Netline seeks damages over MVNO issues

27 Mar 2014

Chilean mobile virtual network operator (MVNO) Netline has demanded compensation totalling USD117.5 million from Claro, Entel and Movistar in a case filed with Santiago’s Civil Court on the grounds that the trio barred the provider’s entry to the market. Local news outlet Diario Financiero writes that the operator’s appeal is based on a Supreme Court ruling from two years ago which fined the trio USD2.7 million apiece for preventing the access of MVNOs to the sector by charging excessive fees. Netline has called for compensation, claiming that, had the three network operators not blocked its entry into the market, it would have begun offering services in Q1 2007 rather than 2012, when it finally launched. As such, Netline claims that it would have been able to have a larger impact on the market from 2007 onwards, as there was greater untapped demand at that date. Compounding the issue, the delay allowed rival MVNO Virgin to beat Netline to the punch, with the UK-based provider launching a year earlier, in 2011. According to Netline, if it had been able to launch in 2007, it would have been able to develop a loyal customer base, making the entry of global MVNOs into the Chilean market more difficult. The plaintiff claimed that it would have achieved a 40% share of the MVNO market in the first year, although ‘the gradual entry of new players would result in a progressive decrease to an estimated 32% [market share] in 2011,’ whilst the subsequent launch of Virgin Mobile Chile in 2011 would have led to Netline’s share of the MVNO segment decreasing to around 23% by end-2013. Netline now offers services via a deal struck with Movistar, but claims that the agreement ‘impedes, restricts and hinders’ its ability to compete with network operators. According to the most recent data published by sector regulator Sub-Secretaria de Telecomunicaciones (Subtel), Netline had signed up 3,263 subscribers by end-June 2013, whilst rival Virgin claimed 76,861 users at that date.