Subtel considering 80% drop in MTRs

20 Nov 2013

Chile’s undersecretary for telecommunications Jorge Atton has proposed an 80% drop in mobile termination rates (MTRs) from 2014, saying that the rates were unusually high in comparison to other Organisation for Economic Cooperation and Development (OECD) nations, Diario Financiero writes. Atton has suggested a rate of CLP11.9 (USD0.022), compared to the existing level of CLP60, although wireless operators Entel, Movistar and Claro suggested MTRs of CLP32.64, CLP36.62 and CLP31.74, respectively. The official noted that the reduction should have little effect on the operator’s income, impacting a change of no more than one percentage point of EBITDA margin, and should not harm future investment. Atton went on to add that the current MTR was a barrier to competition, adversely affecting in particular newcomers VTR and Nextel, as well as mobile virtual network operators (MVNOs) such as Virgin as these providers are obliged to pay out disproportionately large sums which are not offset by their own earnings from termination.