Chile reduces mobile termination rates by 80%

SANTIAGO – President Sebastián Piñera yesterday announced an average reduction of 80% in the tariffs for interconnection services or access charges paid by all mobile companies each time they end a call in another network.

In this way, the new access charge will be $1.8 per minute for the next five years. The average value that existed until the publication of this new tariff decree was $8.7 per minute.

“This measure is a great benefit for all Chileans and also for all SMEs,” said the President.

Mobile termination rates (MTR) in Chile reached an all time high of $25.0 in 2004 and an all time low of $1.38 in 2017.

Termination rates are the charges which one telecommunications operator charges to another for terminating calls on its network.

Now all mobile companies will pay less to terminate calls on their networks (interconnect), thus eliminating a competitive barrier that existed especially for incoming operators, as well as an important dynamism in the offers for users with prepaid plans.

The technical-economic model used by the regulatory authority is in line with technological development, with the increase and deployment of more efficient networks (4G) and also with the general rulings of the Tribunal for the Defense of Free Competition (TDLC), which point to reduce price distortions and asymmetries in access to mobile networks.

From this new setting of access charges it will also be cheaper to call from a landline to a mobile phone, which will empower small entrepreneurs or businesses that use landlines as a fundamental tool to communicate with their customers.

“We are making progress in putting modern technology at the service of a better quality of life for all Chileans,” Piñera said.

With the previous rate of $8.7 per minute, Chile was within the top ten ODCE rates. Now with the new value of $1.8, the South American country will climb in the ranking putting itself at the forefront of the most developed countries.

The government’s proposal was in line to bring tariffs closer to international standards, allowing users of telecommunications services to benefit from lower rates and better service.

President Piñera has also presented a digital platform, which will be an information channel of the Government and also a space to receive the concerns and ideas of the citizens.