Subtel Leaves Door Open for Nextel

Thursday, November 23, 2000

Chile's telecom regulator #Subtel# will not bar US-based mobile operator #Nextel International# from entering the local market since it has no intention of barring new technology from entering the country, Telecommunications undersecretary Christian Nicolai said in response to Nextel's plans.

"Our legislation is absolutely independent of technology. I will not put up any barrier to the entry of technology in Chile," Nicolai told reporters yesterday.

Nextel International acquired three Chilean companies with specialized mobile radio licenses during 2Q00. Nextel International uses #Motorola#'s (NYSE: MOT) Iden technology to provide trunking services such as mobile telephony, short messaging, radio and data transmission services all in one handset. Iden is popular among business clients because it allows one person to communicate with a number of people at the same time.

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Incumbent mobile operators have threatened to take legal action against Nextel International on the grounds that the use of trunking frequencies to provide mobile telephony violates the nation's telecom law because Nextel did not participate in a public licensing process for the service. Nextel could not be reached for comment.

The company has already applied to Subtel for the necessary operating concessions, a subject Nicolai declined to discuss. "Concessions are required to offer public services. Those are the rules and we will act based on them," he said.

Chile's crowded mobile telephony market is likely to become even more crowded given Subtel's affinity for introducing new technologies and fostering competition. #Telefonica Movil# posted a loss of US$47.8mn for 3Q00, #Entel Chile# reported a US$1.6mn loss for its two mobile subsidiaries for the period, while #Smartcom PCS# does not foresee profits until 2002. #Bellsouth# (NYSE: BLS) did not report the results of Bellsouth Chile separately.

Nextel International, a subsidiary of #Nextel# Communications (NASDAQ: NXTL), has operations in Brazil, Mexico, Argentina and Peru.