Following the macroeconomic expansion of the last decade, Colombia’s telecommunications sector has experienced growth in the numbers of customers, competitors and services offered. As a result of improved living standards and greater disposable income, the market is increasingly attractive for operators. The sector’s progress has been framed in the context of increasing regulation, and although some challenges remain in terms of sector oversight, new laws have helped ensure service quality and a reduction of average communications prices. This has been advantageous for mobile phone users, but it is challenging for market players that are operating in an increasingly competitive arena.

The industry’s growth in recent years has allowed for a significant contribution to the economy overall. The weight of the telecoms sector has nearly doubled from 1.6% of GDP in 1994 to 3.14% in 2014, according to the latest figures available from the Mobile Industry Association of Colombia (Asociación de la Industria Móvil de Colombia, Asomóvil), a private sector association made up of the three biggest mobile phone operators, Claro, Tigo and Movistar.


Mobile phone penetration, which rose from 92.2% in the first quarter of 2010 to 116.1% in the fourth quarter of 2014, has been an important driver for the industry, bringing dynamism, new customers and setting the scene for the sector’s evolution over the coming years. The telecoms market’s annual revenues reached $7.99bn in 2014 and are expected to jump to $8.6bn by 2018, according to figures from research company Dataxis.

As of 2014, mobile services represented up to 74% of revenues in the telecoms sector. A total of 55.3m mobile lines were active by the end of 2014, according to Ministry of Information Technologies and Communications (Ministerio de Tecnologías de la Información y las Comunicaciones, MINTIC) data, a 3.2% increase compared to third quarter 2014 figures.

The market is evolving in terms of technology and accessibility. Between the fourth quarter of 2013 and the same period in 2014, 2G users decreased from 42.6% to 19.1% of all (2G, 3G and 4G) users, while 3G users increased from 57.4% to 75.8%, according to Asomóvil. Continuous growth has been met with challenges, as telecoms companies compete in an increasingly competitive environment. “The customer in Colombia is very opportunistic, seeking promotions on a daily basis and taking advantage of different offers,” Ricard Puiggari, a senior consultant at Delta Partners, told OBG. “Colombian mobile users might use one operator for data and another for voice minutes. The loyalty level in the market is quite low.”

Market Structure

Despite the entrance of new competitors in recent years, the Colombian telecoms market remains highly concentrated. América Móvil’s Claro had a 53.8% share of the mobile market as of the last quarter of 2014, followed by Spanish operator Telefónica, which operates in Colombia with its Movistar brand, with 23.21%, according to MINTIC figures. Both multinational companies are active across all segments of the market. The third mobile operator Tigo, a subsidiary of Millicom, merged with UNE-Empresas Públicas de Medellín in 2014. The merger has combined Tigo’s third place in the mobile market with UNE’s strong positioning as an internet and pay-TV provider. Several companies in the market offer localised services. Avantel and Edatel are the fourth and fifth mobile network operators, after acquiring licences to operate 4G on the AWS band, ranging between 1700 MHz and 2100 MHz. Empresa de Telecomunicaciones de Bogotá (ETB), which provides internet and fixed telephony services, is majority-owned by the Bogotá municipality, and has branched out to the mobile segment by operating as a mobile virtual network operator (MVNO). Furthermore, an alliance between Tigo and ETB won 4G space in the 2013 government spectrum auction.

Digital trunking service provider Avantel and pay-TV company Direct TV also won 4G licences in the latest spectrum sale, and have set up their own mobile service offers on the 2.5-GHz band. Thanks to 4G capacity, niche players in the market are being given the chance to start competing for high-end customers through improved mobile data offers.

A number of bodies are in charge of setting the rules for the telecoms market. Although MINTIC oversees the sector, the Commission for the Regulation of Communications (Comisión de Regulación de Comunicaciones, CRC) is in charge of regulating services, while the National Spectrum Agency is tasked with managing and allocating spectrum.

Mobile Telephony

There are a total of 10 mobile service providers in Colombia: five mobile network operators and five MVNOs. Despite the large number of operators, it is a highly concentrated market: the three main operators – Claro, Movistar and Tigo – accounted for 93.56% of mobile phone lines in the country as of the fourth quarter of 2014, according to MINTIC. Smaller operators have nonetheless been able to gradually increase their market presence: in the last quarter of 2013 the three largest operators had a combined market share of 96.9%. The biggest operator in the country, Claro, had a customer base of 29.78m, followed by Movistar with 12.84m customers and Tigo with 9.15m mobile customers, according to fourth quarter 2014 information from MINTIC.

Added competition and regulation has led to market share fluctuations, especially for the two largest competitors. Between the fourth quarter of 2013 and the same period in 2014, Claro’s market share decreased from 57.6% to 53.8%, while Movistar’s share of total customers went from 24.1% to 23.2%. Over the same period Tigo’s market share rose from 15.1% to 16.5%, while the combined participation of the remaining six mobile competitors rose from 3.1% to 6.5%, according to MINTIC figures.

The market is divided into 20% post-paid customers and 80% prepaid. The number of post-paid customers has been growing, rising from 15.76% of mobile users in the first quarter of 2010 to 20% by the end of 2014, according to MINTIC. Competitive pricing is attracting an increasing number of customers to post-paid mobile services. “ETB has brought innovative plans to Colombia, with special focus on data services. For example, ETB was the first operator – including WhatsApp and Facebook – in the prepaid and postpaid plans or introducing Spotify. ETB launched a post-paid plan at COP30,000 ($11.04) that allowed the traditional prepaid market to enter into post-paid plans. Following these innovative moves by ETB, other operators are currently offering more benefits for the same price,” Puiggari told OBG. “Tigo, Claro and ETB are doing this, for example, offering free access to Facebook and WhatsApp without a price increase.” Average revenue per customer in the Colombian market is around COP12,000 ($4.42), according to October 2015 figures by Delta Partners.

Virtual Operators

Prices are also being influenced by the number of MVNOs operating in the country. Virgin Mobile, which entered the market in April 2013, had 1.99m mobile lines, followed by UFF Móvil with 529,834 users, UNE-EPM with 387,995, Éxito with 362,788 and ETB with 21,170, according to fourth quarter 2014 figures by MINTIC. Virgin Mobile rents network space from Telefónica, while the remaining MVNOs get their network access through Tigo. Although there are several very small competitors with negligible shares, the market is starting to see an impact from their presence, and this is set to become more visible through 4G data services. “These firms are capturing a fair amount of customers. Maybe not sufficient to bother the established players at the moment, but price-wise, the offers they are putting on the market are forcing bigger operators to be more competitive,” Puiggari told OBG.


Pricing, competition and, more importantly, service quality have become important issues for the sector. This was underlined in early 2014, when the country’s attorney general requested that the state bodies responsible for regulating the sector worked on improving service quality.

More stringent regulation has led to some contentious measures. In 2014 the CRC implemented a law making it mandatory for service providers to reimburse mobile phone users for lost minutes due to bad network quality. However, it is not always easy to determine when service goes down because of bad network coverage or other obstacles. Several competitors have faced regulatory fines due to poor service and delays in customer care.

Equally contentious has been the ban on permanence clauses in the Colombian market, which took effect in July 2014, under order of the CRC. Previous regulation forced operators to offer every phone model with and without a permanence clause option, allowing the user to decide. “Eliminating these has reduced options for users. We raised the alert that this could have consequences, and if you look at this in conjunction with other conditions, such as the Colombian peso’s devaluation, banning permanence clauses has really made the better smartphones more expensive, and this, in turn, has reduced adoption levels for 4G technology,” Santiago Pardo Fajardo, vice-president for regulatory affairs and institutional relations at Claro, told OBG.

The CRC has stated that banning permanence clauses has allowed a larger number of stores, supermarkets and other retail outlets to operate in the mobile phone business, creating more competition and ultimately reducing mobile phone prices. It has also spurred international mobile firms to offer more affordable smartphones. Banned from linking equipment acquisition to mobile service provision, operators now offer instalment payment plans. This has added new challenges, forcing operators to manage risks unrelated to their core business.

Impacting The Market

Despite some contentious regulatory decisions, stricter oversight seems to be reducing tariffs. The average price per minute for voice in Colombia went from COP72 ($0.026) in the fourth quarter of 2013 to COP68 ($0.025) in the same period of 2014, according to the CRC, a 6% reduction. A similar tendency has also impacted mobile data services, with the price per gigabyte falling from COP37,000 ($13.62) to COP24,000 ($8.83) over the same period. Easing the switch between operators has also helped spur the market. Mobile number portability was introduced in 2011, and by early 2015 a total of 3.5m users had changed operators. The number of mobile users requesting number portability increased by 65% between the fourth quarter of 2013 and the same period in 2014.

With the stated goal of reducing the market share of Claro, the CRC has been implementing asymmetric interconnection fees. As of the fourth quarter of 2014, Claro’s interconnection fees were close to COP57 ($0.021) per minute, compared to COP46 ($0.017) per minute for Movistar and Tigo. Despite the different treatment between the market leader and the second and third operators, the CRC has been reducing interconnection fees. Between 2011 and 2015 average interconnection fees fell by 42%. This, on top of other regulatory steps, has passed on COP535bn ($196.9m) in savings to consumers, according to March 2015 figures from the CRC.

Mobile Data

One of the biggest changes in the market has been the growth of mobile data. During 2014 mobile data usage in Colombia increased by 55%, Asomóvil data shows. Much of this was achieved through the fast uptake of 4G technology, which rose to 1.3m users by the end of 2014, a year after its inception. The number of mobile internet users in Colombia rose from 965,093 in the first quarter of 2010 to 5.4m in the first quarter of 2015, according to MINTIC. The number of fixed internet subscribers increased from 2.3m to 5.3m over the same period.

The rapid expansion of mobile internet services will nonetheless raise questions regarding capacity. “I think that the biggest challenge for the market will be to manage the rise in data consumption. This growth will mean that all operators will have to invest heavily on infrastructure,” Pardo told OBG.

It is also likely to require sharper design of products and offers. As voice services decline and data consumption grows, operators will need to find new strategies to maintain revenue levels in check with their operational costs. “Data is generally harder to monetise than voice services, and the margins of providing a data service are much lower. However, increasing data services is the only way to maintain the current average revenue per user,” Puiggari said.

Fixed Lines

The number of fixed lines in Colombia has seen a gradual decline. The segment is being further impacted by the drop in demand for voice services. In many ways fixed lines are marginally being maintained due to their link to other services, such as fixed internet or mobile packages, or the business segment, which still relies to a large extent on fixed telecoms. There were 7.1m fixed telephony lines in Colombia at the end of 2014, down from 7.8m in 2007, according to Dataxis. The same source expects the segment to fall to 6.3m lines by 2018.

The segment might, however, receive an injection of dynamism from plans to allow number portability for fixed lines – a measure recommended by the Organisation of Economic Cooperation and Development (OECD) review of the country’s telecoms sector. Although the law is still under discussion, it could come out as early as 2016, with consequences expected for the market. “Some customers have a fixed voice service with one operator, to keep their existing home phone number, and then have a data internet package with another operator. So the new law is especially worrisome for operators that have a list of customers with fixed voice services, but no data service, as these will likely migrate to whomever is giving them the internet service,” Puiggari told OBG.


Similar to other telecoms segments, pay television services continue to expand. According to Dataxis, the number of pay-TV subscriptions is set to reach 5.3m in 2018, a 3.4% rise on 2015 figures. Colombia’s National Television Authority (Autoridad Nacional de Televisión, ANTV) has stated that there were 4.9m pay-TV subscribers in Colombia in 2014, although this figure differs from that given by the national statistics bureau, which has reported almost double that number. Despite being the fourth-largest country in terms of pay-TV subscriptions in Latin America, piracy remains a problem. According to a 2014 report on the Colombian telecoms market published by the OECD, there were 40 local cable television providers, four cable TV operators and two satellite-based pay-TV providers.

“Cable TV enjoys high penetration levels in Colombia, with market share over 85% among lower-income households,” Felipe Cabrales, CEO of Discovery Networks, told OBG. “Upper-income consumers, where penetration is 100%, now demand premium products such as high definition. At the same time, Colombian cable providers offer a quality product at a quarter of the price compared to similar products in the US.”

Hundreds of community television providers, which act as local not-for-profit cable operators, are still present in the market. These can have a maximum of 6000 users and are limited in the number of channels they can offer. Strict rules imposed by the ANTV have resulted in many of these operators being closed down or bought by traditional cable services. The OECD reported that regular pay-TV providers complained that community television operators posed unfair competition and reduced the number of potential pay-TV customers in the country.

Market Leaders

A handful of providers dominate the market. According to second quarter 2015 figures by Dataxis, Claro TV, owned by América Móvil, had a 43% market share, followed by US-based telecoms giant AT&T’s DirecTV with 21.5%. In third and fourth places in terms of subscribers were UNE and Telefónica, which had 20.3% and 8.9%, respectively.

Despite the rise of subscription services, open television remains a major force in the market, and the government is progressing with the establishment of digital terrestrial television across the country. As of October 2015, digital television covered 70.3% of the country’s population, according to the ANTV. Coverage is expected to surpass 90% in 2018.

Advertising Strategies

Changes in media consumption habits are also impacting advertising expenditure and strategies. According to eMarketer estimates, 11.4% of advertising budgets were directed towards digital advertising in 2015.

Total investment in digital advertising was expected to rise by 25% in 2015 to $165.7m, and the share of total advertising going to digital platforms is set to increase over the coming years, considering the rising penetration of smartphones. Traditional media such as television, print and radio are nonetheless expected to remain relevant for the foreseeable future, although establishing an effective communications mix will be only one of the challenges that advertisers will have to face. “The real challenge in the Colombian communications and advertising industry is to deeply understand the consumer. Until recently, Colombia was a closed economy, and Colombians got used to local products and services. This has created an endemic taste with nuances that makes Colombia a particular market to enter,” Juan Pablo Rocha, president of JWT Colombia, told OBG. 

Entrant Possibilities

On top of the already high level of competition in several segments, recent moves by AT&T in Latin America have called the market’s attention to the company’s potential entry into the Colombian mobile market. AT&T entered the Mexican market in 2015 by acquiring Iusacell and Nextel. The firms also recently acquired Direct TV, the biggest pay-TV provider in the US, with a presence in several Latin American countries, including Colombia.

If a move into mobile services is confirmed, the telecoms operator may decide to enter the market by either acquiring one of the existing competitors, or through a brand new operator. This would be possible through the upcoming tender of space in the 700-MHz spectrum, set to take place in 2016.


The ongoing drive by regulating bodies will continue to shape the market, and a new resolution that would force operators to give back unused minutes to mobile customers is under discussion. The measure would compel providers to return minutes in case a post-paid subscriber has not used all minutes allowed by his specific plan, giving back the unused time as credit the following month. If passed, this regulation would bring several challenges to operators, according to market observers OBG spoke to. One clear difficulty would be to keep track of consumption levels and to determine how much credit would be required to be given back to each customer. Structuring mobile plans might also be more challenging.

Overall, structural changes to the way that existing regulatory bodies operate will need to be implemented over the coming years. But more importantly, the government’s continued partial ownership of some of the market operators remains a contentious issue. The state owns 30% of Telefónica, while UNE, which recently merged with Tigo, is 50% government-owned. Furthermore, up to 70% of ETV is also state-owned. “In these conditions there is the danger of a conflict of interest, where a regulator can be both regulator and regulated,” Pardo told OBG. The issue has also been mentioned by international organisations. As part of its recommendations to improve Colombia’s telecoms sector, the OECD and other international sector observers have suggested that the Colombian government’s role as an owner is perhaps one of the sector’s biggest weaknesses.

Another element that could bring improvements in sector oversight is the implementation of regulatory impact assessment. This methodology, proposed by the OECD, means that before putting out any new law, the regulator must make an evaluation, identifying how the proposed law will impact the market. “It is necessary for the regulator to balance whether the new regulatory load being laid on operators surpasses the regulation’s benefits,” Pardo said.

One area that has received a push from regulators is infrastructure deployment, where there have been issues, especially in rural areas. A new National Development Plan for Telecommunications Infrastructure Deployment has added several new articles which ease the establishment of infrastructure for service operators. Article 5 of the plan, for example, states that telecoms antenna that do not need independent support infrastructure do not require authorisation from local governments before being set-up.

In addition, MINTIC has started to play an important role as a mediator between the industry and the municipal authorities, which sometimes create difficulties for expanding infrastructure.

“Deployment remains a headache, but the enactment of Law 1753 of 2015 (National Development Plan for the Period 2014–2018) contains certain provisions that shall help operators with deployment,” Pardo told OBG. “A recent circular from the ministry and the procuradoria reminded the local authorities that according to Law 1753, they must help with infrastructure deployment. So we trust that the mentality is somewhat changing.”


The telecoms market has reached a level of competitiveness and saturation that has opened the door to further consolidation. Although three traditional operators have a large majority of the mobile market, a handful of smaller operators and MVNOs are taking advantage of the current regulatory environment and creating opportunities for innovative offers. Although demand for voice services is declining, mobile data is expanding rapidly and helping to drive the market. The growth in mobile phone users is likely to slow as penetration levels increase, but the sector has a number of avenues for growth, especially as bundling of telecoms products accelerates.