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Telecommunications

Chile's telecommunications sector is completely privatized and probably the most advanced in Latin America. The Under Secretariat of Telecommunications (SUBTEL) regulates the sector, sets standards and issues licenses and concessions. Since privatization began in 1988, huge infrastructure investments have been made by the private sector. As a result, Chile’s telecom industry grew an average of 20 percent annually over the last decade. Investments in modernization of equipment and implementing new technologies will continue. It is estimated that the telecom sector will continue growing at an estimated rate of 15 percent annually.

The mobile telephony market is the fastest growing subsector in the telecommunications market. Chile has a population of 16.7 million and there are 19.8 million mobile phones in the market. Number portability was recently introduced in Chile, generating stronger competition among mobile communications operators. Due to the high penetration of mobile services, the fixed line market in Chile is declining. Residential fixed lines accounted for 62% of the market in 2009 but fell 6.2% in 2010. Commercial landlines account for 35% of the market.

Chile’s telecom industry showed great deficiencies after the earthquake in February 2010, so the government had to promote the development of the communications infrastructure. Chile’s authorities hope to improve connectivity, education, and, most important, the integration of all of Chile’s regions. Both the private and the public sectors’ efforts to extend current fixed lines and mobile infrastructure have slowly resulted in increased revenue for operators. The government has also tried to modify current regulations to allow companies to focus efforts on expansion.

Telecom imports are critical since the high-tech telecom equipment is not manufactured locally. Local manufacture is limited to some copper cable and telephone exchange.

U.S. products are highly regarded for their high quality. However, the United States market share is affected by the strong competition from manufacturers of other countries, especially from Asia, that offer lower prices for similar of equipment even though it is not of the same quality.

Opportunities

The introduction of number portability in Chile is generating fierce competition among operators of mobile communications. This system will allow subscribers of different mobile companies to switch from one company to another without losing their number. This is generating fierce competition among operators of mobile communications that must find new and additional products and services to compete. Providing an excellent service and coverage is no longer enough. Chile offers a good potential for all value- added services and corporate communications services, such as hot lines, home security services, automatic collect-calls. Also, according to recent studies completed in Chile, the trend for young people it to use their cell phone for playing music and playing games.