Rise in interconnection fees receives mixed response

18 May 2004

There has been a mixed reaction to the decision by regulator Subtel to hike interconnection fees paid by telcos to the country’s PTO Telefónica CTC Chile by 40%. Since the ruling on 4 May, fixed and wireless operator Entel has said it will raise prices for its internet and long-distance telephony customers to cover the estimated USD9 million annual bill it will receive from CTC. Entel is preparing to file an official complaint against the ruling and will be backed up by long-distance operator Chilesat. Chilesat is in the process of being bought out by Mexican group Telmex, whose owner Carlos Slim has been vocal in his criticism of Subtel’s decision. Not all telcos are passing on the costs to their customers, however, with minor fixed line operator Manquehue Net saying that the rate rise has meant it has had to accelerate its restructuring plan and lay off close to 20% of its workforce to absorb the additional costs.