Chile raises over US$450mn in biggest spectrum tender yet

Chile has assigned frequency blocks in the 3.5GHz band, concluding the first tender for 5G spectrum in Latin America.

In the country's biggest-ever spectrum tender, the government raised US$453mn in four rounds (700MHz, AWS, 3.5GHz and 26GHz), which is 512% more than what was collected in all previous spectrum tenders combined, according to regulator Subtel.

A total of 1.8GHz was awarded for mobile broadband.

Mobile operators WOM, Telefónica Movistar and Entel won 50MHz each in the most contested round, disbursing 32bn pesos (US$45mn), 117bn pesos and 100bn pesos, respectively, for 3.5GHz spectrum.

After three years of preparation, the tender “surpassed all expectations, generating a considerable amount of revenue collection, which demonstrates the attractiveness of the Chilean telecommunications sector,” telecommunications undersecretary Pamela Gidi said in a press release.

WOM, which is controlled by UK fund Novator Partners, was the big winner, being the sole company to scoop spectrum in all four contests.

WOM snapped up a 20MHz block in the 700MHz band, 30MHz in the AWS band, and 50MHz in the 3.5 GHz band, paying around US$150mn.

These add to 400 MHz the company acquired in the 26GHz band, which WOM had already been awarded for the development of projects in Valparaíso and Metropolitan regions.

In addition to the 3.5GHz tender, WOM was the sole winner of the 700MHz and AWS contests, while Claro and Entel also won spectrum in the 26GHz band.

The government estimates 5G will lead to additional investments of US$5bn over five years, with US$3bn to be invested in the initial stages of operation.

The government also sees potential for 6,000-10,000 new jobs.

Overall, 366 localities with no connectivity plus 199 hospitals must be connected to the new networks using the frequencies assigned to the winners, according to Subtel’s requirements. 

Airports, ports, research centers and higher education institutes are also expected to benefit from greater connectivity.

In the case of the 700MHz contest, winner WOM must also deploy 4G along 9,000km of highways and roads throughout the country.