At the crossroads of the North and South American continents and extended along the narrowest strip of land between the Atlantic and Pacific oceans, Panama has huge strategic importance. Panama has favorable economic prospects, with GDP growth being steady at between 5% and 6% annually. This has had a positive effect on the country’s telecom market, which has also grown steadily and attracted investment from relevant international operators. Fiber optic and coaxial cable connectivity are available in cities and some rural areas.
Panama had a 68.62% internet penetration rate by the June 2019, which is higher than the Central American average. Fixed-line broadband penetration rate has kept growing in the past few years, as well as LTE and fixed broadband reaching both corporate and end users.
Panama’s fixed-line teledensity is well below average for the region, and the number of lines continues to fall as customers adopt mobile-only solutions for making calls and for internet access. Competition remains limited in the broadband sector, where the incumbent CWP has resisted unbundling its local network and as a result has secured a virtual monopoly in the delivery of DSL access. The only cross-platform competition is from cable modem and WiMAX services. On the other hand, the mobile sector has flourished in recent years. The Autoridad Nacional de los Servicios Públicos (National Authority for Public Services) is the telecoms regulator in Panama.
Panama’s dollar-based economy rests primarily on a well-developed services sector that accounts for more than three-quarters of GDP. Services include operating the Panama Canal, logistics, banking, the Colon Free Trade Zone, insurance, container ports, flagship registry, and tourism and Panama is a center for offshore banking.
Panama’s transportation and logistics services sectors, along with infrastructure development projects, have boosted economic growth; however, public debt surpassed $37 billion in 2016 because of excessive government spending and public works projects. Future growth will be bolstered by the Panama Canal expansion project that began in 2007 and was completed in 2016 at a cost of $5.3 billion – about 10-15% of current GDP. The expansion project more than doubled the Canal’s capacity, enabling it to accommodate high-capacity vessels.
Strong economic performance has not translated into broadly shared prosperity, as Panama has the second worst income distribution in Latin America. About one-fourth of the population lives in poverty; however, from 2006 to 2012 poverty was reduced by 10 percentage points.
Cable & Wireless Panamá is a branch of the worldwide telecom giant Cable & Wireless (CW), which controls the company owning 49% of the shares of the former state-owned incumbent after the beginning of the liberalization of the telecom sector in 1997. The company still controls 90% of the fixed-line network and 70% of the fixed broadband market. In mobile telephony it operates under the +Móvil brand. In 2015, the company was purchased by Liberty Global PLC.