The History of Telecommunications in Chile

20 November, 2024

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The history of telecommunications in Chile is a fascinating narrative of technological progress and transformation, reflecting the broad changes in communication methods in one of the most dynamically developing countries in Latin America. From modest beginnings to modern solutions, the history of telecommunications in Chile illustrates how the country has evolved in communication, from telegraphy to advanced mobile and digital technologies.

The Beginnings of Telecommunications in Chile
The development of telecommunications in Chile, as in many other Latin American countries, began in the mid-19th century. The introduction of modern communication technologies during this time was crucial for accelerating information exchange, contributing to the economic and social growth of the country.

In 1852, Chile installed its first telegraph line, connecting the country’s capital, Santiago, with the port city of Valparaíso. This milestone marked the beginning of a new era in communication methods. The telegraph, as a modern communication technology, enabled faster information transfer over long distances, significantly impacting various aspects of social and economic life.

The telegraph line between Santiago and Valparaíso not only strengthened ties between these key centers but also introduced a new level of efficiency in communication. This improvement was essential for managing and coordinating activities at both local and national levels. The telegraph facilitated quicker transmission of commercial, administrative, and military information, fostering economic growth and national integration.

Initially, Chile’s telegraph system was relatively simple and mainly concentrated in urban areas like Santiago and Valparaíso. Over time, the telegraph network expanded to cover more regions, addressing the growing communication needs associated with economic and administrative development. Despite challenges in maintaining and managing telegraph infrastructure, the system became an indispensable communication tool, significantly contributing to the country’s progress.

In 1879, Chile introduced its first telephone network, initially limited to Santiago. This development was a significant step forward in the country’s telecommunications evolution. The telephone, as a new technology, allowed direct and rapid voice communication over distances, revolutionizing how people in Chile interacted.

Initially accessible only to higher social strata and businesses, the telephone network in Santiago gradually expanded to other regions. This growth improved communication in both urban and rural areas, positively influencing Chile’s economic and social development.

Technological Advancements in the 20th Century
In the 20th century, Chile experienced dynamic growth in telecommunications, significantly impacting society and the national economy. This period saw the introduction of new technologies and infrastructure development that modernized communication.

In 1925, Chile inaugurated its first public telephone network with automatic switching, a milestone in the nation’s telecommunications history. Before this, telephone connections were manually operated by switchboard operators, a process prone to errors and delays. Automatic exchanges revolutionized communication, enabling direct caller connections without operator intervention, increasing efficiency and handling higher call volumes to meet growing demand.

By the 1950s, television emerged in Chile, influencing society and culture. Initially limited to a few stations and programs, television rapidly expanded, offering a variety of content ranging from news to entertainment. This medium became a critical communication tool, shaping public opinion and mass culture.

In 1964, the national telecommunications company Empresa de Telecomunicaciones de Chile (ENTEL) was established. ENTEL played a pivotal role in further advancing telecommunications, introducing technological innovations, and expanding the telecommunications infrastructure. By the 1990s, ENTEL began implementing mobile telephony, revolutionizing communication in Chile. Mobile phones enabled greater accessibility to telecommunication services, transforming how people interacted.

The Digital Era and Mobile Revolution
The 1990s and early 21st century marked a period of rapid digital and mobile technological advancements in Chile, revolutionizing communication and technology use nationwide. The introduction of technologies such as mobile telephony, 2G, 3G, and 4G LTE had profound effects on daily life, the economy, and society in Chile.

In 1992, Chile became one of the pioneers in Latin America by launching mobile phone services. This marked the beginning of a new era in national telecommunications. Mobile telephony gained popularity due to its convenience and flexibility, transforming personal and business communication.

In 1998, Chile implemented a 2G network, introducing new features such as text messaging (SMS), which became a popular communication method. The 2G network also enabled basic mobile data services, laying the groundwork for internet-based mobile applications.

In 2000, Chile adopted 3G technology, providing faster mobile internet access. This technology facilitated access to websites, multimedia applications, and video calls, enhancing the user experience and expanding the reach of digital services.

By 2008, the introduction of 4G LTE further revolutionized mobile communications with significantly faster internet speeds and improved data quality. This technology supported advanced services like high-definition video streaming, online gaming, and applications requiring high bandwidth.

Infrastructure Development and Internet Access
In recent years, Chile has made significant efforts to develop telecommunications infrastructure and expand internet access nationwide. Government initiatives, such as the “Chile Conectado” program, focus on building and upgrading telecommunications infrastructure in underserved and remote regions. This program aims to expand broadband networks, providing faster and more reliable internet access, and increasing digital inclusion.

In 2021, Chile announced its plans to implement 5G technology, marking another milestone in the evolution of telecommunications. 5G promises significantly faster internet speeds and opens up possibilities for developing the Internet of Things (IoT), smart cities, and advanced telecommunication services.

Challenges and the Future
Despite significant progress, Chile faces challenges in ensuring equal access to modern telecommunication services in less urbanized and remote areas. Addressing these gaps will require continued investment in infrastructure and innovative solutions.

Future developments in 5G technology and the integration of advanced technologies like artificial intelligence and big data offer exciting opportunities. These innovations can drive efficiency, foster new industries, and improve the quality of life for Chilean citizens.

The history of telecommunications in Chile is a story of significant technological advancements, beginning with 19th-century telegraphy and advancing through many stages to modern mobile and digital technologies. This transformation has profoundly impacted Chilean society and the economy, enhancing communication and information access. Looking ahead, Chile is well-positioned to embrace further technological innovations that will shape the future of communication in the country.

Telecom operators in Chile:

Claro Chile

Claro: A Telecommunications Leader in Latin America

Claro, a key player in Latin America’s telecommunications sector, operates under América Móvil, a prominent Mexican telecom group. Serving millions across the region, Claro’s operations span Argentina, Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Puerto Rico, and Uruguay. Its name, “Claro,” translates to “bright,” “clear,” and “of course” in Portuguese and Spanish, symbolizing clarity and reliability.

Claro Chile: Competing in a Tough Market. Entering the Chilean market in 2006 after acquiring Smartcom PCS, Claro Chile operates as the third-largest mobile provider, behind Movistar and Entel. Its advertising slogans, such as “Yo soy Claro, y me gusta” (“I am Claro, and I like it”), have resonated with Chilean audiences.

Beyond Telecommunications: Claro’s Broader Impact

Social Responsibility – In 2012, Claro partnered with the (RED) campaign to combat HIV transmission from mother to child, showcasing its commitment to social impact. Sponsorships – Claro has actively sponsored the Sauber F1 Team (2011-2014, 2018-2019), enhancing its visibility in global sports.

Claro’s growth across Latin America underscores its adaptability and commitment to technological innovation. From expanding mobile and internet services to spearheading 4G and 5G advancements, Claro continues to lead in connecting millions across diverse markets. With its focus on customer satisfaction and cutting-edge technology, Claro is poised to remain a telecommunications giant in the region.

Entel Chile

Entel-Chile: A Telecommunications Giant in Chile

Empresa Nacional de Telecomunicaciones S.A. (Entel-Chile S.A.) is Chile’s largest telecommunications company, widely recognized for the iconic Torre Entel. This 127-meter (417-foot) tower, located in central Santiago, is a landmark that symbolizes technological progress and innovation in Chile.

Founded in 1964 by the Chilean government, Entel’s mission was to modernize the country’s telecommunications infrastructure, which had been severely damaged by an earthquake. The company introduced microwave networks across the nation and built Latin America’s first satellite station in Longovilo in 1968. Initially focused on long-distance and data communications, Entel expanded its services to include mobile, landline, and internet connectivity. Torre Entel in Santiago became the central hub of the company’s telecommunications network.

Entel PCS, the company’s mobile arm, held a commanding 38.8% market share in Chile as of December 2013. Entel has consistently led the industry in innovation, becoming the first operator in the Americas to launch a GSM mobile network in 1997. The company later enhanced its offerings with GPRS support in 2000 and EDGE technology in 2003, solidifying its reputation as a technological pioneer.

The privatization of Entel began in 1986 and was finalized in 1992. This transition brought in significant investments from major stakeholders such as Telecom Italia and Group Chilquinta, enabling the company to expand its operations and improve its infrastructure. In 2005, control of Entel shifted to the Chilean group Almendral S.A. through its subsidiary Altel Inversiones. Entel continued to grow, acquiring Nextel del Perú in 2013 for $400 million and rebranding it as Entel Perú. In 2022, the company sold its fiber optic assets to ON*NET Fibra for $358 million, ensuring the continuation of its internet services through a leasing agreement.

Entel operates through several subsidiaries, offering a diverse range of services that include customer support solutions, data hosting, broadband internet, mobile and landline telephony, and high-definition television. These services, combined with the company’s history of innovation, have positioned Entel as a cornerstone of Chile’s telecommunications infrastructure.

Entel’s legacy is one of continuous growth and adaptation, driven by its commitment to technological advancement and customer satisfaction. As a leader in Chile’s telecom market, the company remains a pivotal force in connecting the country and advancing its communication capabilities.

Falabella Chile

Falabella: A Leading Omnichannel Ecosystem in Latin America

Falabella is at the forefront of physical and digital commerce in Latin America, offering a robust omnichannel ecosystem that delivers seamless, intuitive solutions to its customers. Operating across seven countries—Chile, Peru, Colombia, Brazil, Mexico, Uruguay, and Argentina—Falabella has established itself as a trusted name in retail, banking, and e-commerce. Its unique value proposition lies in its ability to continually adapt and provide a unified, direct customer journey across multiple touchpoints.

At the core of Falabella’s ecosystem are scalable platforms that integrate e-commerce, payments, banking, omni-channel retail, loyalty programs, and home delivery services. The company’s vast operations include department stores, home improvement outlets, supermarkets, e-commerce platforms, and regional shopping centers marketed under well-known brands like Mallplaza, Falabella, Sodimac, Tottus, falabella.com, and Banco Falabella.

Supporting its operations globally, Falabella has procurement offices in China and India and digital centers in India, Chile, Mexico, and Argentina. These resources enable the company to optimize its supply chain, expand its digital capabilities, and meet the diverse needs of its customers.

A Purpose-Driven Organization. Falabella’s purpose is to make life simpler and more enjoyable for its customers. This vision shapes its cultural and digital transformation initiatives and underscores its commitment to providing outstanding service. The company is dedicated to achieving a significant cultural shift in the coming years by strengthening its core capabilities while developing new ones.

Understanding the need for agility and flexibility, Falabella continues to adapt its organizational structure to meet evolving market demands. Guided by its corporate values and principles, the company maintains its focus on customers and employees, ensuring that they remain central to its ecosystem strategy.

By the Numbers (As of June 2024)

579 stores and malls across the region
US$ 6.4 billion gross loan book
Nearly 1,000 click-and-collect points
US$ 2.5 billion GMV (Gross Merchandise Value) in the last 12 months

Falabella’s ecosystem approach sets it apart in a competitive market, blending the strengths of its physical and digital platforms to create a unified shopping and service experience. By embracing cultural transformation and maintaining a relentless focus on innovation and customer satisfaction, Falabella is well-positioned to remain a leader in Latin America’s retail and digital economy.

Movistar Chile

Movistar: A Telecommunications Leader in Chile

Movistar, legally known as Telefónica Chile S.A. and Telefónica Móviles Chile S.A., is a major telecommunications company in Chile. Its roots trace back to the early 20th century with the creation of the Compañía de Teléfonos de Chile (CTC) in Valparaíso. Initially associated with multinational and foreign capital, the company experienced a period of nationalization between 1971 and 1987 before being privatized again.

Originally controlled by the U.S.-based International Telephone & Telegraph (ITT) since the 1930s, CTC underwent significant transformations over the decades. In the 1990s, the company transitioned to its current ownership under Telefónica S.A. of Spain, after passing through the hands of Australia’s Bond Corporation during its re-privatization phase. Telefónica became the majority stakeholder in 1990, introducing a modernized approach to Chile’s telecommunications market.

Movistar’s evolution included milestones like the digitalization of its fixed telephone network in 1993 and the launch of mobile services through strategic partnerships, such as Startel with VTR in 1996. By 2000, the company’s mobile division had rebranded as Telefónica Móvil. This paved the way for further innovation, culminating in the acquisition of Bellsouth Chile in 2005, which merged with Telefónica Móviles Chile to form the Movistar brand.

The company adopted the unified Movistar brand across all its services in 2009, encompassing mobile, fixed-line, broadband, and TV operations. Movistar’s offerings include satellite TV, IPTV, fixed and wireless telephony, and internet services. Today, Movistar serves approximately 10 million customers in Chile, competing with other major providers like Entel, Claro, and VTR.

Movistar has consistently led technological advancements in Chile. It introduced 3G services in 2007, followed by HSPA+ in 2010 and 4G LTE in 2012. These advancements positioned Chile as one of the fastest mobile internet markets globally, with Movistar recognized for its extensive LTE coverage and high-quality service.

The company also operates Movistar TV, which launched in 2006 and now includes satellite and IPTV services. Features such as DVR, Video on Demand (VOD), and pay-per-view enhance its television offerings, catering to diverse customer preferences. Movistar has expanded into business solutions through Movistar Empresas and provides wholesale services via Telefónica Global Solutions.

Movistar continues to innovate, offering a wide range of products and services designed to meet the needs of Chilean consumers and businesses. With a legacy of resilience and modernization, Movistar remains a cornerstone of Chile’s telecommunications industry, driving connectivity and technological progress across the nation.

Nextel Chile

Nextel Chile was a mobile telecommunications company and subsidiary of the U.S.-based NII Holdings Inc. Established in 1999 through the acquisition of three companies, Nextel Chile initially faced resistance from incumbent operators, delaying its entry into the market. The company launched its services in 2006, focusing on enterprise clients with offerings like voice communication, text messaging, and WAP-based navigation.

The unique feature of Nextel Chile was its “Push to Talk” (PTT) service, which allowed users to initiate instant calls with the push of a button, mimicking a walkie-talkie. This service, launched in 2006, gained a competitive edge in 2012 when the company introduced “High Performance Push to Talk” (PRIP), broadening its appeal to a general audience. With the deregulation of mobile networks in 2011 and 2012, Nextel Chile expanded its target market to include all consumers, entering direct competition with major players like Movistar, Entel, Claro, VTR, and Virgin Mobile.

Nextel Chile was recognized as one of the best companies to work for in Chile in 2010, 2011, and 2012, according to the Great Place to Work rankings. By September 2014, it had over 354,000 active lines, accounting for 1.54% of the Chilean mobile market.

In 2014, Nextel Chile was sold to Fucata S.A., a consortium led by Argentina’s Grupo Veintitrés and investment funds ISM Capital and Optimun Advisors. A year later, in 2015, the company was acquired by British investment fund Novator Partners. In July 2015, Nextel Chile ceased operations, rebranding as WOM, marking the end of its presence under the Nextel name in the Chilean market.

Telsur Chile

Telsur, legally known as Telefónica del Sur S.A., is a business unit of Grupo Gtd that provides telecommunications and IT services across the regions of Maule to Aysén in southern Chile. Founded on April 29, 1893, in Valdivia, its operations focus on residential customers, businesses, and large corporations. The company’s headquarters, commercial offices, and corporate management are located in Valdivia.

Established by a group of German entrepreneurs—Gustavo and Carlos Pröchelle, Arnulfo Anwandter, Reinaldo Harnecker, and Ricardo Köerner—Telsur has consistently been at the forefront of technological advancements. It pioneered services such as national direct dialing, caller ID, digital television, ADSL broadband outside Santiago, and wireless local telephony in Chile.

With a presence spanning the Maule, Ñuble, Bíobío, Araucanía, Los Ríos, Los Lagos, and Aysén regions, Telsur operates through its subsidiaries Telefónica de Coyhaique (Telcoy) and Plug And Play Net S.A. (P&P) in select areas. In 2007, it installed an 830-kilometer fiber optic network extending to Aysén, featuring submarine sections and partially funded by the Telecommunications Development Fund. A second project further improved connectivity in southern Chile, culminating in the opening of Chile’s longest submarine fiber optic segment, spanning over 350 kilometers between Quellón on Chiloé Island and Puerto Chacabuco in Aysén.

Since becoming part of Grupo Gtd in December 2009, Telsur has expanded its offerings for southern Chile’s businesses and corporations, deploying state-of-the-art fiber optic networks. Today, it provides fiber optic connectivity to over 80,000 homes and more than 10,000 businesses, including nearly 9,000 households in Aysén, one of the country’s most challenging geographical regions.

On May 18, 2022, Telsur inaugurated the Museum of Telecommunications in Valdivia, in collaboration with the Corporación del Patrimonio de Chile, making it the first museum of its kind in the country.

Telsur’s services include fixed-line home telephony, internet for individuals and businesses via ADSL and fiber optic (FTTH), and cellular services under the Gtd Móvil brand, Chile’s first mass-market mobile virtual network operator using Movistar’s infrastructure. Telsur also introduced IPTV and wireless digital television (WiTV), becoming the first in Chile and South America to offer digital television via the internet. Its Telsur TV Digital service covers a wide area in southern Chile, from Chillán to Chiloé and Coyhaique, and now includes high-definition digital TV, launched during the 2010 FIFA World Cup.

Virgin Mobile Chile

Virgin Mobile Chile is a mobile network operator that utilizes the Movistar mobile network to deliver its services. It was launched in April 2012 by Virgin Mobile Latin America (VMLA), marking its entry into the Chilean market as the region’s first commercial operation. The launch followed regulatory approval from Chile’s telecommunications authority, Subtel, and the signing of an agreement with Movistar, one of Chile’s leading mobile network operators.

The entry into the Chilean market was part of VMLA’s broader strategy to establish itself as Latin America’s leading mobile virtual network operator (MVNO). Chairman Phil Wallace expressed gratitude for Subtel’s efficient approval process, while Virgin Group founder Richard Branson highlighted the excitement surrounding the venture, emphasizing the high-quality services that Virgin Mobile Chile would offer to its customers. The launch represented a significant step in Virgin Mobile Latin America’s expansion, setting the foundation for future operations across the region.

VTR Movil Chile

VTR (Vía Trans Radio Comunicaciones SpA) is a leading Chilean telecommunications company and the country’s largest provider of subscription television, with over 1,065,675 subscribers as of September 2017, representing a 32.8% market share. VTR also holds a 38% share in the fixed broadband internet market, making it the largest provider in this segment. Additionally, it is the second-largest provider of fixed telephone services, with a 20% market share, and has a growing presence in the mobile phone sector with a 0.90% share as of 2017.

Founded in 1928 as Vía Trans Radio Chilena Compañía de Radiotelegrafía, the company initially focused on domestic and international radiotelegraphy, leveraging investments from Radio Corporation of America, Marconi Wireless Telegraph Company, Compagnie générale de la télégraphie sans fil, and Telefunken. Over the decades, VTR expanded its services to include telex, automatic direct dialing, fax, and data transmission. In 1986, Thomson-CSF sold its stake in VTR to Antofagasta plc, part of the Grupo Luksic conglomerate. VTR entered the pay-television and mobile telephony markets in 1993 with the launch of Telecable Sur SA, the acquisition of Maxivisión, and the establishment of the Startel mobile network in partnership with Compañía de Teléfonos de Chile (CTC).

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