Government Support Sustains Market Growth

Government-run development programs such as Compartel and the Connectivity Agenda coupled with tax incentives for the purchase of personal computers have brightened the growth prospects of the Colombian Internet and broadband access market. The year 2004 is likely to witness a significant increase in Internet penetration as participants focus on tapping underserved sectors. In fact, those already having Internet connections - especially lower end businesses and residential heavy users - are migrating from dial-up connections to broadband access solutions. This means that introduction of broadband products is likely to provide a competitive edge to different tiers of service providers.

This Frost & Sullivan research examines the Colombian market for traditional (dial-up) Internet services and broadband access solutions such as asymmetric digital subscriber line (ADSL), cable modem, and others {integrated services digital network (ISDN), wireless, and satellite}. It also provides comprehensive information on the level of broadband evolution and competitive landscape, which includes Internet service providers (ISPs), telecommunications companies, and cable operators.

Removal of Regulatory Bottlenecks to Expedite Growth

Currently, certain regulations pertaining to telecommunications are pending government intervention and this is restraining market growth. One such issue is the de-segregation of wireline network (local loop unbundling) that could facilitate the entry of competitive local exchange carriers (CLECs) and second-tier ISPs in the broadband space that is currently dominated by incumbent telecom and cable operators. The permission to auction broadband wireless access licenses - which will allow new entrants and facilitate Internet access for remote users - is another key issue pending before the government. Such license auctions are also expected to reduce the geographic concentration in specific regions.

These much-awaited regulatory modifications could certainly fuel further penetration of broadband Internet. "Considering the interest of the Colombian Government to promote Internet access across a broad spectrum of service technologies, regulatory modifications are expected to be customer-friendly and aimed toward expanding the Internet and broadband subscriber base," opines the analyst.

Expansion of Product Portfolio - the Key for Future Success

With cable operators continuing to dominate the broadband space and second-tier ISPs maintaining their focus on niche markets, the competitive landscape continues to be quite fragmented. This compels participants to broaden their product portfolio and offer additional value propositions, which could separate winners from losers in the broadband space. "New product and service releases with special focus on the development of broadband access service suite along with aggressive marketing and pricing strategies is likely to assist participants in retaining and attracting new customers," concludes the analyst.

Assessment of Developing Business Models Identifies Key Growth Areas

Analysis of new, low-cost models, such as free Internet and prepaid Internet cards, offers alternative paths of growth for market participants seeking to expand their revenue streams and customer bases. This research provides a complete review of how such models will develop in the coming years.

Individual Analysis of Regional Markets

Unique perspective is provided for each country, based on individual market assessments and existing potential. This becomes a valuable resource for those comparing and contrasting major markets for investment.

In-depth Addressable Market Analysis Provides Details on Growth Potential

Frost & Sullivan provides detailed analysis of end-user segments - business and residential sectors - and identifies the unmet demand among them.

Strategic Competitive Profiles Highlight Strengths and Weaknesses

With participants offering similar types of services, strategies have assumed greater importance in the highly competitive Internet and broadband access markets. The competitive profiles provide insight on the advantages and disadvantages of each competitor, enabling operators to formulate future marketing, pricing, and overall strategies for growth.

Inter-Country Geographical Analysis Highlights Growth Patterns in Key Sub Regions

As many service providers are region-based within a particular country, market growth analysis of key sub regions offers a valuable perspective on the core area of business. This research includes key geographical demographics that assist participants in understanding the dynamics of each sub region.

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

By End User:

• Business/Enterprise Sector
• Residential Users

• Dial-up Connections: Internet access through traditional wireline telephone connections.
• Asymmetric Digital Subscriber Line (ADSL): Digital Subscriber Line (DSL) is an "always on" broadband access technology service that utilizes twisted copper wire medium for deployment of the last mile and can operate over the same basic telephone service line without interrupting its service. It is available in different transmission formats. However, the most common form is ADSL.
• Cable Modem: Cable Modem technology is an "always on" broadband access technology service that utilizes the coaxial TV subscriber network for service distribution.
• Broadband Wireless Access (BWA) - Wireless in Local Loop (WLL): WLL technology within the BWA services is a relatively new technology that can provide Internet Fixed Wireless Access as an "always on" connection using wireless networks.
• Broadband Wireless Access (BWA) - Local Multipoint Distribution Service (LMDS): LMDS is a higher end broadband access technology that provides wireless access for high capacity subscribers. This technology is capable of deploying configurable services from 64 Kbps to the capacity of an OC-3 connection.
• Satellite Broadband Access-Direct Internet Access: Satellite-based direct Internet access services provide ubiquitous coverage, rapid deployment, and low-cost global deployment. These services are not provided by terrestrial platforms.
• Integrated Services Digital Network (ISDN): This is a dial-up broadband access technology that utilizes twisted copper wire medium for deployment of the last mile and can operate over the same basic telephone service line without interrupting its service. It is available in two distinct transmission formats: ISDN Basic Rate Interface (BRI) and ISDN Primary Rate Interface (PRI).