MIchelle Clancy ©RapidTVNews | 10-08-2011

Colombia's national broadband plan and smartphone adoption will provide a platform for data and video growth through 2016, according to a new report from Pyramid Research.

With the Government setting the right conditions to achieve its goal of quadrupling the number of Internet connections in the country to 8.8 million, including mobile Internet, Pyramid expects connectivity to become one of the most dynamic contributors to total mobile revenue growth in the coming years. "Pyramid projects that mobile broadband and infotainment services together will represent 50% of total data revenue in 2016," said Pyramid Research Analyst Juliana Gomez.

That has big implications for the uptake of mobile video. According to the Cisco Visual Networking Index, Mobile video traffic was 49.8% of total mobile data traffic at the end of 2010, and will account for 52.8% of traffic by the end of 2011. Two-thirds of the world's mobile data traffic will be video by 2015.

"More spectrum availability, intense handset vendor competition and decreasing smartphone prices have fuelled mobile content consumption and wireless broadband connectivity in Colombia," said Gomez. The Colombian Government, through the Plan Vive Digital, has set a very ambitious agenda to increase broadband access and usage in the country, by putting special emphasis on the availability of infrastructure for broadband coverage.

The Colombian telecom market generated $7.3 billion in 2010, and we estimate it is going to be worth $7.7 billion in 2011, a 7% increase, as a consequence of the economic recovery and the increase in data services. We expect the market to maintain growth levels at around 3% annually in the following five years."

The fastest growing segments will be mobile data, fixed VoIP and broadband Internet. Mobile voice, although sharply slowing down, will remain the main source of revenue, and mobile data will continue to grow to become the second source of revenue in 2016.

Increasing competition and the very ambitious governmental broadband plan will drive the adoption of broadband access. On the other hand, Pyramid expects dial-up Internet service revenue to decline and become very small compared with the scale of the data market. Traditional fixed circuit-switched service revenue will also decline to account for 15% of total market revenue in 2011, from 19% in 2010