FNE launches investigation into handset sales

2 Feb 2015

Chile’s National Economic Prosecutor (FNE, Fiscalia Nacional Economica) has begun an investigation into certain practices in the mobile market which it believes may be hindering growth, El Mercurio reports. FNE is investigating the potential impact of several practices relating to the sale of handsets, such as including zero-cost devices as part of 18-month contracts. The agency has expressed concern over the offerings, which oblige customers that wish to change provider to pay the remaining value of the device in order to do so. According to the FNE, the practice could act as an artificial barrier to competition by ringfencing the incumbent’s customer bases. Further, the FNE is investigating whether or not the three main players in the sector, Movistar, Entel and Claro, deliberately hindered rival Nextel and former mobile network operator VTR by restricting their handset portfolios to exclude devices that would work on their competitor’s networks. Whilst Nextel only uses spectrum in the 1700MHz/2100MHz band, its larger rivals use frequencies in the 850MHz, 1900MHz and 2600MHz ranges. Existing regulations prevent operators from locking devices to their own networks, but limiting the devices available to customers will have the same impact, whilst circumventing the current rules.