Defined as one of the most open and mature industries in Latin America, the Chilean telecom sector enjoys full competition and a modern infrastructure and regulatory system.
Thanks to its openness to international investment and a proactive government, the national telecom industry is expected to keep delivering growth, great news for incumbent operators Claro, Movistar and Entel, and for American Tower and Torres Unidas, who both operate substantial tower portfolios in Chile.
4G LTE gains momentum
The three major Chilean carriers - Claro, Movistar and Entel - have all successfully launched 4G LTE networks.
Claro was the first to upgrade its network and launched 4G LTE back in June 2013, followed by Telefonica Movistar in November.
Entel Chile has announced the upgrade in March 2014 and is now offering LTE-2600 to its 10,000 subscribers through 803 sites across the country.
Last month, the Chilean telecom regulator (Subtel) allocated three additional tranches of spectrum in the 700MHz band to Entel, Movistar and Claro. The terms of the concession require carriers to deploy 4G networks nationwide within 24 months including 1,281 remote regions, 503 schools and 13 roads.
An interesting feature of the concession is the obligation for carriers to open their networks to MVNOs. A move in line with the governmental push for enhanced competition and higher quality of service.
A sleepy year for tower transactions
The Chilean telecom tower industry hosts several active towercos and may be subject to considerable change over the course of the next few months.
To date, American Tower is reported to own and operate 1,150 co-located sites while Berkshire Partners-backed Torres Unidas owns an additional 500 independent towers.
Major carriers such as Nextel - recently acquired by Chilean Entel from NII Holdings - VTR Wireless and Movistar could all decide to sell their tower portfolio in order to expand their 4G LTE networks and this would create enticing opportunities for AMT, Torres Unidas and any prospective new market entrants.
The last tower transaction recorded in Chile took place in Q4 2012, when Telefonica Movistar sold 558 towers to AMT for US$96 million. In the same period, Torres Unidas acquired 400 towers from Telefonica Movistar for an undisclosed amount.
Government increases its commitment to ICT sector
As featured in our interview with Francisco Briceño from AJ Ingenieros, in 2012, the Chilean Senate approved a new law establishing clear rules regarding telecom tower installation.
Specifically, the law sets parameters with regards to towers spacing in sensitive areas near schools, hospitals, gardens etc. The law favours tower sharing and the installation of camouflaged towers in order to preserve the landscape and reduce the visual impact of greenfield projects.
Earlier in 2013, the Chilean President Sebastián Piñera, along with the Minister of Transport and Telecommunication, Pedro Pablo Errázurriz, presented the Digital Agenda “Imagina Chile 2013-2020”. The Agenda sets a clear roadmap for the long-term development of the national ICT sector and features thirty specific initiatives and goals that aim at facilitating telecom access for the entire Chilean population.
The first target is for the ICT sector to represent 10% of GDP by 2020 through the widespread use of technology and, in order to achieve this target, the Government has established five strategic priorities and specific initiatives for each of them. Interestingly, the Government has compiled very clear monitoring indicators for each main strategy, as shown in the table below.
These indicators, specifically related to digital inclusion, connectivity and entrepreneurship, add up to a comprehensive list including educational and government related initiatives.
The Chilean telecom industry live in Orlando
Further information and insights on the Chilean telecom industry will be provided during the TowerXchange Meetup Americas, taking place in Orlando, 20-22 May, in co-location with PCIA Wireless Infrastructure Show.
At the Meetup, key executives active in the industry will share their views on the development of the Chilean telecom tower sector.
Olivier Puech, CEO LatAm for American Tower and Daniel Seiner, CEO of Torres Unidas, will participate in the Towerco keynote panel on Wednesday 21 May at 11:30am. Ricardo Loor, COO of Torres Unidas, will host a roundtable on Chile on Tuesday 20 May at 10:30am.
Contact me at aneri@towerxchange.com for more information and to sign up for the Meetup.
