The following factors are responsible for the continued positive outlook of this sector:
-Office automation is a growing trend in both the public and private sectors.
-Import duties for computers (average 7% over CIF value) are relatively low.
-There are many accessible computer suppliers both locally and abroad, particularly in the Miami area.
-There is a growing computer culture, which resulted from government programs aimed at increasing the use of computers/Internet, and modernization of existing systems in government offices as well as in public schools.
-There is a close connection with the U.S., particularly among young Panamanians who have gone to U.S. schools or look with favor on the social networking culture. Internet services, computer magazines, journals, and other literature from the U.S. are widely available.
Computer products from the U.S. are well received and are perceived as incorporating state-of-the-art technology. The U.S. has a strong position in this market with a market share over 60%. Prices for U.S. computers and peripherals are competitive against products from Korea, Taiwan and Japan. The most promising end users are banks, commercial establishments, universities, the Panama Canal, and government organizations.
Sub-Sector Best Prospects
Best prospects are personal computers, LAN equipment, laptops, and laser printers.
The government is a major computer user. It has been committed to increasing use and modernization of computer systems and has promoted the Internet access for most of the population. The Panama Canal and the banking sector are also important buyers of computer equipment and are always current with technology. The Panama Canal has set a high standard for the rest of the government by publicizing all public tenders, both upcoming and awarded, in a fully searchable database that is web-accessible to the public.
The telecommunications sector in Panama was privatized in 1998. Cable & Wireless (a British company) acquired the operation of the national utility. Cable & Wireless improved and expanded a number of services, digitalized all switching stations and upgrading transmission lines to the latest technology. Additionally, two cellular licenses were awarded, one to Cable & Wireless and the other to BellSouth (BellSouth later sold the license to Telefonica, from Spain). On January 1, 2003 all fixed line telecom services in Panama were fully opened to competition and a number of licenses were issued at a nominal fee. In 2007 the government of Panama awarded two additional cellular licenses to Digicel (from Ireland) and Claro (from Mexico). There are over 500,000 fixed telephone lines in the country, and over 3 million cellular lines, giving Panama one of the highest teledensity rates in Latin America. Panama has today one of the most modern and dynamic telecommunications sectors in Latin America. Main competitors in the market are the United Kingdom, Japan, Sweden, France and Canada.
Sub- Sector Best Prospects
Best products are PABX systems, radio trunking systems, satellite-based telecommunications facilities, wireless systems and fiber optics cable.
The competition in the cellular telephony sector opened new opportunities for U.S. exporters of equipment, such as towers and a variety of supporting equipment. Additionally, Cable & Wireless and other companies that recently entered the market continue to modernize the fixed telephone system thus bringing opportunities for exporters of switching equipment, handsets, and a full range of equipment and accessories.
The Government of Panama has recently embarked upon an expansion of wireless internet access to the general population and has awarded a contract to Liberty Technologies, a Panamanian company. Liberty in turn is using WiMax technology from U.S. equipment providers Cisco and its recently acquired subsidiary Navini Networks. While there have been implementation difficulties, the prospect of a blanketed WiMax metro area for new telecommunications services is quite promising. At the same time, new entrants offering VOIP services piggybacking on existing networks have complained of market barriers that may, in the long term, inhibit competition and competitive pricing.