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Viewing cable 09BOGOTA1377, COLOMBIA: FOREIGN BROADBAND DEPLOYMENT INITIATIVES

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Reference ID Created Released Classification Origin
09BOGOTA1377 2009-04-28 22:27 2011-08-25 00:00 UNCLASSIFIED Embassy Bogota
VZCZCXYZ0002
RR RUEHWEB

DE RUEHBO #1377/01 1182227
ZNR UUUUU ZZH
R 282227Z APR 09
FM AMEMBASSY BOGOTA
TO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHC/SECSTATE WASHDC 8514
RHDIFCC/FCC WASHDC
INFO RUEHCV/AMEMBASSY CARACAS 2107
RUEHPE/AMEMBASSY LIMA 7414
RUEHLP/AMEMBASSY LA PAZ APR BRASILIA 8825
RUEHZP/AMEMBASSY PANAMA 3493
RUEHQT/AMEMBASSY QUITO 8151
UNCLAS BOGOTA 001377 
 
SIPDIS 
 
EB/CIP/BA FOR TFINTON; FCC FOR RTANNER; 
DOC/ITA/OTEC FOR ABENNETT 
 
E.O. 12958: N/A 
TAGS: ECPS ECON CO EINT EINV ETTC
SUBJECT: COLOMBIA: FOREIGN BROADBAND DEPLOYMENT INITIATIVES 
 
REF: SECSTATE 27310 
 
1.  SUMMARY.  Internet usage has grown to 40 percent of the 
Colombian population in the last ten years, with internet 
subscriptions rising at an annual rate of 75 percent.  Over 
73 percent of internet subscribers use broadband.  Despite 
the growth, Colombia's subscription penetration average 
remains sixth in Latin America, with a majority of internet 
subscriptions concentrated in Colombia's three largest 
cities.  To promote Information and Telecommunications (IT) 
services in rural areas, Colombia's Ministry of 
Communications developed a comprehensive ten-year National IT 
plan.  A USD 750 million public-private Communications Fund 
administers plan implementation, with 60 percent of funds 
targeted to the Compartel rural and community development 
program.  USAID also supports the development of 
telecommunications networks in rural areas, as well as 
provides technical assistance to GOC telecommunications 
authorities.  END SUMMARY. 
 
Internet Access Growing, but Penetration Still Low 
--------------------------------------------- ----- 
 
2.  The percentage of internet users has grown from 1 to 40 
percent of the population -- or approximately 17 million 
people -- within the last decade.  Permanent internet 
subscribers have also grown at an annual rate of 75 percent 
in the last five years, although the actual number of 
subscriptions remains low at 2 million.  Colombia's 
penetration average (the internet subscription to population 
ratio) is 4.3, ranking it sixth in Latin America behind 
Chile, Argentina, Uruguay, Mexico and Brazil.  Likewise, 55 
percent of subscriptions remain concentrated in the cities of 
Bogota, Medellin and Cali. 
 
Broadband Coverage 
------------------ 
 
3.  Colombia has 1.45 million internet subscribers with 
broadband access -- approximately 73 percent of total 
subscriptions.  (NOTE:  Colombia's Telecommunications 
Regulations Commission (CRT) defines broadband as an internet 
service with a minimum download speed of 512 kbps, which is 
faster than the 128 kbps download speed defined as broadband 
by the International Telecommunications Union (ITU).  END 
NOTE.)  DSL (63 percent) and cable (32 percent) dominate the 
broadband market share, with Wimax (5 percent) a distant 
third.  The main providers according to market share are: 
Empresa de Telefonos de Bogota (25 percent); EPM 
Telecommunications (24 percent); Colombia Telecommunications 
(20 percent); Telmex Hogar (19 percent); and independent 
providers (12 percent).  These providers focus on triple-play 
packages combining internet, television and telephone 
services, which has contributed to the rapid expansion of 
internet usage.  Carlos Forero, the Vice-President of the 
CRT, told us that broadband and associated value-added 
services are now seen as the market differentiator between 
telecommunications providers. 
 
GOC Policies To Promote Telecommunications 
------------------------------------------ 
 
4.  Last year the Ministry of Communications (MOC) announced 
a National IT Plan, establishing three main goals to be 
achieved before 2019: 70 percent of Colombians with internet 
subscriptions, 100 percent of health and education 
establishments with internet access, and 100 percent of rural 
areas with internet access.  The MOC plans to achieve these 
objectives through its flagship community and rural 
development program Compartel, which is funded by a USD 750 
million public-private National Communications Fund.  (Note: 
All telecommunications providers are required to assist the 
MOC in financing the Compartel program, with private sector 
contributions equaling 15 percent of Compartel's total budget 
in 2008.  END NOTE.)  Compartel provides subsidies or 
investment incentives to establish internet networks and 
telephony services in Colombia's most rural and impoverished 
areas.  Since 2008, the program has invested USD 421 million 
in rural networks, benefiting 16,000 rural educational, 
health and government institutions. 
 
5.  In addition to Compartel, the GOC also supports 
 
additional programs in the educational, health, 
entrepreneurial, competitiveness, online-government and 
research sectors.  Activities in 2008 included the 
distribution of refurbished computers to educational 
institutions (USD 86 million), connectivity financing for 
small and medium enterprises (USD 15 million), conversion of 
all public institutions to online institutions (USD 70 
million), and e-medicine (USD 5 million). 
 
USAID: Providing Connectivity and Regulatory Guidance 
--------------------------------------------- -------- 
 
6.  USAID also promotes telecommunications connectivity for 
underserved and rural populations, as well as education and 
content to support economic and social development, through 
its Last Mile Initiative.  Major contributors to this 
public-private alliance are Avantel, Intel, Cisco, Microsoft, 
Google, Polyvision, regional and local governments, and the 
MOC.  Through the program, USG-provided equipment and 
training will connect 50 municipalities in the departments of 
Meta, Huila and Magdalena, including 21,000 small businesses 
and 325,000 institutions such as schools, hospitals, justice 
houses and local government offices.  On the technical side, 
USAID assisted the MOC with the development of its National 
Plan and presently advises the CRT on "unbundling the local 
loop" to increase competition in broadband provision. 
 
 
COMMENT:  Not Yet A Leader, But Ripe For Growth 
--------------------------------------------- -- 
 
7.  Colombia remains behind Latin American neighbors such as 
Mexico, Brazil and Argentina in most IT indicators, but since 
the GOC privatized its state-owned National 
Telecommunications Company in 2003, the IT sector has 
expanded rapidly.  The sector contributed a record 3 percent 
of total GDP in 2008.  Local experts agree the IT sector will 
continue to experience accelerated growth as Colombia's 
domestic security situation improves and the legal economy 
strengthens.  However, they also emphasize that continued 
private investment is key to the GOC achieving its lofty 
goals by 2019. 
BROWNFIELD