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The evolution of competitiveness in the Chilean mobile market

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  • Gutiérrez-Hita, Carlos
  • Rodríguez, Santiago Budría
  • Nasirov, Shahriyar

Abstract

This study offers a comprehensive analysis of market power issues in Chile's mobile telecommunications sector and explores how these concerns have evolved since the liberalization came into force. Apart from using typical ex-post structural measures, this study's methodology includes theoretical modeling and empirical assessment to ascertain the behavior of leading operators in the market. In the theoretical modeling, we assume that operators engage in Cournot (quantity-setting) competition, characterizing equilibria under competitive and cooperative scenarios where operators may participate in either full or partial collusion. In the empirical assessment, we simulate the model using monthly data from January 2005 to June 2024 and evaluate each operator's strategic incentives to exercise market power. The results indicate that although incentives to collude may persist, the two largest operators in the market (Movistar and Entel) may have behaved more competitively in recent periods. This shift was further evidenced by the entry of the fourth operator (Wom) and its aggressive strategy. Despite this result, we argue that further research is needed to evaluate the evolution of the competitive environment. In addition, we suggest that the regulatory authorities should strengthen the legal framework to enhance the competitiveness of small operators and new entries, thereby reducing concentration.

Suggested Citation

  • Gutiérrez-Hita, Carlos & Rodríguez, Santiago Budría & Nasirov, Shahriyar, 2025. "The evolution of competitiveness in the Chilean mobile market," Utilities Policy, Elsevier, vol. 96(C).
    • Handle: RePEc:eee:juipol:v:96:y:2025:i:c:s0957178725000979
    DOI: 10.1016/j.jup.2025.101982
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    References listed on IDEAS

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    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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