Growth in Colombia’s mobile market is slowing down, but the nation is still expected to add more than six million more connections over the next five years. From 2010 to 2015, the nation went from 44.5 million connections to 56.1 million, pushing the connections per person from under one (0.98) to 1.17.
By 2020, the total will hit 62.5 million in 2020, according to a recent report from eMarketer, giving Colombia 1.23 mobile connections per person. The research company, in “Mobile Colombia 2016: Updated Forecasts and Key Growth Trends,” credits a large amount of the increasing penetration rate to the work of the government.
“Mobile’s near ubiquity in Colombia is largely the result of the federal government’s Vive Digital program, a five-year plan focusing on mobile connectivity to support widespread internet adoption,” said eMarketer in a statement. “After successfully enabling internet uptake among consumers through the iteration between 2010 and 2014, the current Vive plan running through 2019 concentrates on the digitization of all government functions, as well as the development of a technological ecosystem to help enterprises embrace digital means of doing business.”
Colombia Mobile Cost
But while the uptick will continue, albeit at a slower rate than during the period that saw the biggest explosion, cost remains an issue. The firm notes that there remains an 80% to 20% split between Colombian customers who have prepaid service vs. recurring monthly plans. While some of that can be attributed to the historic development of the market, it says the largest reason is price.
For the poorest two-fifths of the population, purchasing even a 500 mb plan can mean spending more than 20% of their pretax income on mobile service. This is drastically above the 5% amount that industry analyst GSMA Intelligence considers reasonable.
Colombia Mobile Growth
Despite these hurdles, eMarketer projects that some 70% of Colombia’s population — 33 million people — will be mobile users by the end of 2016. (A user is defined as someone who uses service at least monthly.) This is significantly above the regional average of 65.9%, the firm notes, and third in Latin America behind only Chile and Argentina, which claim a 73.9% and 71.4% user rate, respectively. By 2020, eMarketer projects the overall number of mobile users in Colombia to hit 35.4 million, or 72.1% of the population.
The nation has also been praised for its overall digital development relative to GDP. Telefónica, the leading Spanish telecom, recently released its “Index on Digital Life,” looking at nearly 10 different factors of online and mobile behavior in 34 countries. It ranked Colombia first overall among Latin American nations in digital openness, as well as second in digital business and finance. Colombia came in third in internet freedom and digital literacy.
Colombia Mobile Competition
Choice in the market, particularly if more players enter, is something that can help push down coast. Claro, the domestic subsidiary of Mexican billionaire Carlos Slim’s behemoth América Móvil, is the dominant carrier, holding roughly 53% of the market as of early 2015. Movistar, owned by Telefónica, is second with 23%, while the local Tigo controls 17%.
Though known more as a leading fixed-line telecom, the government-controlled ETB is another player in the mobile space. The company has been losing money in recent years, however, and Bogotá Mayor Enrique Peñalosa has announced his desire to sell the city’s 86.6% stake in the company to fund education, infrastructure, and security initiatives in the capital.