By: Raul Katz (*)
The empirical evidence, the cold data, shows that, those nations that have a greater deployment of broadband and optimal levels of digitization turn out to be more resilient in the face of macroeconomic and social situations that we have to face in the short and medium term.
The analysis of the economic and social conditions that Latin America and particularly Colombia has been facing, after the pandemic; Facing a process of socioeconomic recovery, it is being severely affected by the adverse conditions of inflationary processes, high interest rates, currency devaluation and a generalized recession of the economies worldwide.
Given this, the empirical evidence, the cold numbers, continue to show that those nations that have a greater deployment of broadband and optimal levels of digitization turn out to be more resilient to this whole situation.
We recently presented the study, 'The role of the digital economy in the economic recovery of Colombia' and the main conclusion of the analysis is that the use of ICT and connectivity are configured as the fundamental support of all economic activity and the leverage of the country's productive sector and economic growth that, finally, is transformed into benefits for the closure of the social gaps that still affect millions of Colombians.
The Colombian digital ecosystem welcomed the news that one of the objectives of a progressive government is the complete democratization of ICT and the expansion of digital connectivity. Another conclusion that the study we published left is that this democratization cannot take place without the establishment of conditions for public policies and sectoral regulations that promote legal certainty and the efficiency of the use of the radioelectric spectrum., as a fundamental asset for the provision of telecommunications services.
Colombia, particularly, has an important challenge in terms of spectrum valuation, since its prices currently constitute the most serious barrier and one of the main limitations for the development of digitalization in Colombia. The data indicated that, if spectrum prices were adjusted to market values, operators could increase cumulative capital investment in mobile networks by 154% in 5 years, which would be reflected in a 33.3% increase in 4G coverage and, consequently, 7.14% in mobile broadband penetration.
This greater connectivity, through a reassessment of the regulatory and fiscal frameworks, would respond directly to the government's efforts to democratize connectivity and lead the country to overcome inequalities and improve regional competitiveness.
The diagnosis estimates that a 10% increase in the country's digitization index could reduce the distance that separates Colombia from the United States in terms of multifactorial productivity by 8.6%. This would also have a positive social consequence: Colombia would achieve employment growth of 2.2%.
Colombia cannot delay the commitment to advance in the deployment of broadband and the strengthening of the digital economy, since this directly contributes to its socioeconomic development.
The new government has in its hands a decision that could be historic. With the renewal of more than 70% of the spectrum available in 2023, the Executive can generate the conditions that allow the acceleration of investment by operators. The demand for mobile data does not stop growing, but the industry will not be able to respond to the challenge of closing the digital gap without adjusting the costs established in the spectrum assignment and renewal processes.
(*) Raúl Katz is a recognized international expert in the telecommunications sector.
