Since being liberalized in 1991, the Colombian telecommunications sector has added new services, expanded coverage, improved efficiency, and lowered costs. The sector has had the second largest (after energy) investment in infrastructure (54 percent) since 1997. However, the economic downturn between 1999 and 2002 adversely affected telecommunications. During this period, Colombia's telecommunications industry lost US2billiondespiteaprofitofUS1 billion in local service. In June 2003, the government liquidated the state-owned and heavily indebted National Telecommunications Company (Empresa Nacional de Telecomunicaciones—Telecom) and replaced it with Colombia Telecomunicaciones (Colombia Telecom). The measure enabled the industry to expand rapidly, and in 2004 it constituted 2.8 percent of gross domestic product (GDP). Telefónica of Spain acquired 50 percent plus one share of the company in 2006.
As a result of increasing competition, Colombia has a relatively modern telecommunications infrastructure that primarily serves larger towns and cities. Colombia's telecommunication system includes access to 8 different international Submarine cable systems, INTELSAT, 11 domestic satellite Earth stations, and a nationwide microwave radio relay system.
The country's teledensity (the density of telephone lines in a community) is relatively high for Latin America (17 percent in 2006). However, there is a steep imbalance between rural and urban areas, with some regions below 10 percent and the big cities exceeding 30 percent. Bogotá, Medellín, and Cali account for about 50 percent of telephone lines in use. By the end of 2005, the number of telephone main lines in use totaled 7,851,649. Colombia Telecom accounted for only about 31 percent of these lines; 27 other operators accounted for the rest.
Colombia's mobile market is one of the fastest-growing businesses in the country. In mid-2004 mobile telephones overtook fixed lines in service for the first time.
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