TowerXchange: Guillermo, what is your take on the Colombian telecom sector?
Guillermo Mulville, Principle Investment Officer, IFC:
At IFC, we are bullish on the Colombian telecoms market. Mobile telephony currently represents 70% of the total telecommunications industry revenue, initially driven by growth in subscriptions, which now amount to over 53mn.
While mobile subscriptions may be reaching saturation levels, the sector still maintains a healthy growth rate as a result of operators offering additional services. Voice is becoming ubiquitous, but the exponential increase in data demand is driving industrial growth, with several players (Movistar, the combined Tigo and Une-EPM, Claro and DirecTV) having already made 4G technology available to their customers.
As in other markets, we also see that broadband is enabling a wide array of additional services, including mobile banking, mobile health, e-education and entertainment.
TowerXchange: How is the government contributing to fostering a modern ICT industry?
Guillermo Mulville, Principle Investment Officer, IFC:
The government has been actively supporting the sector, for example through ambitious Vive Digital programme, levelling the playing field by reducing interconnection rates for smaller players, and through auctioning spectrum.
Specifically, ICT ministry has recently published a draft document for public consultation on the bidding rules for the auction of a number of spectrum bands (i.e. in 700MHz, 900MHz, 1.9GHz and 2.5GHz). Winners will be subject to ambitious urban and rural coverage requirements. For the next four to five years, private and public investments in the sector may reach up to US$10bn, inclusive of capex, spectrum and other investments.
TowerXchange: What are the effects on the tower industry?
Guillermo Mulville, Principle Investment Officer, IFC:
The above dynamics bode well for the tower market.
The country has several healthy MNOs and wireless broadband providers which will need to expand their coverage and network capacity. This has already attracted a large number of independent tower operators. A high portion of Colombia’s 15,000 towers remain with MNOs, mainly explained by market leader Claro’s reluctance - up to now - to sell off towers. However, build-to-suit activity remains healthy and we should not discard sale-and-leaseback opportunities either.
TowerXchange: What investments has the IFC undertaken in Colombia?
Guillermo Mulville, Principle Investment Officer, IFC:
Overall, Colombia is among the most lively telecom markets in LatAm. Over the last couple of years, IFC has invested equity and mezzanine across a number of sectors and companies including MVNOs such as Virgin Mobile, Mobile (Avantel) and Finch (Movilred and Recaudo Bogota). We generally see attractive opportunities in broadband, infrastructure sharing and smart cities, among others.
