Chile could update MVNO regulation to foster competition

Chile could update MVNO regulation to foster competition

Chilean regulator Subtel has begun a public consultation over whether MVNOs should receive lower wholesale rates from network operators to allow them to compete more effectively.

Subsecretaría de Telecomunicaciones de Chile noted that allowing new brands to gain market share would open up a wider range of services in the market as well as driving down tariffs for consumers.

Currently three operators – America Movil’s Claro, Telefonica’s Movistar, and former state operator Entel – account for 92% of the Chilean non-M2M market, with 26.2 million connections between them at the end of Q2 2017. Most of the remaining 8% of connections belong to WOM, which is the fourth main MNO.

However, there are several MVNOs operating in the market, including Grupo GTD, Simply Moviles and Virgin Mobile. Executives from the latter two MVNOs – both of which use Movistar’s network – publicly complained earlier this year that promotions and tariff reductions that MNOs were able to offer were adversely affecting MVNOs.

Their argument was that while MNOs were able to reduce operator fees, they did not provide MVNOs with a corresponding drop in wholesale charges, meaning that MVNOs were unable to match the tariff cuts and therefore could not compete effectively.

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