Chile’s second-largest mobile telephone operator, Empresa Nacional de Telecomunicaciones SA (Entel), has said it will merge with local data, fixed-line, cable TV and Internet provider Grupo GTD. The move may help Entel compete against its main rivals Movistar, the local unit of Spain’s Telefonica Moviles SA, and Claro, owned by Mexico’s América Móvil SAB.
The merger would be an all share-agreement. Entel and GTD signed a nonbinding letter of intent to merge their operations, the companies said in separate filings with Chile’s securities regulator.
The agreement was signed between Entel’s controller, Almendral Telecomunicaciones SA, and GTD’s controller, Inmobiliaria e Inversiones El Coigüe. If shareholders approve the deal, GTD Manquehue shareholders will hold a 9.8% stake in Entel, while Almendral Telecomunicaciones will keep 49.4% of Entel. The deal may take several months to complete.
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Feature Report: Chilean wireless market set for continued growth
Local telecommunications operators compete for clients with so-called triple-packs, which offer broadband internet service, telephone landlines and cable television in an all-inclusive package.
According to a recent Pyramid Research study, the telecommunications services market in Chile grew 16.4% in 2010 thanks to the expansion of mobile (voice and data) and pay-TV services. The firm expects the telecom market to expand at a 4.3% compound annual growth rate, fueled by an increase in revenue from fixed and mobile data services.
Mobile penetration is expected to surpass 140% this year and will reach almost 170% in 2016, while in the fixed market, bundled offerings represent at least 65% of total operator revenue-generating units, largely as a result of intense competition and clear regulation in the market.
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