German telecoms vendor Siemens [NYSE:SI] has won a contract worth USD54 million to build a GSM network for new player Colombia Movil. The equipment supplier plans to deploy a network which will cover all of Colombia’s departmental capitals and major urban areas by the middle of the year, although the cellco itself has said that the time frame is too aggressive; it does not expect to see the network up and running until October at the earliest. Siemens aims to use the contract to expand its reach throughout Latin America; it hopes that through establishing a presence in a large market such as Colombia it will be able to push into the local handset market as well. The German vendor is a minor player in the Latin American handset sector, although it does boast GSM network agreements with Telecom Italia Mobile (TIM) in Brazil and Venezuela.
Colombia Movil, a joint venture between Colombia’s two largest fixed-line telcos ETB and EPM, will enter a market dominated by sister companies Comcel, which provides A-band services to the eastern region of the country, and Occel which operates in the west. It won its PCS licence in January this year, and hopes to become a serious competitor to the smaller players BellSouth and Celcaribe, within the next few years. Although the arrival of international operators has boosted growth, Colombia’s wireless market is still poorly developed with around 3.93 million subscribers at the end of 2002 – a penetration rate of 9.2%.