Chile eyes $700 mln '08 telco investment

By Ignacio Badal

SANTIAGO (Reuters) - Chile will likely see investment of between $600 million and $700 million in its telecommunications sector in 2008, mostly in wireless Internet and mobile phone networks, the government said on Wednesday.

Chile Telecommunications Undersecretary Pablo Bello told the Reuters Latin America Investment Summit in Chile that strong growth in the sector would be reflected in a 10 percent increase in the number of mobile phone users to nearly 100 percent penetration.

"This is a key year, with more investments, more competition and more connectivity," Bello said.

There were 14 million mobile phone lines in Chile by the end of 2007, compared with a population of around 16 million.

Bello said, however, there was still room in Chile for a fourth mobile carrier, which would help stoke competition between leading operator Movistar, a unit of Spain's Telefonica (TEF.MC: Quote, Profile, Research, Stock Buzz); Entel's ENT.SN Entel PCS; and Claro, a unit of Mexico's America Movil (AMXL.MX: Quote, Profile, Research, Stock Buzz).

He said the government would also decide before the end of May which digital television system to adopt, a move hotly awaited by the sector and consumers.

Bello forecast Latin America's telecommunications industry would likely grow around 10 percent a year on average over the next decade due to excess capacity and ample unsatisfied demand.

"In Latin America we have a great deal of space for telecommunications to keep growing at a substantial rate," Bello said.  Continued...