5G regulation and law in Chile

Information current as of 12 December 2019

What is the state of 5G deployment in Chile?

5G technology is still not available in Chile. However, the Chilean Government, through its telecom regulatory agency (the “Subsecretaría de Telecomunicaciones” or “Subtel”), has drafted a project of new spectrum policies with the aim implementation of 5G services in the near future. Furthermore, the Government expects the implementation of 5G services to take place before 2022.

Which telcos and communications players are launching 5G services?

There are currently 5 active operators with spectrum for mobile services: Entel, Movistar, Claro, VTR and WOM. At present, none of them has launched 5G services. Movistar has declared its plan for the implementation of 5G services for 2020. On July 2019, Entel and Ericsson successfully performed the first test of industrial 5G in the country, at a speed of more than 100 times faster than 4G. 

Are there any public tenders for spectrum licences?

No. However, on 11 May 2019, Subtel launched a public consultancy process regarding the future public tender for spectrum licences (the “Public Consultancy Process”), 1 An English version of the document is available in:
https://www.subtel.gob.cl/wp-content/uploads/2019/05/Public_Consultation_for_the_5G_Contest_in_Chile.pdf
 which outlines the main general conditions for future public tenders. Furthermore, on 9 October 2019, Subtel launched a public consultancy process regarding the future public tender for limited spectrum permits. These permits will be for the deployment of 5G technologies to be used in technological applications by companies in sectors such as mining, ports, transportation and other large industries. 

Has there been any comment on when there might be?

Prior to the public tender taking place, Subtel waited for the enforceable judgment of the consultancy process that was initiated before the Antitrust Court (explained below). Now that the Antitrust Court has ruled on the matter, Subtel plans to launch the public tender for spectrum licences during the first quarter of 2020. 

What has the government said regarding spectrum licences for commercial use?

Through the Public Consultancy Process, Subtel has outlined the following main general conditions for the future public tender for spectrum licences for commercial use:

  • Following global trends, the licences shall be granted for the 700 MHz, AWS, 3.5 GHz and 28 GHz bands, with an available bandwidth of 20 MHz, 30 MHz, 40 MHz and 850 MHz, respectively, with a minimum speed requirement and an expected coverage for each band.
  • Taking into account that the development of 5G needs a portfolio of radio spectrum bands, the public tender shall follow a combinatorial-of-bands type of model, with each band subdivided into one or more blocks.
  • The technology required for the implementation of the technical project will be that which complies with 3GPP’s Release 15 or higher.

It should be noted that these characteristics and conditions may vary depending on availability of new equipment or following the World Radiocommunication Conference held in November 2019.

In relation to the 3.5 GHz band, from 2001 to 2005 it was licensed to incumbents for wireless access services. However, in June 2018, Subtel ordered a “freeze” on the granting of licences for the purpose of reserving the 3.5 GHz band for its study as spectrum with potential to develop 5G, and also to avoid the telcos deploying 5G without proper governmental regulation. The decision to “freeze” the licences granted was then partially reverted to the extent that telcos can use their allotted spectrum in the band but only for data transmission equipment for fixed wireless services. 

In February 2019, Subtel announced that it will grant limited spectrum permits in the 3.5 GHz band to any industry that plans to experiment with 5G in the development of big data, IoT, telemedicine, self-driving cars, etc., until the public tender for the spectrum licences takes place

Are the rules for 5G already drafted, and if so, what do they say?

Except for what is mentioned in the Public Consultancy Process, there are still no rules in Chile for 5G.

What are or would be the rules for granting competitors access to the new 5G networks, once they are deployed?

Under the legal framework in force until 4 December 2019, mobile operators could not have more than 60 MHz of spectrum for their operations due to antitrust reasons. In fact, in April 2017, the Supreme Court ruled that the operators awarded with spectrum blocks in the 700 MHz band tender must relinquish the excess of spectrum over the 60 MHz threshold. 

Facing the future of 5G deployment, these antitrust limitations motivated Subtel to initiate a consultancy process before the Antitrust Court in order to determine whether an increase in the limit of spectrum that a mobile operator holds would have a competition impact in the market. On 4 December 2019, the Antitrust Court issued its opinion on the consultancy process and set forth the following new applicable limits on spectrum concentration for mobile services:

  1. Low macro-band (lower than 1 GHz): limit of 35% of spectrum per operator.
  2. Medium-Low macro-band (between 1 and 3 GHz): limit of 30% of spectrum per operator.
  3. Medium macro-band (between 3 and 6 GHz), the following plans will apply:
    1. In the short term, Subtel will not auction contiguous blocks that, in the aggregate, would be lower than 40 MHz per operator. Therefore, a first auction should result in the allocation of at least 80 MHz with a minimum of two operators;
    2. In the medium term, Subtel could use its powers to re-allocate spectrum, with the aim of having at least four operators with a minimum of contiguous 40 MHz each; and
    3. In the long term, a 30% maximum spectrum limit will apply, where each operator must have a minimum of contiguous 80 MHz each.
  4. Medium-High macro-band (between 6 and 24 GHz): no limits, due to the unsuitability for mobile services in such bands.
  5. High macro-band (higher than 24 GHz), the following plans will apply:
    1.  In the short term, Subtel will ensure the award of contiguous blocks that, in the aggregate, will not be lower than 400 MHz per operator. This will enable the existence of, at least, two operators in this macro-band;
    2. In the medium term, Subtel could use its powers to re-allocate spectrum, with the aim of having at least four operators with a minimum of contiguous 400 MHz each; and
    3. In the long term, a 25% of maximum spectrum limit will apply. In any case, Subtel will ensure that there are at least four operators with a minimum of contiguous 800 MHz each.
Diego Rodríguez
Diego Rodríguez, LL.M.
Partner
Santiago