Colombia 4G auction: watch out Claro!

Posted on Jun 28 2013 - 11:56am by Rico

Diego Molano, Colombia’s minister of information technologies and communications, called it, “the auction of the decade”.

claroAnd what an auction it was. In what is probably one of the largest auctions in the ICT sector in recent years in Latin America, Colombia raised COP$770.5bn ($400m) from the sale of 4G licences to five companies this week.

Carlos Slim’s América Móvil, which operates under the Claro brand in Colombia and already holds over two-thirds of the country’s market, were among the winners.

But it will also face competition from the other four licence winners. They include Telefónica’s Movistar, which controls close to one-third of the Colombian market; the local branch of México’s Avantel; and ETB-TIGO – a consortium of Empresa de Telecomunicaciones de Bogotá, a Colombian state-owned telecoms, and Millicom International; and DirecTV.

Medellín-based UNE-EPM already holds a licence, while Mexico’s Azteca was left without a prize.

The companies are expected to expand coverage across one of world’s most populous Spanish-speaking nation of 46m people, as well as providing 4G services to Colombia’s 450,000-strong armed forces.

Molano believes that this would bring “more competition to the Internet and mobile communications. Better quality and prices for Colombians.” His minister set a base selling price of $250m for the auction, notwithstanding, according to a note sent to investors by Bancolombia, Molano also had other reasons to be so cheerful:

Looks like it was hugely successful from the Ministry of Communications point of view, raising COP770,000mn (US$405mn) which is about 70% more than expected.

Those resources will be used to finance social projects that will bring Internet to far-flung corners of the Colombia.