Internet and e-commerce industry in Panama

We are to consider today Internet and e-commerce capacity in one of the Central American countries, Panama. Relatively low populated Panama, situated on the isthmus , is a sort of interlink connecting North and South America, with the capital in Panama City. Currently, the country is an international business center, and has the largest economy in Central America, followed by Guatemala, Costa Rica and El Salvador. Moreover, International Monetary Fund has predicted that Panama is the fastest growing economy in Latin America in 2009. However, the situation with ICT and electronic infrastructure is completely different.

As for the Internet penetration level, it’s very low, with only 28% people currently connected. However, it’s considerably higher the levels seen during the previous years. It may be compared to 1.6% (or 45,000 users) in 2000 and 8% (or 264,316 subscribers) in 2008. Though broadband penetration is lower than in some other Americas’ countries, the significant growth is obvious. Thus, Internet user base is increasing monthly, making up about 1,977% over the last couple of years (internetworldstats.com).
Despite the penetration still remains low, dial-up and ADSL connections are developing rapidly. Actually, the growth potential in this sector is excellent.

The largest ISPs in Panama are represented by:

• Cable & Wireless (CW Panama)
• Telecarrier
• PaNETma
• Telemax Enterprises
• Optynex Telecom
• Clarocom
• Cable Onda
• Columbus Networks
• Servico Nacional Internet (SNI)

  PaNETma, for instance, offers FAST (from 2 to 150 Mbps) symmetric Internet connectivity in/near Panama City and, in special offerings, everywhere in Panama, priced from $80 up to $270 per month.

Cable Onda, the leading cable TV company, has recently started providing Triple Play services (converged broadband, telephony and pay TV).

SNI offers corporate as well as individual Internet access. The company also provides Web consulting and design.

However, the competition is rather slow with the incumbent Cable & Wireless Panamá is averse to unbundle its local network.

Though, in 2003 Cable & Wireless launched an aggressive campaign to penetrate the Internet market with ADSL technology. The Kilobyte price for dedicated Internet access dropped significantly, as the main providers, like Cable & Wireless, Telecarrier and Cable Onda, lowered their rates. So, the long distance sector has attracted several players that led to huge price decrease. The new pricing structure benefited both home and corporate markets, reaching a level of $39 per month for a dedicated 128Kb connection.

Currently, Panama has already 3 world class internet data centers:

• Altec1, the only independent organization
• Cable & Wireless
• TeleCarrier

They all provide basically the same quality of services including redundant access to several submarine fiber optic networks, security, fire detection and fire suppression system, access control, CCTV, electrical generator and UPS, co-location space, rack, cabinet and private suite.

Meantime Panama has become an attractive country for ICT investments, with significant telecom and Internet infrastructure, a liberalised market, serviced by five global fibre optic cables.

.pa is the country code top-level domain (ccTLD) for Panama in the Domain Name System of the Internet for Panama, administered by NIC-Panama and sponsored by PANNET and Universidad Tecnologica de Panama. Two years registration agreement costs $139, that is cheap enough, compared to prices in many developed countries of Europe and Americas (http://www.rwgusa.com).

Besides, there is a number of second level domains in use in Panama:

• net.pa - reserved for ISPs
• com.pa
• ac.pa
• sld.pa
• gob.pa
• edu.pa
• org.pa
• abo.pa
• ing.pa
• med.pa
• nom.pa

Speaking about electronic business sector in Panama, it’s important to notice the country has the ambition of becoming an e-commerce hub for the Central American region, moreover, it is obviously beginning to make progress towards this goal.

The Government’s significant role in electronic commerce business deployment is obvious. In July 2001 an e-commerce bill was signed into law by Panama's then President, Mireya Mosocoso. This new law, that boosted Panama’s e-commerce industry development, supposed to be the first of its kind to be implemented in Central America. The Regulation only allows online transactions with users from outside of Panama, so that their income would be tax-exempt. Online gambling operations must prove economic solvency and previous related experience, according to www.lowtax.net.

The Government has also established the City of Knowledge Tecnopark in the former Ft. Clayton US Military base. The Tecnopark represents a mixture of commercial space, offices, technical facilities and ancillary residential properties.

Such important players like Global Crossing, MCI, Sky Online, new world communication, Cable & Wireless, Nautilus and Telefonica have decided to install Network Operation Centers in Panama, taking advantage of the geographical location providing an abundant supply of submarine fiber optic communications circuit on both coasts and which makes possible interconnection close to North and Latin America, Asia, Europe, Africa and the world over redundant routes.

There is an increasing number of companies, supplying e-commerce solutions, some of them are listed below:

• Earth Tec Inc. - offers web hosting and ecommerce support. Describes packages and rates, with discussion of tax advantages for foreign companies
• Hosting Panama - offers web hosting, co-location, offshore internet services and dedicated server hosting. Includes services, rates, and contact information
• Panama Space - describes website hosting services offered 
• Grupo Axis - is a privately owned internet consulting company that offers a variety of products and services for e-commerce development, including strategy, management, security, includes client list and contact information
• Cyber Cast Intl - Offers shared dedicated, and co-located hosting services in Panama City data center. Details of plans and hosting facility provided.

Panama’s geographical location, between two Americas, its good telecommunications links, ICT infrastructure enhancement and its sophisticated business infrastructure, all these make country a strong competitor on the world e-commerce market. However, it’s still a lot to be developed and perfected.