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Entel looking to reach 25-30% share of Chile's fixed broadband market
![Entel looking to reach 25-30% share of Chile's fixed broadband market](https://cdnimg.bnamericas.com/xBbuGroJpFQKLxXqFyxujekIKprCBrdOLCcrYsuBvPcmlHgHVKtsiwZUpsQexAjD.jpg)
Entel Chile is looking to reach a 25-30% share of the fixed broadband market in Chile in the medium term and a 20% share of the Peruvian market with the use of On Net 's shared network.
In Chile, internet penetration in homes is close to 70%, while the OECD average is 90%. “There is still room to grow in the home internet business,” Entel CEO Antonio Büchi said during the Investors Day held in Chilean capital Santiago on Wednesday.
José Luis Poch, Entel's VP for the B2C market, said that there are currently 546,000 income-generating units in the home market, which gives it a 6% share of market revenues.
In fiber, the company has more than 300,000 clients. “We've been growing a lot despite the fact that we don't have very large coverage,” said Poch.
However, competition is stiff in Chile and in the places where Entel has deployed fiber optics, there are an average of five competitors offering home broadband services. On the other hand, in the more than 4mn homes not passed with Entel fiber – but which could be accessed if a US$360mn deal struck with On Net to sell its fiber networks and use On Net's share network is approved – there are an average of only 3.1 operators.
The company reached a market share of 20% in 29 months in the markets where it has deployed fiber and Entel expects similar growth in new sites once it can access the On Net network, assuming the deal gets the go-ahead.
As fiber laying by On Net and other competitors progresses, Entel has seen its share of fixed wireless broadband dip to 3% from 7%. “Where fiber is deployed, there is nothing that can compete, it's a far superior technology,” Poch added.
The executive added that the company will lose users and income from wireless services and said that the company's systems will be relegated to places where fiber cannot be deployed.
AGREEMENTS AND INVESTMENT
According to Büchi, the shared fiber optic network model allows "average costs" for the installation and deployment of fiber optics, enabling the "visualization of highly profitable scenarios in this business."
The executive also said that fiber optic operations allow resources to be redirected to "where we can make a difference," which is in the quality of the mobile network experience.
ON NET FIBER DEAL
The company's agreement to sell its network of 1.2mn homes passed with fiber optics to On Net Chile last October. If the deal is approved by antitrust authority FNE in Chile, it will allow Entel to add around 3mn homes passed to its coverage.
On Wednesday it was reported that the companies submitted a proposal to the FNE to resolve possible risks to competition from the transaction. Following that presentation, the process was suspended for another 15 days, according to a statement sent to investors by Entel.
In Peru, Entel entered into an agreement with Telefónica and KKR through which the latter is acquiring the fiber optic networks of Entel and Movistar. Entel will have a 10% stake in the new wholesale fiber company. That will allow it to raise its coverage to more than 2mn million homes passed from the current 100,000.
The firm also sees a great opportunity for growth in Peru, as broadband penetration remains one of the lowest in Latin America.
Büchi estimates that Entel can make savings of US$600mn in network deployment by using shared fiber networks.
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