Deputies Propose Regulation on Mobile Tariffs

A group of Chilean deputies has sent to congress a draft bill in which they propose to give telecoms regulator Subtel the authority to regulate mobile tariffs, local newspaper La Tercera reported.

The deputies, led by Jaime Mulet, aim to eliminate the phrase "excluding mobile telephony" within an article in telecommunications law that gives the regulator the authorization to set prices for fixed line telephony.

"The government should not support this draft bill. It will only kill competition [in the Chilean mobile market] since all operators will charge according to the maximum fees approved, just as Telefónica Chile," local analyst Roberto Gurovich told BNamericas.

However, according to the analyst there would probably only be minimum impact on investments. When the government set tariffs for Telefónica Chile, a unit of Spain's Telefónica, too low in 1999, the company temporarily stopped its investments... This is a process the mobile market could also face if tariffs are regulated.

"The draft bill proposes reducing tariffs, but it does not say where [within the mobile market]. Such an idea would only eliminate competition and the different service offerings operators permanently launch," he added.

Mulet's crusade in the mobile market started with a lawsuit against mobile operator Movistar Chile, a unit of Telefónica, requesting damages of up to US$260mn for the company's 5.5 million users.

The lawmaker filed the lawsuit because of a failure in the quality of service, arguing Movistar was in a position to determine in advance all failures in its service and, consequently, is responsible and should pay compensation to affected users.

BNAmericas.com"

Posted to the site on 12th September 2006