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March 1, 2021

Chile completes first 5G auction, raising a record US$453 million

By GlobalData Technology

The Chilean regulator SUBTEL announced the winners of the country’s first 5G auction on 16 February. As part of this process, which kickstarted in the second half of 2020, the regulator released 1.8GHz in total, distributed across the 700MHz and AWS, 3.5GHz and 2.6GHz bands, obtaining US$453 million in total, the highest recorded in an spectrum auction in the country.

Movistar, Entel and WOM were awarded 50MHz each in the cobbled 3.5GHz band for which they paid a US$163 million, US$139 million, and US$ 45 million respectively, which combined accounted for nearly 77% of the total proceeds generated during the auction. In addition, WOM was also awarded a 20MHz block in the 700MHz band and 30MHz in the AWS band, while Movistar and Entel were able to secure spectrum in the 26GHz band.

Latin America lags substantially behind in terms of 5G deployments. The Covid-19 pandemic and the deterioration of the macroeconomic environment across the region have further delayed the arrival of mobile 5G commercial releases in the region. Despite several LATAM operators have already engaged in 5G network trials, only a few small markets have so far launched 5G services commercially, including a small-scale deployments in Uruguay Trinidad and Tobago, Puerto Rico and Suriname. GlobalData expects an increasing number of operators in the region to launch full-fledged commercial offers during 2021, including Brazil, Chile and Mexico.

Slow growth for 5G initially

Although we expect a slow update in 2021, the uptake of mobile 5G services will accelerate in the coming years supported by increased spectrum availability and operator investment in network rollouts. The availability of affordable handsets will be key to driving adoption, particularly in light of strong economic headwinds caused by Covid-19 affecting consumer income.

Moving forward, the development of the IoT industry, particularly in verticals such as healthcare, smart cities and industry automation, will help support growth. By2025, mobile 5G subscriptions in Latin America will account for 11.6% of total mobile subscriptions in the region.