Network Policy

Telecommunications Regulation: Stage 4

Panama has experienced many changes in telecommunication industry in past fifteen years.  The telecommunication market was privatized in 1996 and de-regulated in 2003. The telecommunication infrastructure has greatly improved as a result of investments made by Cable and Wireless after privatization.   As a result of the de-regulation, new choices in telecommunication service providers for national and international calls were made available. Competitive rates offered by the new providers have benefited both individuals and businesses.  The National Public Services Authority ("Autoridad Nacional de los Servicios Públicos" or "ASEP”), an autonomous state agency, was setup to manage Panama telecommunication industry.

Key Dateline:

1996: The Panama government began the process of privatization of the National Institute of Telecommunications (INTEL).
1997: Prior to privatization, INTEL was the sole provider of telecommunication services.  In 1997, Cable and Wireless bought 49% of INTEL telecommunication services. The government owned the remaining 51%. 
2003: The telecommunications market was de-regulated and other companies were allowed to enter the market. Cable and Wireless monopoly on national and international services ended with emergence of new companies’ such as Telecarrier Inc., Clarocom, Advanced Communications, Galaxy Communications Corp., System One World, Tricom, and Voip Comunicaciones de Panama. 

Panama – key telecom parameters – 2010 - 2011

Panama’s fixed-line teledensity is well below the average, by about 3 percentage points,  for Latin America and the Caribbean countries.

Competition is also limited in the broadband sector, where Cable & Wireless companies are not willing to unbundle its local network and has secured a virtual monopoly in the delivery of ADSL access. The only competition is across technologies such as from cable modem and WiMAX services.

The mobile sector has been flourishing with penetration well above the 100% milestone and about 30% higher than the regional average. The arrival of new mobile providers around the start of 2009 has resulted in high levels of promotional activity and steep price reductions in mobile plans.

Internet penetration is expected to grow further in 2012 as a result of Panama government’s ‘Internet for All’ project.  In 2010, Panama became one of the first countries in the world to offer free wireless internet access nationwide, reaching about 80% of the population. The National Internet project does not compete with private Internet providers, because its aim is digital inclusion and not the provision of high-speed access.

ICT Trade Policy: Stage 4

Panama’s  government has worked to liberalize the telecommunication, in accordance with the Information Technology Agreement (ITA), which has given great opportunities to foreign companies, especially the US,  to invest in telecommunication sectors.  Panama’s tariffs are already relatively low – an average of 7% for industrial goods and around 15% for agricultural products.

“Panama maintains an essentially liberal trade and investment regime, characterized by relatively low tariffs and few non-tariff barriers, which is in consonance with the vital role that trade plays in Panama’s economy” according to a WTO Secretariat report on the trade policies and practices of Panama.

In October 2011, USA passed a Free Trade Agreement with Panama and as a result of this agreement; Tariffs will drop to 0% for U.S. Exports to Panama.   

Market Estimates - Telecommunications Equipment - A Top U.S. Export Prospect for Panama