World Dialogue on Regulation

The Colombian telecom regulator (Comisión de Regulación de Telecomunicaciones – CRT) has recently released two reports on developments and current status of its national telecom sector. “Developments in the Telecommunication Sector” released in June, was prepared for the ITU New Initiatives Programme, The Future of Voice. In July, an Informe Sectorial de Telecomuncaciones (Sectorial Report on Telecommunications) was also published – the seventh in a series of annual stock-taking on the country’s telecom terrain, with a particular focus on investment.

The first report, “Developments in the Telecommunication Sector” released in June, was prepared for a ITU New Initiatives Programme, The Future of Voice, to be held in Geneva, January 2007. A range of resources on the evolution and future of voice services are being made available at the ITU webpage as background material for this event. In addition to online thematic resources, documents are being submitted by national regulators on their respective telecom sectors. To-date Romania and Turkey have also submitted national overviews, and the site also promises Regional Case Studies for Latin America; Central, Eastern and South Europe; and Asia (these are not yet available).

The Colombian report submitted to the ITU duly addresses key issues that are highlighted as important facets to be considered for the Future of Voice workshop. An overview of pricing, licensing, universal service, unbundling  are all covered in terms of past performance and current regulation. Indeed, Graph 6 provides an illustration of why there is need to consider the future of voice services. From 2000-2005, Colombia has seen a radical shift from fixed to mobile, and a significant decrease in long distance revenues. This graph and the situation it depicts is indicative of many if not most countries.

With VoIP and other emerging services, we can expect that this graph will look quite different again in another five year’s time – especially in terms of an increased portion for value-added and other services. Perhaps. Much investment is needed to modernise Colombian telecom ICT infrastructure, but since a high point in 1999, investment has been slow.

The lion’s share of internet connections in Colombia is still via dial-up. Unusually for the region, the number of cable internet connections outnumbers xDSL, although the latter had a 93% growth from June 2005 to December 2005 and if such growth continues the regulator speculates that there will be a balanced distribution of subscribers between cable and xDSL by the end of 2006. While fixed line infrastructure is stagnating, like most of the region (and most developing countries) the mobile market is both pervasive and dynamic.

The regulator posits that recent investment increases are a result of opening up the market to competition, a process which has been intensified during 2005-06; and consolidation of the regulatory framework as a key concern in terms of reducing complexity of competition rules across various bodies including CRT, the Residential Public Services Superindendence (SSPD), and the Industry and Commerce Superindendence (SIC). Not mentioned in the ITU report, but central to the Informe Sectorial de Telecommuncaciones (VII), is also the issue of the pending Free Trade Agreement between Colombia and the United States, which will have further impact on competition in the sector.

Of particular importance to countries still developing their infrastructure – Colombia has a 17% teledensity – are universal service initiatives and their funding. The Informe is explicit with regards to provisions such as the 2001 Law 671 which specifies that licenses or concessions for service provisions will only be granted to legally established Colombian companies – in particular to retain control over contribution obligations to the universal service fund. In the same vein, the FTA agreement between the US and Colombia observes sovereignty of each over spectrum policies and administration.

These two documents combined provide a measured perspective on recent and anticipated developments in the Colombian telecom sector, and a view on the complexity of increasingly globalised telecom markets. It is interesting that the fact of the pending FTA agreement did not warrant mention in the document that the Colombian regulator prepared for the ITU on the future of voice, when clearly it is so central to the future of the Colombian telecom sector. The future of all developing telecom markets is contingent on investment and the hazards of market concentration. The Colombian example could provide evidence and experience for other countries entering into bilateral trade agreements – and the potential pitfalls and benefits to their telecom (and ICT) sector.  

For more information and the full reports:

Comisión de Regulación de Telecomunicaciones – CRT

Informe Sectorial de Telecommuncaciones (VII)

Yearly reports on the Colombian telecom sector beginning with 2002 are available for download at the CRT website (reports for 2004 and 2005 are also available in English).

ITU - The Future of Voice workshop (January 2007, Geneva)

Contact: Jaroslaw Ponder, jaroslaw.ponder [at] itu.int

The Colombian report, “Developments in the Telecommunication Sector” can be downloaded from the ITU website.