 Chile: Telecoms and technology background
FROM THE ECONOMIST INTELLIGENCE UNIT
Chile has developed the most advanced telecommunications infrastructure and regulatory system in Latin America. This is a result of the early privatisation of the industry, and a sustained policy to encourage innovation and competition.
The country pioneered telecoms privatisation in the region in 1988 with the sale of a controlling stake in the Compañía de Telecomunicaciones de Chile (CTC), which had a near-monopoly on fixed-line services. The fixed-line telephone network has been fully digital since 1993, and has ample capacity to meet demand. A mobile phone service was inaugurated in 1989 and has expanded rapidly.
Chile has by far the highest level of mobile penetration in Latin America, with 61.8 mobile subscribers per 100 population in 2004 (compared with 36.4 in Mexico and 37 in Brazil). With the rapid development of mobile telecoms, and more recently broadband services, telecoms investment was steady at almost US$700m in 2002-04, but as markets mature future investment is uncertain.
Chile’s advanced telecoms infrastructure has set the stage for rapid development of the information technology (IT) sector. Internet penetration is the highest in the region: there were 25.5 Internet users in 2004 per 100 population, compared with 15.8 in Argentina, 11.2 in Brazil and 8.6 in Mexico. All large and medium-sized businesses, as well as 45% of small businesses, have access to digital networks, and one-fifth of micro-businesses are connected to the Internet. E-commerce is growing rapidly and is actively promoted by the government, which accounted for 30% of Internet-based transactions in 2004. Internet-based businesses and services are estimated to have generated US$8.5bn in sales in 2003, according to the Santiago Chamber of Commerce.
According to the IT industry association, the Asociación Chilena de Empresas de Tecnologias de la Información (ACTI), the value of Chile’s information technology (IT) sector rose by more than 10% in 2004, to US$1.1bn. The main contributors are software and IT services segments, responsible for about 60% of the total billing.
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SOURCE: The Economist Intelligence Unit
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