The country attracted our attention today is the largest Central American country, Nicaragua, which, however, one of the least densely populated. The country, that has its capital in Managua, is bordered by Honduras to the north and Costa Rica to the south to the west of the country the Pacific Ocean lies; the country's Caribbean coast is part of the Western Caribbean Zone.

From the economic side, Nicaragua has always been a predominantly agricultural country. Country’s agrarian economy has historically been based on the export of cash crops such as bananas, coffee, sugar, beef and tobacco. Light industry, tourism, banking, mining, fisheries, and general commerce are also currently expanding. Nevertheless, the country has the region’s lowest GDP per capita, with about 62% of the population living below the poverty line.

Turning to telecommunication sector, it’s important to note Nicaragua’s fixed-line teledensity and mobile penetration are also the lowest in Central America. Nicaragua thus has the second lowest teledensity in Latin America after Haiti.

Nicaragua has also theoretically liberalized its fixed-line sector, but proper implementation has been delayed by political and legal wrangles. The country has its fixed-line incumbent privatized.

Nicaragua, along with Belize, presents the worst case scenarios in Central America in terms of fixed-line development, since privatization without liberalization places a telecom incumbent in a position of hegemony where it can charge high prices and is under little pressure to improve services.

Broadband sector in Nicaragua is on the lowest stage of development, with only 10% people connected. Most Internet users are concentrated in the largest cities because the rural and marginal areas suffer lack access to the most basic telecom infrastructure. A number of Internet cafés provide public access to Internet and email services, but these are also restricted to the larger population centers.

Meanwhile, the Nicaragua’s government has set a goal to develop a universal service plan for economically depressed rural localities, and to bring Internet access to all state schools.

2004 appeared to be a crossover momentum for the national telecom market. At the beginning of that year, the government sold its remaining 49% interest in Enitel to América Móvil, thus completing telecom privatization. Later the same year, the regulator announced Nicaragua’s fixed-line market to have been opened to full competition by the end of 2004. In August 2004, América Móvil increased its interest in Enitel to 99.03%, and applied for authorization to merge Enitel Movil with Sercom Nicaragua. In October 2004, BellSouth completed the sale of its Nicaraguan unit TCN BellSouth to Telefónica Móviles.

Thus far, mobile and Internet industry in the country appeared to be divided mostly between two national giants: Telefónica Móviles and América Móvil’s Claro. This situation with two largest companies rivaling on the national market, can be called as duopoly.

Importantly, América Móvil appeared to gain leadership on the country’s ICT market, including fixed-line, mobile, broadband, and pay TV.

However, Telefónica’s Movistar represents a very strong but the only Claro’s competitor within the fixed-line and mobile market. In the mobile sector, Movistar holds almost one third of the market, but in the fixed-line sector, it has only about 11% of the country’s fixed lines in service.

Due to a weak regulatory structure and bureaucratic delays, further liberalization aiming to eliminate the duopoly is slow to be implemented. Such a duopoly situation has dampened the competitive drive; therefore, there has been less effort than in neighboring countries to improve quality and lower the prices.

Nevertheless, some competition is expected in the fixed-line and broadband market from mid-2010, as the new operator Yota de Nicaragua, recently entered the market, due to launch WiMAX services.

By the end of the current year, the situation with fixed-line market is not to be improved as the market will probably continue to decline, while mobile market growth slows down. However, according to some estimation, broadband will undoubtedly be the fastest growing sector by the end of 2010, owing to the extremely low Internet penetration levels, and demand that is increasing.

As for the longer-term forecasts concerning the development of the ICT sector it seems much more promising. As GDP per capita should eventually increase, there is a significant growth potential in telecom sector for the future. That will definitely release national ICT market from its legacy of violence and corruption.

Internet country code top-level domain (ccTLD) for Nicaragua is .ni, administered by Universidad Nacional del Ingernieria. Registrations are generally made at the third level beneath second-level names:

• .gob.ni -Nicaraguan government
• .co.ni, .com.ni - commercial entities
• .ac.ni, .edu.ni - educational institutions
• .org.ni: non-governmental organizations
• .nom.ni: personal domains of individuals
• .net.ni: networks
• .mil.ni: military institutions in Nicaragua

Besides, there are a handful of sites directly at the second level, including the registry site itself at nic.ni.

Interestingly, ni is also occasionally registered and used by sites based in Northern Ireland, rather than Ireland's official ccTLD, .ie, or the United Kingdom's official ccTLD, .uk for some political or marketing reasons. Meantime, the .co.ni subdomain is available for this purpose with the clear understanding that .co.ni is a subdomain of the .ni domain as the Nicaraguan ccTLD.

E-commerce sector in Nicaragua is almost completely immature due to the underdevelopment of ICT sector as a whole.

It’s stipulated mostly by the lack of legislative framework in the ICT and e-commerce field. And of course, successful deployment of e-business in the country is impossible without strong ICT base and developed economic infrastructure.

Nevertheless, some good signs in development of ICT sector are seen at present. The national government has also started to participate actively, supporting the deployment of Internet and related services progress. These important factors among others give hope for the further successful development of e-business in this Central American country.