5G Spectrum Contest:

Chile’s ongoing 5G spectrum contest is the first commercial, not experimental, 5G deployment in Latin America. The state has decided to offer spectrum on four different bands:

  • In the 700MHz rage, one 20Mhz license will be assigned in the 703 – 713 MHz and 758 – 768 MHz bands for a period of 30 years, specifically for LTE Advance Pro, 5G or superior services.[1]
  • In the AWS band, one 30Mhz license will be assigned in the 1.755-1.770 and 2.155-2.170 MHz bands for a period of 30 years, specifically for LTE Advance Pro, 5G or superior services.[2]
  • In the 3.5GHz range, a total of 150 MHz in 10 MHz blocks (maximum 40 MHz per operator) will be assigned in 3,30 – 3,40 GHz and 3,60 – 3,65 GHz bands for a period of 30 years, specifically for 5G or superior services.[3]
  • In the 28GHz range, four licenses of 400 MHz each will be in the 25,90 – 27,50 GHz band for a period of 30 years, specifically for 5G or superior services.[4]

The assignment of spectrum in the four different bands will be through independent beauty contests, and in case of a tie of four points or less between two and four operators in any of the contests, a combinatorial first price sealed bid auction will determine the winners.[5] Given the wide criteria for a tie in first place, and the avid interest for spectrum, some contests are likely to be decided in the auction stage.[6]

Several different operators, including a new entrant -Borealnet S.A.- have participated in the different contests (see table below), whose results will be published by the regulatory agency on February 2021.

Participants in each 5G contest, November 2020

Source: Subtel[7]

Beauty contest conditions:

In all the contests, conditions were imposed to the winning operators, both in terms of quality (see table below) and coverage.

Speed (quality) requirements by band and technology[8]

Source: own elaboration based on contest conditions published by Subtel

In the 700 MHz, AWS and 3.5GHz bands, a “minimal communal coverage” was imposed, consisting of regional capitals (16), provincial capitals (56), a list of state-owned assets -such as public hospitals (199), ministries (24) and regional jurisdictions offices (16)- and specific georeferenced polygons defined by the regulator.[9]

However, the main method through which the contest plans to maximize the coverage of the service is through the point awarding system that takes into account the extension of the commitment (and the population covered) and the quick deployment of the service (one, two or three years’ time, discounted at a 6% annual rate).

The 700 MHz contest has two additional conditions. Firstly, it awards points if coverage includes highways and roads. Secondly, additional coverage conditions were imposed later in the process, to level the playing field compared with the more stringent 2014 700 MHz auction coverage conditions.[10]

The 26 GHz band does not have coverage obligations, but it includes additional technical obligations, specifically the number of towers to be installed in each location, depending on the demographic conditions, to be awarded points.[11] In addition, the contest specified that regions classified as D (less densely populated) had to receive service in 12 months, while the rest of regions in 18 months.[12]

Current competitive scenario:

Currently Chile has 4 MNO (Claro, ENTEL, Movistar and WOM) and 5 MVNO (Telsur, Virgin, VTR, Netline and Simple). A total of 24,3 million subscribers are divided between four MNOs that hold a combined 97,7% market share, and the rest is divided between the MVNOs. VTR, the largest fixed internet and pay TV provider, is the only MVNO that reaches a 1% market share (see table below). WOM, the fourth operator in the market, was a new entrant in 2014 and has become a dynamic competitor (a maverick), reaching a 20% market share in 2020 (see graph below).

Mobile subscriptions market share, Chile, June 2020

Source: own elaboration based on Subtel

Mobile subscriptions market share evolution, Chile, 2014-06/2020

Source: own elaboration based on Subtel

Nonetheless, the spectrum distribution is very unequal (see table below). Entel has much more spectrum than any other operator, including the other incumbents such as Movistar and Claro. WOM has entered the market recently, and only did so with some spectrum in the AWS band, thus lacking spectrum on the low and high range of the spectrum.

Current spectrum allocation, Chile, 2020[13]

Source: Subtel[14]

Spectrum conflicts:

The unequal distribution of spectrum between the MNOs has given place to new dynamic caps set by Subtel (telecom regulator) and the TDLC (antitrust agency) in 2019 and validated by the Supreme Court in 2020 (see table below).[15] Additionally, in 2018, the Supreme Court decided that multiple MNO had exceeded their caps and should return spectrum in different frequency groups, many of which still have not been restored.[16]

Dynamic spectrum caps imposed by Chile’s Supreme Court in 2020

Source: own elaboration based on Supreme Court 2020 ruling

However, the issue is not completely resolved. Movistar has filed two complaints in the TDLC arguing that Subtel should have limited the biggest players’ possibility to acquire spectrum (or at least favored entrants or smaller competitors).[17] The 2020 Supreme Court ruling established that the regulator had to analyze if incumbent operators could offer new services with their existing spectrum holdings, and if so, they should be restricted from entering future contests or auctions.[18] Subtel published its results before the contests opened, allowing all incumbents to participate in all 5G contests, and more specifically, the coveted 3.5GHz band contest. Movistar alleges that spectrum holdings by Entel and Claro in the 3-6GHz band with a specific use for public telephone service (20Mhz each), should be included in the their analysis of the competitive scenario and the dynamic caps, resulting in the exclusion of this companies from the 3.5GHz contest. The TDLC has denied Movistar claim twice.[19]


The 5G contest results are still a couple of months away, but Chile is further ahead than any other Latin American country. Chile’s objective is to allow for a quick rollout of 5G in the country, and the contest may assign “cheap” spectrum to incentivize a wide and quick rollout of this technology.

Nonetheless, the amount of available spectrum in the coveted 3.5 GHz band (five players have presented bids for it) is not enough, given industry recommendations of 80 MHz per player for an efficient 5G network in that frequency.[20] Movistar has a point: Entel and Claro have available spectrum that could be quicky reutilized for 5G mobile telecommunications. Some speculate that fiscal considerations may have led to a shortage in 3.5GHz spectrum to increase prices paid for spectrum.[21] More spectrum should be made available for the MNOs in this frequency.

Finally, making four contests simultaneously but independently has a risk, an operator may win spectrum in a certain band (for example, millimeter wave) without having access to other bands (3.5GHz). Operators require a mix of spectrum in three bands (700MHz, 3.5GHz and mmWave) to offer an efficient and complete 5G service and this type of adjudication process generates uncertainty between the interested parties.




[1] Details regarding the 700 Mhz band contest: https://www.subtel.gob.cl/concursobanda700/

[2] Details regarding the AWS band contest: https://www.subtel.gob.cl/concursobanda-aws/

[3] Details regarding the 3.5 Ghz band contest: https://www.subtel.gob.cl/concursobanda3500/

[4] Details regarding the 26 GHz band contest: https://www.subtel.gob.cl/concursobanda26/

[5] In all contests bases and conditions, Art. 27 defines the technical conditions for points awarded. A minimum of 90 out of 100 points is required to qualify in the contest, and the first place may be shared by up to four different players. Art. 32 defines the conditions for the auction.

[6] A highly competitive auction may go against the beuty contest principle, given that a combinatorial first price sealed bid process has been put in place, and even in the 3.5 GHz auction, sprectrum will be asigned “to the combination of offers that generate the highest fiscal income” (even when it may generate inefficient spectrum allocation). See 3.5 GHz contest conditions, Art. 32, subsection c, item 2.

[7] “MTT recibe cinco ofertas por concurso público de redes 5G, la tecnología que mejorará la calidad de vida de los chilenos y aumentará la productividad del país”, Subtel, 19/11/2020. Link: https://www.subtel.gob.cl/mtt-recibe-cinco-ofertas-por-concurso-publico-de-redes-5g-la-tecnologia-que-mejorara-la-calidad-de-vida-de-los-chilenos-y-aumentara-la-productividad-del-pais/

[8] In all contest terms and conditions, Art. 47 detailed the quality (speed) minimum requirements.

[9] Art. 27, section 2, subsection “a” in all three cases defined the “minimal communal coverage”, detailed in Annex 6 of each contest conditions.

[10] A series of modifications were included in the original 700 MHz band contest conditions, particulary the inclusion of Art. 44 bis, which specified additional coverage obligations detailed in Annex 12, and some conditions did not add points for the beauty contest. More information at: https://www.subtel.gob.cl/wp-content/uploads/2020/11/Modificacion_a_las_bases_concurso_700_MHz.pdf

[11] Depending on the demographic conditions of each location, classified in four groups (A -denser, more population-, B, C and D -less dense, less population-), the contest specified a minimum number of towers to be installed (15, 13, 10 and 5 respectively). Additional conditions were imposed to the “minimal communal coverage” areas, where the minimum number of towers installed was increased to 23, 20, 15 and 8 for A, B, C and D regions, respectively. Art. 27, section 2, subsection “b” of the 26 GHz contest.

[12] Art. 27, section 2, subsection “c” of the 26 GHz contest.

[13] Spectrum that will be given back by operators given Supreme Court rulling in 2018:

  • 10 MHz of Entel in the 900 MHz band
  • 10 Mhz of Movistar in the 1,9 MHz band
  • 20 Mhz of Entel in the 3.5 GHz band

Additionally, some spectrum is for regional use, not nationnaly:

  • 50 MHz of Movistar, VTR and CNT in the 3.5 GHz band

[14] “Informe sobre pertinencia de participación de los actuales concesionarios (incumbentes) en concursos públicos 5G”, Subtel, 11/08/2020. Link: https://www.subtel.gob.cl/wp-content/uploads/2020/08/Res_N1331_2020_Subtel_Informe_de_pertinencia.pdf

[15] The same ruling includes the additional complementarities, such as the obligation to offer national roaming to new entrants and have an open MVNO offer available to anyone interested. “Corte Suprema de Chile ratifica nuevos topes de espectro y sienta las bases para futura subasta 5G”, DPL News, 14/07/2020. Link: https://digitalpolicylaw.com/corte-suprema-de-chile-ratifica-nuevos-topes-de-espectro-y-sienta-las-bases-para-futura-subasta-5g/

[16] Ibid 12 specifies the spectrum that each operator has to return given the Supreame Court ruling of 2018.

[17] “TDLC da inicio al procedimiento de consulta solicitado por Telefónica Móviles Chile S.A. sobre las Bases de Licitación para los denominados “Concursos Públicos 5G”, en causa Rol NC N° 481-20”, TLDC, 09/11/2020. Link: https://www.tdlc.cl/nuevo_tdlc/tdlc-da-inicio-al-procedimiento-de-consulta-solicitado-por-telefonica-moviles-chile-s-a-sobre-las-bases-de-licitacion-para-los-denominados-concursos-publicos-5g-en-causa-rol-nc-n/

[18] Specifically, the Supreme Court decides that Subtel has to prepare a report regarding spectrum holdings by established players. “Antes de un concurso para la adjudicación de concesiones de uso de frecuencias radioeléctricas para la prestación de un nuevo servicio o tecnología, la autoridad deberá analizar si los operadores incumbentes pueden razonablemente ofrecerlo en sus frecuencias preexistentes de un modo inmediato o previa optimización de tales redes en las frecuencias disponibles en un plazo y costos también razonables. En caso de ser así, deberá privilegiarse la adjudicación a entrantes u operadores de menor tamaño”.

[19] For Subtel decision, Ibid 14. For TLDC decision, Ibid 17.

[20] For example, see:

Subtel agrees with these recommendations. See Ibid 14, section regarding 3.5 GHz capabilities of established players.

[21] “Primera subasta 5G en Latinoamérica: Buena motivación, aunque perduran viejas prácticas”, CEABAD, Juan Ignacio Crosta Blanco, 29/10/2020. Link: https://ceabad.com/noticias/primera-subasta-5g-en-latinoamerica-buena-motivacion-aunque-perduran-viejas-practicas/