Telefonica in talks to offload Movistar Chile

6 Jan 2021

Spanish telecoms group Telefonica is reportedly in negotiations regarding the sale of its Movistar-branded Chilean division as part of the company’s wider strategy to withdraw from most markets in the region, El Economista writes, citing sources familiar with the matter. Liberty Latin America (LLA) – the parent company of Chilean ISP VTR – and rival full-service provider Claro Chile, were listed as the main candidates for acquiring the telco, although competitors Entel and WOM and would-be market entrant Borealnet were not ruled out. The sale is expected to face regulatory hurdles, however, as Movistar Chile is second-placed in several segments and its acquisition by any of the incumbent providers would lead to a concentration of market power and stark reduction in competition. If it was acquired by fourth-placed cellco WOM, for example, the combined entity would become the market leader with a market share of nearly 50% of the wireless segment, roughly 20 percentage points ahead of the current market leader. Its acquisition by VTR’s parent, meanwhile, would grant the enlarged company a market share of more than 60% of the broadband segment, with the next largest provider claiming roughly 13% of the space. The one exception was possible newcomer Borealnet – a consortium comprising US-based communications firm Rivada Networks and Business Finland – which entered the 5G licence tender process late last year but has yet to establish a presence in the country.