The Chilean supreme court recently dismissed a lawsuit regarding spectrum regulations, which means the government is on track to issue three personal communications services licenses.
Isabel Valenzuela, commercial specialist at the U.S. Embassy in Santiago, said the PCS licenses are expected to be awarded in November, more than a year later than originally planned. Another source said bids would be examined in November and licenses awarded in March.
The spectrum allocated for PCS was previously occupied by the military. Cellular operators, including BellSouth Chile and VTR Telecomunicaciones, appealed to the court after the Chilean telecom regulatory body, Subtel, said the three PCS license winners would be required to pay for relocating military users, according to Andrea Katz, an analyst with Latin America for International Technology Consultants Inc. Earlier this year, ITC reported the cost to move military users was estimated at $96 million, which outraged potential bidders.
And while Subtel decided to award the three licenses “free of charge,” a key criteria for licensing is a bidder’s potential to achieve the most widespread network coverage in the shortest amount of time, ITC said. To ensure prospective licensees will hold firm on their promises, Subtel is requiring a $50 million “boleta de garantia,” or deposit, to be returned after build-out plans are implemented, said ITC in a March report.
New PCS operators will have to compete with established cellular operators in the country. Startel-with almost 51 percent share of the wireless market-is a recent joint venture between cellular operators VTR and Compania de Telefonos de Chile. VTR is owned 51 percent by Chilean conglomerate Luksic Group and 49 percent by SBC Communications Inc.
BellSouth holds 32.7 percent market share in cellular service and Telecom, of which Motorola Inc. and Mobile Telecommunication Technologies Corp. hold interest, claims a 16.5 percent market share.
BellSouth International spokesman Tom Crawford said his company is in the running for one of the PCS licenses. Startel will not bid on PCS because the joint venture, owned 55 percent by CTC and 45 percent by VTR, will enable the new company to offer nationwide cellular coverage. Startel plans to invest in upgrading its current networks and developing other wireless services, reported Bethesda, Md.-based ITC.
PCS will operate in the 1.8 GHz to 1.9 GHz frequency bands.
In May 1995, Chilean telecom regulator Subtel announced a regulatory framework for PCS, but in October postponed its plans to issue licenses after Contraloria General de La Republica, which approves concessions, determined the spectrum use plan must be modified. Licensing was then postponed to March 1, 1996. Once the lawsuit regarding payment for incumbent relocation was filed, another delay was imparted.
Despite the lag in licensing PCS, Chile-along with Mexico and Argentina-has led PCS efforts in Latin America. About 85 percent of the Chile’s inhabitants live in cities. There is about one telephone for every nine people.
