Movistar to Focus on Service Quality in 2006

Mobile operator Movistar Chile, a unit of Spain's Telefónica, will continue with investment plans this year aimed at improving the company's much criticised quality of service, the company's CEO Oliver Flögel told press.

In the past three years the company has invested US$600mn with plans to continue investing US$200mn per year to increase the number of base stations installed. So far this year, Movistar Chile has increased by 50% the number of base stations nationwide.

Movistar is focused on satisfying its over 5.5 million users in Chile, Flögel said, adding that despite reports about a lower quality of service, the same authorities, particularly Chile's telecoms regulator Subtel's head Pablo Bello, have also said the Chilean mobile market has the best standards in quality in the region.

Movistar has received criticism pointing to the fact that the quality of service has suffered since it merged its two local units, Telefónica Móvil and BellSouth and migrated all users to one network. In early August, a group of Chilean deputies, led by Jaime Mulet, filed a US$260mn lawsuit against Movistar in relation to the quality of service allegations.

Flögel said Movistar presented its arguments related to the lawsuit within the deadline (Aug 31) and now a Chilean civil court will be in charge of determining the feasibility of the claim.

Commenting on the entrance of Claro, the local unit of Mexico's América Móvil and former Smartcom, Flögel said the Chilean mobile market is the most mature in the region and there will always be competitors trying to become market leaders.

Because of the market's maturity, Flögel expects the growth in the next years to slow down, particularly considering the nearly 80% penetration.

BNAmericas.com"

Posted to the site on 7th September 2006