Chile - Country Commercial Guide
Telecommunications Equipment

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2022-01-25

Overview

Chile has the most advanced and modern telecommunications network in Latin America and there are numerous opportunities for growth. The Chilean telecommunications sector is privatized, and telecom operators invest heavily in new technologies and services to capture new consumers. Chile imports almost all its telecommunications equipment generating significant opportunities for U.S. suppliers. U.S. companies should expect to face intense international competition due to the country’s open market and high number of free trade agreements.

The main challenge in Chile’s telecommunications sector is to overcome the existing digital gap by providing internet connectivity to all Chileans in all regions. Due to Chile’s geography, there are many small and isolated localities without any connectivity since it’s not a profitable business for the telecom operators. The Chilean Government is investing in subsidies to develop infrastructure in those areas. The pandemic has increased the need for connectivity since it has become a critical service for the population, especially for people who live in isolated areas without connectivity.

The Undersecretariat of Telecommunications (SUBTEL), which is under the Ministry of Transportation and Telecommunications, is the governmental agency in charge of coordinating and supporting the telecommunications industry in Chile and overseeing the implementation of all new technologies. In May 2020, President Sebastian Pinera announced three key telecommunications initiatives that would be launched before the end of his presidential term in March 2022. The program includes the implementation of the first 5G network in Latin America, a subsea fiber optic cable of 13,000 kilometers to connect South America with Asia, and a new satellite network for Chile. These projects offer great opportunities for U.S. suppliers of telecom technology, products, and services.

Chile was the first country in South America to complete a 5G spectrum auction. In February 2021, SUBTEL auctioned 1.8Ghz in the 700Mhz, AWS, 3.5GHz, and 26GHz bands to Entel, WOM, Claro, and Telefonica. These carriers were granted a telecommunications service concession for 30 years to install, operate, and exploit over a high-speed wireless network, 5G or higher. The companies have up to three years to implement the network, but some networks are expected to launch by the end of 2021 with limited services. This is the highest amount of spectrum that has been awarded at once and it generated $453 million for the Chilean Government. U.S. suppliers of technology and equipment have great opportunities not only in the implementation of 5G network but in the many applications they can offer in different industries, such as mining, health, logistics, and agriculture.

In July 2020, SUBTEL announced the route for the Humboldt Submarine Cable was to begin in Valparaíso, Chile, pass through New Zealand, and terminate in Australia. The length of the cable will be 13,180 kilometers and the construction is expected to begin in 2022.  The partnership agreements recently signed with Argentina in March 2021 and with Brazil in May 2021 will open more financing options for this project and potentially attracting additional investment. 

  Table: Market Size for Telecommunications Equipment

 

2018

2019

2020

2021 estimated

Total Local Production

110

116

95

100

Total Exports

65

65

60

60

Total Imports

815

815

745

765

Imports from the US

244

244

238

265

Total Market Size

1,923

1,702

1,743

1,500

Exchange Rates

649

641

770

 

(total market size = (total local production + imports) - exports)
Units: $ millions
Source: Chilean Customs Data, SUBTEL and information from local industry

Opportunities

In May 2021, the Ministry of Transport and Telecommunications (MTT) and Chilean telecom operators Claro, Entel, GTD, Movistar, Mundo Telecomunicaciones, VTR, and WOM announced the National Agreement for Connectivity to Reduce the Digital Divide, a $2 billion public and private investment initiative to expand connectivity and contribute to the closing of the digital gap. The Chilean Government has allotted significant public resources to SUBTEL to subsidize the construction of digital infrastructure, however, the largest investments will be made by the telecom operators. Several projects that have already been announced and already in progress are included in the agreement:

  • Fibra Optica Nacional (FON): $130 million subsidy from the Chilean Government to connect the six macrozones of the country and will be completed in 2022.
  • Fibra Optica Austral (FOA): $100 million subsidy from the Chilean Government for connectivity in the three southernmost regions of the country. The construction of the cable is in progress.
  • Last-mile projects: $210 million for last-mile projects in 16 regions of the country to bridge the digital division.
  • 5G: Implementation of the 5G network to connect 300,000 people and 199 hospitals in 366 localities under the social compensation model over an 18 month period.
  • Rural Education Internet Connectivity: Improve internet access in educational establishments and gradually increase connection speed in 2,586 schools that will be able to access Internet for the first time, benefiting around 530,000 students.

Other opportunities include:

  • Equipment and technology for implementation of 5G network for 5G applications in health, mining, agriculture, construction, and other sectors. 
  • 5G innovative tools, data analysis, cyber security, network performance, reduce space, IoT
  • Broadband Internet, corporate data communications, IP related services, and wireless applications.
  • Equipment and products for fiber optic networks
  • National emergency communications network modernization.

Resources

Chile does not have a vertical trade show on telecommunications, however, there are other international trade shows focusing on different industry sectors, such as mining, transportation, health, construction, defense, and others. The shows listed below can offer a great opportunity for U.S. telecom companies that offer applications in different industries.

  • ExpoMin, October 25-28, 2021, Santiago, Chile
  • Trans-Port, November 9-11, 2021, Santiago, Chile
  • ExpoNaval, November 29-December 2, 2022, Valparaiso, Chile
  • Chilean Undersecretariat of Telecommunications (SUBTEL)
  • Chilean Association of Information Technology Companies (ACTI)
  • Santiago Chamber of Commerce
  • Chile Telcos

For additional information, please contact CS Chile Commercial Specialist Isabel Valenzuela, isabel.valenzuela@trade.gov