Colombia has $200 million to widen its Internet access

Colombia is offering international companies $200 million to make the Internet available to its businesses and consumers, which is good news for U.S. companies coming on the heels of the White House’s announcement that a free-trade agreement has been completed with the Latin American nation and will soon be sent to Congress for approval.

“The whole [Colombian] economy is going to be rising to a new level of growth,” said John Murphy, vice president for international affairs at the U.S. Chamber of Commerce. “So when it comes to the infrastructure of the new economy, whether it’s transportation, finance or, in this case, telecom and Internet, it looks like a very good time to be in the Colombian market.”

What’s needed for this project is a fiber-optic network — used for high-speed Internet — large enough to reach 700 towns. The nation’s current infrastructure reaches only 200 towns.

Colombia also will grant at least two 4G licenses for mobile and wireless Internet to the highest bidders later in the year. Cellphone penetration there already is at about 100 percent for voice plans, but this could open the market to smartphones, mobile applications and data plans.

“American companies are very welcome,” said Diego Molano Vega, the Colombian minister of information communication and technology, who came to the District this week to promote his “Vive Digital” plan. “We are looking for a partner that can invest with us.”

Colombia already has reached out to several American companies, including Verizon and AT&T, about the possibility, Mr. Molano said.

Many of Colombia’s Latin American neighbors, particularly Brazil, could follow suit soon with their own communication upgrades, which would create even more opportunities for U.S. investors, said Eric Farnsworth, vice president of the Council of the Americas.

“In some ways, Colombia is trying to get ahead of the curve,” Mr. Farnsworth said.

Mr. Molano sees this as a way to bring the Colombian masses into the 21st century. With a population of about 45 million, most of the current Internet connections are for the upper class, he explained. The rest of society has little access to the Web. Furthermore, small businesses make up 96.4 percent of the economy there, but only 7 percent use the Internet.

“Technology can change their lives,” he said. “We want our Colombians to have more productive and easier lives.”

But selling the idea to Colombians could be difficult, Mr. Molano said. Right now, few businesses and consumers there recognize the value of the Internet because it’s tailored to developed nations such as the U.S. That’s why he is also looking for companies to build Web applications that make the Internet more relevent to his country.

“They do not see the value, because there aren’t applications for them,” Mr. Molano said. “It does not make them sell more, does not make them buy cheaper, does not make them more productive.”

Colombia is talking with companies, including Coca-Cola, to solve this problem. For example, if Coke can develop an online payment system that lets Colombian businesses order from the Internet, it would save the beverage producer money, Mr. Molano explained. They could then share the savings with the businesses by giving them 10 perent more product for the same price.

“The mom-and-pop shop is going to see the value of that,” he said.

This also could present opportunities for smartphone sales, Mr. Farnsworth said. Once the 4G network is in place, Apple Inc. could start selling the iPhone and Google Inc. could do the same with Android phones. At that point, mobile app developers would get a chance to tap the market, as well.

Greg Schwartz, founder of Mobatech, an app company in Birmingham, Mich., said companies will have to be careful to develop apps that fit with their culture. His popular “Mobile Checkbook” app is sold in 70 countries around the world, and he would be interested in extending sales to Colombia.

“It’s a challenge going international, becaue you have to localize your application,” Mr. Schwartz said. “That’s an important question you want to answer before you go into the market.”