Chile Telecom Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The Chilean telecom market (henceforth referred to as the market studied) is expected to register a CAGR of 1.82% over the next five years. Key telecom companies, such as Movistar Chile, Entel Chile, VTR Chile, Claro Chile, and WOM SA, are based in Chile and promote innovation by making significant R&D investments consistently.

Key Highlights

• The country's transition from 3G and 4G to 5G is still rising. Key telecom players collaborate with the government to deploy 5G networks across the country. For instance, Entel launched the 5G service in December last year, claiming to have one million 5G customers in ten months.
• The growing demand for high-speed connectivity services by customers and increasing spending on the deployment of 5G infrastructure positively influence the growth of the Chile telecom market. For instance, WOM extended its 5G network to cover 246 communes nationwide, and the 5G network is available to 73% of the country’s urban population.
• Key players in the telecom market are expanding their mobile networks. For i65nstance, Entel plans to invest more than USD 665 million in its domestic and Peruvian operations in the current year. The investment is focused on the enhancement of its mobile networks.
• According to OECD, Chilean broadband connection can download at a speed of 189.36Mbps. In the future, the demand for high-speed internet services will grow and thus create new growth opportunities for the telecom market.
• Due to the COVID-19 pandemic, a large portion of the Chilean population was forced to stay at home constantly, and many opted to work from home, due to increased broadband consumption. Post COVID-19 scenario created an unexpectedly high demand for mobile, fixed broadband, fixed voice, pay-TV, and OTT services.

Chile Telecom Market Trends

Rising demand for Fixed Broadband Services

• The Fiber-to-the-home (FTTH) service is expected to remain dominant across the broadband service category. The increase in FTTH broadband services will drive the telecom market growth positively. For instance, On Net Fibra, fibre-to-the-home (FTTH) network reached three million homes in Chile.
• Government authorities are working with private telecom service providers to expand their broadband services. For instance, the Chilean government completed Southern Fibre Optic (Fibra Optica Austral, FOA). Through this project, it provides connectivity service to more than 536,000 users in 15 districts of the southern zone of Chile.
• According to the Chile Regulatory Telecommunications Authority (SUBTEL), the number of fixed internet accesses in Chile climbed by 13.4% last year. The demand for deploying fixed broadband services will significantly grow, creating new opportunities for the telecom market.
• During the COVID-19 pandemic lockdowns, people preferred the work-from-home mode and thus the market witnessed an unprecedented demand for high-speed internet. For instance, WOM partnered with Aleppo to launch a high-speed fixed broadband service. Deployment of fixed broadband service to remote locations will bring growth opportunities for the telecom market.
• Fixed broadband penetration is anticipated to increase during the forecast period, driven by ongoing efforts by the government to expand fixed broadband coverage and services across the country, particularly in rural areas. According to the Ookla Speedtest Global Index, Chile ranked second with a median fixed broadband download speed of 219.34 Mbps in September this year.

Rising demand for OTT and PayTv Services

• The COVID-19 pandemic accelerated the trend of people opting for entertainment at home; thus, increasing the active usage of OTT streaming services and Pay Tv services. For instance, according to SUBTEL, pay TV subscriptions grew 2.4% in April last year, reaching a penetration rate of 54.1%.
• Increasing mobile subscribers will significantly raise the demand for OTT (over-the-top) services. For instance, Movistar Chile offers IPTV service (Internet Protocol television), and new features integrate over-the-top (OTT) providers, including Amazon Prime Video, Netflix, and YouTube, for customers, thus creating new growth opportunities for the telecom market.
• According to the Ookla Speedtest Global Index, Chile ranked 75th with a median mobile download speed of 25.63 Mbps in September this year. Customers are migrating to mobile-based OTT services, thus creating new growth opportunities for the telecom market.
• For instance, in April this year, HISPASAT signed an agreement with ENTEL to extend the direct-to-home (DTH) managed service that caters to the entire country until the end of 2024. During COVID-19 and post-COVID-19, DTH subscribers started growing and the rate of cable TV subscribers declined significantly. Thus, DTH service providers offering HD video content are anticipated to further drive the growth of the market.

Chile Telecom Market Competitor Analysis

The Chilean telecom market is moderately fragmented due to ongoing partnerships and recent advancements in the market. Some major players in the market studied include Movistar Chile, Entel Chile, VTR Chile, Claro Chile, and WOM SA.

In March 2022, WOM commercially launched its 5G network. 5G coverage was made available over 99 communes across several regions, including Valparaiso, Biobio, and the Santiago Metropolitan Region.

In July 2022, Phoenix Tower International made plans to acquire up to 3,800 sites from WOM Chile by the end of 2024. The deal is valued at USD 930 million.

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• The market estimate (ME) sheet in Excel format
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