Signals: Avantel Ruling to Stiffen Competition in Corporate Market

New legislation that orders Colombian mobile operators to interconnect their networks with trunking operator Avantel, will lead to greater competition within the corporate client market, according to a study by Signals Telecoms Consulting.

Colombia's telecoms regulator CRT issued the new regulations last week thus strengthening Avantel's service offering in its target corporate segment and obliging rival competitors to start offering new services to compete.

Avantel changed its concession license in August 2005 to become the country's fourth mobile operator.

However, mobile competitors Comcel, the local unit of Mexico's América Móvil, and Movistar Colombia, owned by Spain's Telefónica Móviles, refused to provide Avantel with mobile interconnection rates.

Signals does not expect the interconnection to directly affect the mobile mass market.

"Avantel's interconnection leaves the company in similar conditions as other operators with iDEN technology such as the subsidiaries of NII Holdings that in Latin America operate under the brand Nextel in Argentina, Brazil, Mexico and Peru," Signals analyst and the report's author Juan Gnius said.

"However, Avantel and NII Holdings still need to work on the technological migration of their networks," Gnius said.

Competition in the Colombian mobile market is also expected to change as Ola, which is jointly owned by Colombian municipal telcos ETB and EPM is currently testing UMTS technology through which the company plans to offer third generation services to the corporate segment and to early-adopters.

"Any deployment of 3G must include a larger offering of corporate services. [A strategy such as this] would be hard to replicate by Movistar and Comcel, which would allow Ola to increase its corporate client base," Gnius added.

BNAmericas.com"

Posted to the site on 19th July 2006