Telecom market in Colombia is growing - what can towercos expect?

Despite highly competitive environment, regulatory barriers, and often difficult market conditions, as the demand for wireless communication continues to grow, the market for telecom towers in Colombia is likely to continue to expand, providing opportunities for growth for existing companies and new entrants.

Colombia is a country with a rapidly growing telecommunications industry, thanks to its strong economy and growing population. The telecommunications infrastructure companies in Colombia play a crucial role in this growth, as they are responsible for building and maintaining the infrastructure that allows for the delivery of telecommunications services. In this article, we will take a closer look at some of the major telecommunications infrastructure companies in Colombia and their impact on the industry.

Colombia is one of the most important telecommunications markets in Latin America. The country has a population of over 50 million people and a growing economy, which has made it a prime location for mobile tower companies to set up shop. However, the initial enthusiasm has calmed down significantly after the tower market in the experienced a wave of mergers and acquisitions, with a few bigger multinationals buying off the smaller BTS enterprises and consolidating their positions on the market.

These companies provide the infrastructure needed for mobile networks to operate and connect people throughout the country. In this article, we will take a closer look at the main mobile tower companies in Colombia and their role in the country's telecommunications landscape.

In recent years, there has been a growing demand for telecom towers in Colombia, as the country's telecommunications market continues to expand. This has led to an increase in the number of tower companies operating in the country, and it has also led to increased competition among existing companies.

Despite the competitive nature of the market, there are still opportunities for growth in the Colombian telecom tower industry. As more people in the country gain access to mobile and internet services, the demand for towers is likely to continue to increase. This creates opportunities for companies to expand their operations and grow their market share.

America Movil’s Claro owns the majority of towers in Colombia

The biggest operators in the countr is Claro, a subsidiary of America Movil, the largest telecommunications companies in Latin America. Claro operates in Colombia as a mobile phone service provider and also provides internet, television and telephony services. The company's 4G and 5G networks are widely spread in the country, making the company a major player in the Colombian telecommunications market. In 2022, America Movil completed the carve-out of its infrastructure assets into a separate entity called Sites, a new pan-LATAM tower company, with a presence in 15 countries in the region. 

Another major player in the Colombian telecommunications market in the Spanish giant Telefonica. With a presence in over 20 countries, in Colombia, is known for its ability to provide coverage in urban and rural areas. However, the operator has been repeatedly voicing concerns about the high price tag said to of Colombian license, comparing to international norms. In 2019, Telefonica Colombia made no bids in the nation’s 4G spectrum auction, which saw rivals Claro and Tigo acquire three 10MHz blocks in the 2.5GHz band. After that, rumours emerged that British investment firm Novator Partners (owners of WOM, who entered the market shortly after) could launch a bid for its controlling stake. 

In late 2022, the operator gave up its concession to use frequencies in 2.5GHz band, once again citing high licence costs that were hampering profitability. Decision is linked with Telefónica’s desire to reduce capital exposure in Latin America – which will result in continued trend towards asset sale and leaseback, along with potential transfer of in-house services to external providers, such as tower companies.

WOM Colombia (registered as Partners Telecom Colombia and owned by UK-based investment fund Novator Partners) has positioned itself as a market disrupter in emerging telecom markets. It has entered Colombia in 2021, following a meteoric rise in Chile – from a complete newcomer in 2015 to owning a sizable 21% market share. In Colombia, the growth has been more modest (counting the market share gained through the acquisition of Avantel), but still measuring over a million subscribers. In the first year alone, the carrier’s investment in infrastructure and operation development exceeded US$880 million, resulting in it being able to provide 4G coverage to over 80% of the population, equivalent to 46 million Colombians across 725 municipalities. The company will continue to invest in strengthening its network infrastructure to smaller cities and rural areas throughout the country, targeting the completion of 6,000 new antennas throughout the national territory. 

In 2022, Tigo Colombia has finally switched off its 2G network, deactivating around 2,000 sites and reframing frequencies for 4G use. The move has been long-planned, and only the smallest percentage of the operator’s users were still using the services, although in some regions in Latin America, the percentage of 2G users remain steady. Claro Colombia is planning the deactivation of its own 2G network in February 2023. 

Tigo’s parent company, Luxembourg-based US-listed Millicom, has just made the headlines due to a potential buy out by Apollo Global Management and Claude Group, rumoured to reach almost $10 billion, including about $6.9 billion in debt. It is not yet clear whether the deal will go ahead and how it may affect the company’s operations in Colombia, Panama and El Salvador. 

These companies play a crucial role in the growth and development of the Colombian telecommunications industry. In addition, other companies on the market include a state-owned Empresa de Telecomunicaciones de Bogotá (ETB), a primarily fixed line and broadband provider, ETB has been operating as a MVNO in collaboration with Tigo Colombia for over 10 years. This company is the main provider of telecommunications services in the capital city of Bogotá, and it has a strong presence in other major cities throughout the country. ETB provides a wide range of services, including fixed and mobile telephony, internet, and television. The company also operates a fiber-optic network that covers a large portion of the country.

In the area of 5G technology, Colombia lags behind countries such as Chile and the Dominican Republic, as well as Brazil, which opened 5G services in 2022. In Colombia, 5G is currently in the very early phase. 

The Ministry of Information Technologies and Communications awarded the country’s major operators with temporary 3.5GHz licences in early 2020, and Claro, Tigo, Movistar and ETB all went on to stage successful 5G mobile trials in the ensuing twelve months. The regulator’s 2019 5G consultation also featured the 600MHz band and various millimetre wave bands, starting with 24.25GHz-27.5GHz.

The regulators made tentative announcements for the 5G spectrum auction to take place by the end of 2021, the proposed date was then postponed, and the auction date revised to take place by the end of 2022. As both these projections didn’t materialise, the industry is asking whether or not to expect authorities to make a move on the issue in 2023. 

Regardless, officials have clearly indicated that when the auction does finally happen, the licensing terms will apply rural coverage obligations on the eventual licence winners, as it did after the 700MHz spectrum sale in December 2019. The issue of improved connectivity, especially in the underserved areas, remain a hot political issue for the country – despite the fierce opposition to 5G technology by some rural communities, that made headlines during the global covid pandemic.

 

In January 2023, the Colombian Ministry of Communications revealed that nine companies submitted a formal expression of interest in securing 5G spectrum (in 700MHz, 1900MHz, 2.5GHz, 3.5GHz and 26GHz bands).

 

As expected, these are the established players Claro, Tigo, Movistar, ETB and WOM. In addition, a number of less expected entities have also expressed their interest in acquiring 5G licences. These include a seemingly Texas-based enterprise Colombia WB Hots, an online television services provider Global Play, an ITC company EGC Colombia and multi-industry service providers OSC Top Solutions Group. Another potential bidder, an established public utility company Empresas Públicas de Medellín (EPM), is awaiting a regulatory framework that may enable it to participate in the bidding as a non-telecommunications company. Judging from the experience of the 5G spectrum auction in Brazil, the non-traditional companies on the list, may persevere with obtaining the licenses in order to try and enter the potentially lucrative market, and sell services to their existing clients or expand their business models.

So far, eight of the potential bidders expressed interest in obtaining frequencies in the 3.5GHz band, and six companies – in the spectrum in the 26GHz band. Claro and Colombia WB Hots have both expressed interest in acquiring frequencies in all available bands with a national coverage area, using 3.5 and 26GHz spectrum for 5G. All possible participants and the sector as a whole are, however, concerned about the price of spectrum given the state of the economy, and the investments that the deployment of infrastructure and technology could involve. 2023 will show how much the Colombian government is willing to listen and change in order to attract the bidders and generate the income it aims to from the auction.

The Colombian telecom market is a dynamic and competitive industry, with several major players. As the demand for wireless communication continues to grow, the market for telecom towers in Colombia is likely to continue to expand, providing opportunities for growth for existing wireless infrastructure companies and new entrants.

In recent years, wireless infrastructure companies in Colombia have experienced significant growth as the country continues to develop and modernise.

One of the largest telecom tower companies in Colombia is SBA Communications. They have a strong presence in Colombia, reporting the ownership of just under 1,000 towers in the country, as of Q4 2022. The company provides a wide range of services, including site leasing, site sharing, and energy solutions. American Tower follow with just under 700 towers, and mobile network operator America Movil’s new infrastructure carve-out Sites Latinoamerica, is currently the third largest tower owner in the country with just over 560 towers. Although primarily active in Mexico, an earlier America Movil’s carve out Telesites still owns just over 300 towers in Colombia, although we expect potential Telesite’s exit from the market and consolidation of its assets under Sites brand. Phoenix Towers International follow closely with just under 200 sites. Continental Towers also reports a similar number, but the count likely includes non-macro sites.

Wireless infrastructure companies in Colombia play a crucial role in connecting people and businesses throughout the country. These companies provide the necessary infrastructure for wireless networks to function and are constantly investing in new technologies and equipment to improve the quality of their services. As the country continues to develop and modernise, the demand for wireless infrastructure is likely to continue to grow, making these companies an important part of the Colombian economy.