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Chile - Market Intelligence Report
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Market Intelligence Reports provide an invaluable mix of vital market data and background information, including telecoms regulation. Chile's telecommunications market has been fully-liberalised since 1994, and competition is now allowed in every area of telecommunications service provision. However, the dominant operator in the market remains Compania de Telecomunicacoes de Chile SA (CTC, but trading as Telefonica CTC Chile). CTC claims that the Chilean telecommunications services market was worth US$4,230 million in 2005, up by 7.8% over the previous year. Competition in the local service market began in 1981, when concessions to provide local service in certain areas of the Santiago metropolitan region were granted to Complejo Manufacturero de Equipos Telefónicos (CMET) and Compañía Telefónica Manquehue (now GTD Manquehue.net). Competition increased in 1995 as local service concessions were awarded to GTD Telesat, VTR Telefónica, and ENTEL Telefonía Local (ENTEL Phone, a subsidiary of ENTEL). Certain of the companies have had their concessions modified to extend their operating areas. Currently, nine companies are operating services in the local market. Six companies began offering long-distance services when the multicarrier system was introduced on August 27, 1994: CTC Mundo, ENTEL, Chilesat (a subsidiary of Telex-Chile, but now part of the Telmex group), VTR Larga Distancia (acquired by CTC Mundo in late-1998 and renamed Globus 120), BellSouth Chile (now part of Telefonica Moviles de Chile), and Telefónica del Sur Carrier (a subsidiary of Compañía Nacional de Teléfonos, a VTR company). Currently, 26 companies are operating long-distance services in Chile, of which 15 account for 99% of all long-distance traffic, but only three operate their own long-distance networks. During the last three years, the competitive environment has fostered significant merger and acquisition activity, focused on the cable TV, cellular, and long-distance markets. The two leading cable TV operators merged in the second quarter of 2005 and the resulting entity - VTR-Metropolis - covers more than 90% of the pay-TV market and has increased its presence in the broadband/fixed telephony sector where it is now a major competitor to CTC Chile. Meanwhile, CTC Chile launched a TV-over-ADSL service in mid-2006, In the fixed-line/data communications sector, privately-owned GTD Teleductos acquired struggling broadband operator Manquehue.net in the summer of 2005. In the mobile sector, Telefonica Moviles acquired CTC's mobile communications business in July 2004 before acquiring BellSouth Chile's mobile business in January 2005; Telefonica Moviles is now the market leader with 45% of the market as of September 2006. Telefonica Moviles' principal rival in the south American wireless sector is America Movil, and this company acquired Smartcom PCS in August 2005 (renamed Claro Chile in mid-2006). Claro Chile remains the smallest of the country's wireless operators, but America Movil aims to revitalise the company and aggressively drive subscriber acquisition. It has also begun replacing Claro's CDMA network with a more adaptable GSM platform. There has also been a significant increase in competition, with the entry of new operators in the market (primarily in the long-distance and data transmission business) as Mexico's Telmex acquired AT&T Latin America's Chilean business and Chilesat/Telex-Chile. Early-2005 also saw Telecom Italia International sell its controlling interest in ENTEL to former shareholder Almendrahl. The domestic fixed-line sector should also benefit from the licensing of additional wireless frequencies in late-2005. These enable operators to offer WiFi and WiMAX-based services. CTC Chile, Telmex Chile, and VTR-Metropolis all secured licences (Telmex acquired the sole nationwide licence), but have yet to act on them while a legal challenge brought by CTC Chile is heard.
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