The problems Chile's WOM must solve in 2025

Chilean operator WOM is facing increasing pressure from regulator Subtel over non-compliance with infrastructure commitments, while also grappling with bankruptcy proceedings.

In late December, Subtel decided to execute a guarantee involving 115,166 UF (inflation-linked units, 4.43bn pesos or US$4.42mn) linked to the implementation of national fiber optics network FON in the regions of Antofagasta and Atacama.

The deadline to complete the works was extended several times but ultimately expired December 19, over 28 months later than initially planned. 

While inspecting the works, Subtel found that it was impossible to start services within the agreed timeframe.

“We have reported various circumstances to our regulator that need to be considered, including crimes committed by third parties, such as the recent theft of 50km of fiber, which indicate an increase in criminal activity in the area that undoubtedly generates involuntary impacts and delays in a project that is unstable and topographical, which makes it very complex,” the company said in a statement.

"WOM remains firmly committed to completing the missing details of this project according to the established standards in the shortest possible timeframe, considering these challenges," it added.

In March 2024, WOM completed the south-central FON stretch covering 25 localities in the regions of Ñuble and Biobío. 

WOM is also responsible for fiber connectivity in Arica y Parinacota, and started operations in the so-called center-north and center macrozones.

The company must also finish 5G deployment, which requires significant investment.

WOM competitors Entel and Movistar, however, have fully complied with the infrastructure commitments linked to the 2021 spectrum auction.

The company did not provide any figures about the progress of 5G deployment when asked by BNamericas. Last year, deployment was estimated to have reached 60-70%, with most recent reports saying the rollout was "almost complete."

Subtel attempted to collect a US$50mn guarantee for delays in 5G deployment but the case went to court.

A recent deal with noteholders, which includes a capital injection of US$500mn, could allow WOM to exit chapter 11 bankruptcy proceedings in early 2025 and continue with its investment plans.

The deal “also establishes a clear path to deleveraging our balance sheet, fully funding our business plan, including the remainder of our 5G buildout, and offering meaningful recoveries to all unsecured creditors,” CEO Martín Vaca Narvaja said in a statement in September.

Based on an internal document, daily La Tercera reported that WOM could invest 199bn pesos this year, presumably to complete the delayed projects. Afterwards, investments will reach 80bn pesos annually, similar to the amount disbursed in 2024.

La Tercera also reported that WOM estimates revenues of 629bn pesos in 2024, down 8.1%. 

In September, WOM operated 1.4mn of Chile’s 5.35mn 5G connections.