regulated by the Acquisition and Purchasing Law (Ley de Adquisiciones y Contrataciones –LACAP), including direct purchases often announced for special projects and technology.

Main challenges facing ICT plans and agendas in El Salvador, and consequently opportunities for U.S companies, are:

· Broadband, El Salvador does not have a radioelectric spectrum tender plan to stimulate investment in mobile broadband networks. 

· Regulations and standards that promote infrastructure sharing and standardized permitting are key to increase investment in telecommunications infrastructure, antennas, repeaters, and base stations. 

Web Resources

Digital Strategy by Think Tank FUSADES

ICT Statistics El Salvador

CIA World Factbook

IDB Telecommunications Governance Toward-the-Digital-Economy.pdf

U.S. Commercial Service Contact

Maria Rivera, Senior Commercial Specialist, maria.rivera@trade.gov

 


I think there are more recent statistics, but maybe Commerce wants to use a specific source? [BL1]