Market Trends of Colombia Digital Transformation Industry
IT and Telecom is Expected to Witness Growth
- The Colombian IT and telecom sector is experiencing significant transformation, mainly driven by the need for improved connectivity, digital services, and technological innovation. The country has seen growth in the deployment of digital solutions, including software development, IT consulting, and managed services.
- Many telecom regulators are investing in developing 4G and 5G infrastructure. 5G deployment helps the country with faster speeds, lower latency, and greater connectivity. This will significantly enhance mobile internet services and support the growth of IoT (Internet of Things) applications. Significant investments are also being made in telecom to expand coverage and improve the quality of services.
- While fixed broadband speeds in Colombia have seen an uptick, in June 2024, Speedtest reported a median fixed download speed of 140.17 Mbps, a notable increase from 94.40 Mbps in May 2023. This provided a potential for existing players to invest in the network infrastructure for growth.
- For instance, in December 2023, Claro, Union Temporal Colombia Móvil-Telefónica (a network-sharing JV between Tigo and Movistar), Telecom Colombia (WOM), and Sociedad Futura Telecall Colombia have all been authorized by Colombia’s Ministry of Information Technologies and Communications (MinTIC) to participate in the country's 5G auction. The auction was planned to generate an estimated USD 500 million. The spectrum offered spans from 700 MHz, 1,900 MHz, 2,500 MHz, and 3,500 MHz to additional frequencies in the extended AWS band, ranging from 1,700 MHz to 2,100 MHz.
- Businesses and government agencies have increasingly adopted cloud services to enhance scalability, reduce costs, and improve efficiency. This shift is crucial for remote work and digital service delivery. For instance, in March 2023, Claro and Amazon Web Services (AWS) renewed their five-year cloud services contract. This renewal ensures that Claro Enterprise Solutions can maintain its provision of AWS cloud solutions to customers in Colombia. The agreement emphasized managed services, SAP system migration, contact centers, and tailored vertical solutions.
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Cloud Computing Holds the Largest Share
- In Columbia, cloud computing holds the largest market share due to its adoption in various sectors, including finance, healthcare, education, and government. Organizations leverage cloud services for data storage, application hosting, and infrastructure needs. Cloud computing offers scalability and cost savings, making it attractive for businesses of all sizes. Companies may scale their IT resources based on their business requirements, thus optimizing their costs.
- In March 2023, MinTIC unveiled the Connect ICT 360 plan, part of the government's broader efforts to bridge digital disparities. The initiative sets an ambitious target of extending connectivity to 85% of Colombians by 2026. The plan emphasized adopting advanced technologies and promoting new service providers, especially in areas grappling with the digital divide.
- Mobile broadband allows users to upload data to cloud storage from any location, facilitating the real-time backup and sharing of files. This is helpful for businesses and individuals who need to ensure data is secure and accessible from anywhere. It allows businesses to download files from the cloud to their mobile devices, ensuring they have access to the latest version. As per the data by speed test in June 2024, Colombia recorded 18.40 Mbps in download and upload speed of 11.72 Mbps. This insisted the market players invest in technologies to enhance the capabilities of existing infrastructure in the country.
- The surge in cloud computing demand is directly tied to the rise of IoT integration. As IoT devices become more prevalent, the cloud computing market is expanding. This growth led to the need for scalable storage and processing solutions to handle the vast data volumes. These solutions streamline device management and offer sophisticated analytics, enabling real-time processing and analysis of IoT data.
- Leading global cloud services providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud have established a presence in Colombia, providing robust and reliable cloud services to local businesses. The government in Columbia also promotes cloud adoption, aimed at modernizing public IT infrastructure and digital transformation in the private sector, which is driving the adoption of cloud computing in the market.
