Colombia
Information and Communication Technology (ICT)

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2019-10-13

Overview

Table 10:

 

2017

2018

2019 (est.)

Market Value

USD 5.58

USD 6.06

USD 6.38

Exchange Rates

COP 2,951

COP 3,000

COP 3,100

Source: BMI Research, in billions USD

The Information and Communication Technology (ICT) sector presents opportunities for U.S. companies that are able to offer products and services the Colombian market needs to advance in connectivity and Information Technology (IT) services.

According to Business Monitor International, IT spending in Colombia will increase by 8.8 percent (USD 6.38 USD Bn) in 2019 and is expected to keep growing in the next few years. There are several variables that could provide broad support to the IT market in 2019, including low inflation and economic growth, which will increase the Colombian imports of products and services.

Industry sources forecast Colombia’s total IT market to reach a value of USD 6.38 billion with an optimistic outlook for growth in 2019. IT services sales make up the largest share of the market at 65 percent, followed by computer hardware sales at 18 percent and software sales at 17 percent.

According to the latest bulletin published by the Colombian Ministry of Telecommunications (MinTIC) in May 2019, Internet penetration has reached 65.5 percent, with more than half the total population accessing the Internet through their mobile phones. Six years ago, only 15 percent of the population had access to broadband Internet. 

On June 5th, 2019, the House of Representatives of the Colombian Congress approved the ICT Law, also called the Law of Modernization of the ICT sector that pursues the reduction of the digital gap in Colombia, increased investment and simplify the institutional structure. The law intends to boost the ICT sector allowing current and new companies to develop innovative projects in connection with ICT services, to improve the access to those services, and to enable the progress and modernization and implementation of new technologies in the country.

Colombian International Trade in IT Equipment 
Colombia’s total imports of IT equipment (Harmonized System Code HS8471: automatic data processing machines and units thereof; magnetic or optical readers; machines for transcribing and processing coded data) in 2018 amounted to USD 1,06 billion, a 7.5 percent increase compared to 2017. Of this total, 70 percent of imports (USD 747 million) came from China, followed by Mexico at 13 percent (USD 135 million), and the United States at five percent (USD 56 million).

Leading Sub-Sectors
1.    Cloud computing services and cybersecurity solutions

2.    Hardware: Upgrading of equipment compatible/enabled for cloud services in private companies

3.    Software: Enterprise Resource Planning (ERP) solutions; Business intelligence solutions; Advanced security software solutions

Opportunities
The total value of Colombia’s imported IT products increased throughout 2018 compared to the previous year. Imported goods directly from the United States have decreased over the past several years, leading to a drop-in market share compared to China and Mexico; however, U.S. keeps the third place in IT exports after these two countries. China’s increase in market share can be explained in part by two main reasons: many international and U.S. manufacturers have their production facilities in China and export directly from China, and Chinese companies continue to expand aggressively into Latin America through now-familiar brands such as Huawei and Lenovo. 

Nevertheless, the IT sector in Colombia is expected to continue growing above overall economic output (GDP) rates and promising prospects exist for U.S. companies to take advantage of the benefits derived from the U.S.-Colombia Trade Promotion Agreement.

Opportunities for U.S. companies in the Colombian IT market will be driven by increased connectivity and affordability of equipment, multi-sector economic growth, and government programs for institutional and regional modernization. Low-income consumers are likely to prefer a smartphone for consuming content from the Internet rather than a tablet. 

There is demand in Colombia for IT investments and services that boost efficiency and/or increase flexibility in diverse sectors, such as financial and manufacturing. According to MinTIC, Colombia has infrastructure capable of handling world-class operations, with 10 submarine cables that allow the use of 4G technology, but the country is making plans to adopt 5G in the upcoming years.  

Telecommunications and the U.S. - Colombia Trade Promotion Agreement 

Colombia’s ICT market continues to be driven by government programs aimed at increasing access and penetration. The broadest coverage can be found in the mobile telephone segment, where there were 64.51 million registered lines equivalent to 129.5 percent penetration (in a country of approximately 49 million inhabitants) at the end of 2018. Approximately 79.44 percent of the lines work through prepaid services, according to the latest MinTIC quarterly report. As the penetration rate continues growing, operators in this prepaid saturated market are focusing more on non-voice services for revenue growth and are competing to expand their 4G LTE networks, while the telecoms market remains virtually unchanged.

In May 2012, the U.S.- Colombia Trade Promotion Agreement (TPA) came into effect, including a chapter specifically detailing ICT services. This chapter regulates access to the use of public telecommunication services and 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 

September 4–6, 2019

Cartagena, Colombia 

Tecnomultimedia infocomm

October 23-25, 2019

Bogota, Colombia

Andinalink

March 3-5, 2020

Cartagena, Colombia

 

Web Resources

U.S. Commercial Service Bogota contact: Rafael Jimene

Email: Rafael.Jimenez@trade.gov    

Tel: 57 1 275 2814 

 

Key Contacts

Ministerio de Tecnologías de la Información y Comunicaciones (MinTIC)

Colombia TIC

Ministerio de Comercio, Industria y Turismo (MinCIT)

Federación Colombiana de la Industria de Software y TI (Fedesoft)

Cámara Colombiana de Informática y Telecomunicaciones (CCIT)