Chilean antitrust tribunal, the TDLC, has rejected Movistar Chile’s proposed conditions for its compulsory auction of 25MHz of spectrum in the 800MHz frequency band. The TDLC said that the June 2006 sale completion deadline requested by Movistar is unacceptable, and that its proposed conditions of auction could generate unfair ‘competitive consequences’. The tribunal has now asked the Telefónica Móviles (TEM) unit to submit a new proposal.
Movistar is being forced to sell the spectrum as a condition of TEM’s merger of subsidiaries Telefónica Móvil de Chile (TM Chile) and BellSouth Chile. It merged the two in January 2005 to form a single cellular powerhouse with almost half the country’s subscriber market, under the Movistar brand name. Prior to the forming of Movistar, TM Chile held 25MHz in the 800MHz band and 20MHz in the 1900MHz band, while BellSouth had 25MHz in the 800MHz band and 10MHz in the 1900MHz band. Once the auction goes ahead Movistar will hold 55MHz between both bands, compared to 60MHz currently held by nearest rival Entel PCS and third-placed Smartcom’s 30MHz.