Market Trends of Chile Telecom Industry
Rising Demand for 5G to Drive the Chilean Telecom Market
- As 5G technology offers faster data speeds and lower latency than other mobile networks, the country's demand for 5G connection and services is growing. Additionally, 5G connectivity provides seamless streaming, faster downloads, and real-time communication, driving the need for telecom services in the country.
- The growing popularity of video streaming, online gaming, and other data-intensive applications drives the demand for higher data speeds and capacity. With 5G, telecom operators may meet the increasing demand for mobile data consumption, resulting in higher revenue opportunities in the market.
- The deployment of 5G networks may contribute to economic growth and enhance the competitiveness of a country, attracting investment, supporting innovation, and driving productivity gains across various sectors. As a result, there is a strong focus on expanding 5G infrastructure in Chile to promote economic development and stay competitive on a global scale. For instance, in May 2022, the Chilean government introduced a new strategy, Chile Digital 2035, to reduce inequality and foster the country's digital transformation.
- Furthermore, in June 2023, the Inter-American Development Bank approved a USD 100 million loan to support the Chilean digital government agenda. Through the digital transformation of the state, both at the national and local levels and the municipal level, this operation aims to increase efficiency and equity in the delivery of citizen services. Such an initiative for digital transformation by the government is creating demand for 5G services and is expected to add growth to the market in the coming years.
- Moreover, according to GSMA, by 2025, Brazil is expected to have the highest share of 5G mobile connections in Latin America, with the technology accounting for 20% of total mobile connections in the country. Mexico and Chile followed with a 14 % share.
- The demand for 5G services is growing exponentially due to the technological transition. As a result, the telecom companies operating in the country are investing in 5G networks to maintain the company's leadership. The government initiatives related to digital transformation and 5G investment by the players operating in the market in Chile, owing to the rising adoption of 5G, are driving the growth of the telecom market in the country.
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Data and Messaging Services to Dominate the Market
- The country's data and messaging services in the telecommunication market include the Internet, text message, etc., from both fixed and mobile networks. These services are rising in Chile due to the adoption of 5G services, fiber-based optical fixed Internet connection, etc.
- Telecom providers are forming partnerships, getting licensing agreements, expanding fiber and copper-based network infrastructure, and deploying 5G services in the country to support the increasing demand for data and messaging services in the country. For instance, in October 2022, VTR Communications and Claro Chile collaborated to establish a joint venture offering fixed and mobile services, including Internet and text messaging. The JV is anticipated to provide greater benefits for consumers and businesses and further stimulate social and economic progress by extending telecom access and coverage across the country.
- The digitalization of business processes, such as using internet-based services in BFSIs, governments, retail, manufacturing, healthcare, etc., in the country, is creating a demand for telecom service providers' data services across industries and the people to use digital services, which include internet data packages for both prepaid and post-paid data services. In addition, vendors in the market are expanding their data service offerings packages to support the market growth in Chile.
- The market has been witnessing acquisitions, investments, and collaborations among telecom providers to increase their market presence in mobile and fixed data services, which shows the market potential for the segment in the country. Moreover, the number of mobile broadband connections in Chile is estimated to reach 24 million by 2028.
- Additionally, in March 2022, Mundo, a Chilean fiber-optic internet provider, planned to develop its fiber network in the country with an investment of USD 200 million. The company would invest this capital in adding 6,000 kilometers of fiber optics to its already existing 7,000 kilometers of fiber, with an additional 4,000 miles planned for 2023 in Chile. The increasing investment by the vendors to expand their telecom services is expected to support the market adoption of fiber-based telecom data services.
- Therefore, the expansion of the optical fiber network, the deployment of mobile internet networks such as 4G and 5G, and the need for high-speed data and messaging services across the industry verticals and retail consumers to support the country's digitalization strategy in 2035, is fueling the market for data and messaging services in the telecom sector of the country.
