The implementation of the 5G network in Chile is generating significant changes in the telecommunications market. This technology, which promises improvements in speed and connectivity, has also highlighted some dynamics and financial concerns in the sector.

WOM, ENTEL and Movistar have taken the lead in this technological race, but their advances have not been without controversy. The recent Supreme Court decision, which halted VTR's entry into the 5G market, demonstrates that the rules of the game are not always clear. This situation This situation causes legal uncertainty and could discourage the development of infrastructure.

A clear reflection of the tensions in the sector is the situation of WOM, which failed to deliver the promised towers within the agreed deadline.. This fact raises questions about its financial situation and the consequences of this non-compliance.

The bond market provides further signals about the financial health of companies in the sector. Specifically, VTR's bond maturing in 2028 has recently traded around 15 cents, a price which suggests a challenging financial situation. WOM's bond has traded around 15 cents, WOM's bond has been trading in the 57 cents zone, which also indicates some risk.which also indicates certain difficulties.

Against this backdrop, ClaroVTR's entry into the 5G market emerges as a key opportunity. The recent tender carried out by the Undersecretary of Telecommunications for the 3.5GHz spectrum could represent its entry into this market, which could provide a significant boost to its financial and operating situation.

Meanwhile, other market players, both national and international, are assessing the situation and looking for opportunities in relation to 5G. Regulatory decisions, necessary investments and the response of the consumer market will play a determining role in the development and consolidation of the network in Chile.

The upcoming 5G tender in Chile is not just a technological milestone. It represents a crossroads for companies such as WOM and ClaroVTR. Their decisions and results in this process will reflect the tensions and challenges facing the industry. Each company's adaptation and response to 5G will be crucial in determining its trajectory and relevance in the coming years.

Cristián Zañartu

Fixed Income Analyst Latam