What Claro's 5G debut means for the Chilean market
Chilean telecommunications operator Claro, which is in a merger process with VTR, will enter the 5G segment after receiving the green light from sector regulator Subtel.
Last week Subtel issued a provisional authorization for Claro to use part of the spectrum in the 3.5GHz band to offer 5G services, turning it into the fourth operator offering the technology.
Rodrigo Ramírez Pino, president of the Chilean chamber of digital infrastructure, told BNamericas that Subtel's decision is in line with "new standards of competition to promote fair, competitive and affordable markets."
"In a market as dynamic as that of telecommunications, the incorporation of a new player makes sure that we maintain competitiveness with a focus on customers," he added.
Subtel said in a statement that the country's antitrust court (TDLC) and the supreme court had both recommended it to ensure "the existence of at least four operators in the market to guarantee competitiveness, and thereby promote greater offerings and better prices for mobile phone users.”
The optimal use of the spectrum is of "national interest" and more competition will lead to greater choice and lower prices, said telecommunications undersecretary Claudio Araya in a press release.
In order to use the 3.5GHz frequencies commercially, Claro must present a technical project "similar to the one presented in the 2021 [5G] auction" as well as an additional investment plan for the provision of 5G services in locations with connectivity difficulties.
“The company having to present a technical project could be an opportunity to finally solve the problem of the rural world, its connectivity, digitization and digital transformation,” said Ramírez.
Chile had 2.04mn 5G lines at the end of 2022, just over a year after the technology was introduced.
Local player Entel led the mobile internet market (3G, 4G and 5G) at the end of last year with a 34.7% market share. It was also the leader in the 5G segment with nearly 1,200 active sites and 1mn customers, according to the company's own data.
In mobile internet, WOM was second with 25.4%, followed by Movistar and Claro with 21.2% and 16.9%, respectively. VTR commanded 1.2% of the market.
BACKGROUND
In the 5G auction, Subtel made available 150MHz in the 3.5GHz band. Claro participated but only received spectrum in millimeter bands.
Before the auction, some operators had assigned spectrum for fixed wireless services.
Entel had 100MHz for nationwide coverage, while Claro had 50MHz. In the case of Movistar, it had 50MHz available for use in the Aysén and Magallanes regions, as did VTR for Arica y Parinacota and Araucanía. Telefónica del Sur also had 50MHz, for Los Ríos and Los Lagos, according to information provided by Ramírez.
In 2021, Claro bought 30MHz of spectrum in the 3.5GHz band from Entel for US$12mn. This last portion of spectrum, which had also been awarded to Entel for fixed wireless services, had a 10-year duration at the time of the purchase.
Claro later committed to sell 10MHz in the 3.5GHz band and another 10MHz in the AWS band as part of the restrictions imposed by the economic prosecutor’s office (FNE) for its merger with VTR.
Last year, Claro requested that its two 3.5GHz concessions be authorized to offer mobile data transmission services with 5G technology. In February, TDLC ruled favorably for Subtel to modify the concessions.
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