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Chile is the best equipped country in Latin America for telecommunications since it reformed its telecommunications sector by liberalizing its laws to allow private investment. Since then, the Chilean telecommunications sector has grown at rates higher than the rest of the economy and this sector also revolutionizes the market introducing new technologies and more benefits for the consumers. In 1998, increased telecommunications activity was concentrated in the industry's mobile communications sector. In 1998, the total market for the mobile telephone communications sector totaled US$ 320 million.
The introduction of Personal Communication System (PCS) services, multiple marketing plans offered by the operators, and additional investments in infrastructure, make the mobile communications sector a dynamic, competitive, and growing sector.
The Subsecretaria de Telecomunicaciones (SUBTEL), which is part of the Ministry of Transportation and Telecommunications, is the regulatory and supervisory body for all telecommunications. The law requires that all imported telecom equipment be compatible with the Chilean telecommunications network. Importers must obtain certification of their equipment from one of the local entities that is registered with the telecommunications authorities for this purpose.
The regulatory framework of the telecom sector favors competition and transparency among all players in this industry. SUBTEL, grants concessions free of charge. This facilitates the entry of new competitors and allows existing competitors to expand and overlap their service areas. This also stimulates investment and helps increase the rates of penetration in the different areas of business.
Chile's telecommunications market is not only very dynamic but also extremely competitive. Startel and BellSouth are the companies that hold cellular licenses to operate nationwide and Entel PCS and Chilesat PCS won licenses to provide PCS services throughout the country. Two different technologies are present in the country to provide PCS. These are CDMA, which Chilesat uses, and GSM, which Entel uses.
The new PCS licenses awarded in 1998 increased the number of cellular phone companies both in Santiago and the Fifth Regions as well as in the rest of the country. The existing non-PCS cell phone companies have already made progress towards digitizing their networks. This means they are now able to offer the same services as PCS and thus compete with companies holding PCS licenses.
SUBTEL estimates that wireless communications subscribers will expand to 1,600,000 in 1999. Investments from the various companies will reach approximately US$ 400 million by the end of the year. Local experts foresee mobile traffic growing between 30 to 40 percent during 1999.
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