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Pyramid Research has released a report covering the regulatory environments of key Latin America markets. This release provides an update on the main regulatory initiatives being introduced in the region. The aim is to highlight regulatory advances on such key issues as local loop unbundling, VoIP, tariff regulation, number portability and others.
Chile’s regulator, Subtel, has been busy for the past ten months as the government-approved acquisition of BellSouth by TEM and Metropolis by VTE dominate the Chilean telecoms market.
Subtel continues to draft regulations pertaining to VolP and LLU, although the prospect of regulations on both seems only mildly popular among the country’s significant players. Perhaps just as popular has been Subtel’s hounding of local operators on the point of lowering their rates. On the mobile front, Nextel Chile has overcome all of the legal challenges to its interconnection with other mobile operators and will likely launch its digital trunking services in mid 2005.
Tariff Regulation
Telefonica CTC and Entel, despite Subtel’s request, will not reduce their broadband tariffs for broadband Internet services, explaining that they have doubled concentration speeds without raising fees. Subtel maintains that reducing prices is the most effective strategy for increasing broadband take-up. Chile’s broadband rates are among the highest in the region, but Subtel argues that such persistently high prices would be a significant obstacle to uptake by middle and lower class sectors. Nonetheless, operators have set out alternative plans to invest in broadband network expansion as a solution to increasing household penetration.
Local Loop Unbundling
After a prolonged public consultation in 2004, Subtel is now in the process of composing unbundling regulations for the Chilean telecommunications market. Local loop unbundling is designed to inject more competition into the fixed telecommunications market, and will spell out rules regarding collocation among other technical elements that are required for its implementation. Subtel believes that this system would further stimulate the industry’s growth in the country, particularly for broadband. The operators themselves are likely to be more cautious in their proposals to ensure the protection of their sizeable investments going forward.
VolP
Subtel is aiming to publish draft rules for IP telephony by the end of the year with the goal of having the first licenses issued by the beginning of 2006. Despite VolP service availability to the corporate market, unclear regulations caused improper technology management resulting to VolP’s limited widespread deployment. However, established operators fear that there will be limited requirements with respect to investment, coverage, and QoS, thus allowing potentially new players to cherry-pick profitable segments at a relatively low cost. CTC has led the charge in speaking out against VolP, followed by Entel and VTR to a lesser extent.
The full text of this article and other key Latin America countries regulatory outlook is available now. Please contact info@pyr.com for more details.
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