The country boasts advanced telecoms infrastructure and well-balanced regulation, meaning it also benefits from healthy competition in all areas.
Michael Wheeler, EVP and head of global IP network business at NTT Communications, said that although Brazil is experiencing significant investment following the 2014 FIFA World Cup, Chile is also seeing “impressive industry-related growth”.
Fixed-line services in Chile are decreasing but mobile penetration is gaining traction countrywide, and Chileans are also turning to mobile for broadband access.
A legal hurdle preventing the expansion of 4G networks in the country has also been removed by the country’s government, allowing for further growth and competition.
In March last year, and ahead of schedule, Chile’s largest operator Entel launched 4G services in the country. The network comprises 803 sites and covers all major population regions in Chile, the operator claims.
But Entel was not the first to do so, with the country’s third-largest mobile player, America Movil’s Claro Chile, becoming the first to market with its LTE network in June 2013.
Claro Chile collaborated with Nokia for the launch, and Raul Romero, head of customer business team America Movil at Nokia, described the launch as a “landmark accomplishment in one of the most advanced communications markets in Latin America”.
Telefonica’s Movistar Chile also beat Entel to the post and was the second to launch services in November 2013, following reported investments of $1.25 billion in consolidating its 3G network since 2011.
Robert Munoz, CEO at Movistar Chile, promised a further investment of $200 million in its 4G network over the next three years, and in March 2015, penned a deal with Ericsson to upgrade its 700MHz network to LTE. This is due to be commercially available at the end of 2016.
The Chilean government launched an initiative in 2013, focussed on increasing internet penetration in the country in order to boost its already booming economy. A task the country’s top three appear to be eagerly accepting.
The plan – Agenda Digital Imagina Chile 2013-2020 – is focussing primarily on bringing internet access to 80% of the country’s homes. Free Wifi hotspots are being launched in communities across Chile and are now thought to be present in more than a quarter of Chilean towns.
“We want [online businesses] to grow as a share of the economy,” said Chilean president Sebestián Piñera. “In fact, we expect the digital economy to reach 10% of the GDP by 2020.”
Late last year, industry lobby group Atelmo proposed an investment of $26 billion up to 2024, in a bid to increase the reach of these LTE and fibre-based broadband networks.
William Pickering, CEO at Atelmo, said that $22 billion of this investment could be provided by industry players, while the remaining $4 billion should be funded by the state.
The proposal also suggests a change in existing regulation, and a new Undersecretary of Telecommunications has been appointed to oversee any proposed changes.
Level 3 has a strong presence across Latin America, including Chile, and Gabriel Holgado, SVP of wholesale services in Latin America, congratulates governmental effort in the region.
“Governments have taken a strong role in developing national broadband projects into remote and rural areas to support the expected population and economic growth,” he said.
“The region continues will new opportunities for growth and expansion through innovation and collaboration.”
Nextel Chile, the country’s fourth largest mobile player, has been at the centre of much M&A activity over the last 12 months.
In August last year, financial firm NII Holdings sold off Nextel Chile, its Chilean subsidiary, to Fucata, a consortium of firms comprising Argentinean media company Grupo Veintitres, US private equity firm Optimum Advisors and London-based investment company ISM Capital.
Nextel Chile posted $24.5 million and $16.7 million in losses during Q2 2014, and a loss of $14.6 million in revenue overall for 2013.
The company’s chief executive, Steve Shindler, said that Nextel Chile had fallen short in its bid to improve operational performance.
“Despite the actions we’ve taken to improve our operational performance, we have fallen short in our efforts, leaving the company with a liquidity position that is not sufficient to support the business,” he said.
In January this year, the operator was then acquired by UK-based investment fund Novator for an undisclosed amount.
Chile is one of the world’s longest countries, spanning 4,300km from tip to toe, and is served by six submarine cable systems; four international – South America Crossing (SAC)/Latin American Nautilus (LAN), South America Pacific Link (SAPL), South America-1 (SAm-1) and Pan American (PAN-AM) – and two national – Segunda FOS Canal de Chacao and FOCS Quellon-Chacabuco.
Despite some setbacks in 2014, Chile looks to be headed for a brighter future with the government and its key operators on board.
