Mobile companies in Chile cut their average discounts from 35% to 11% in one year, according to La Tercera, which cites an analysis Entel presented to its investors. Movistar and Wom eliminated them entirely, and three of the four major operators now offer only three plans.
Entel's analysis breaks down prices by operator in August of this year, although it does not name its competitors. In August of last year, discounts during the first six months averaged 42% at Entel, 41% at Movistar, 33% at Wom and 24% at Claro.
Today the picture has changed. Wom and Movistar offer no discounts. Claro takes $1,000 off two of its three plans. Entel keeps discounts for six months, averaging 30%.
Mobile line prices range from $9,990 to $39,990. According to the official websites reviewed by La Tercera, Claro has the lowest prices, with plans at $9,990, $12,990 and $17,990. Wom and Movistar matched their offerings at $10,990, $13,990 and $18,990.
Entel is the exception. It has six plans, starting at $13,990, and the highest prices on the market, although it includes more features, such as roaming (using the phone abroad).
For you as a user, the change is like going from a street market with deals every week to a supermarket with fixed prices. There are fewer surprises on the bill, but the steep discounts in the first months that made switching companies worthwhile are also gone.
Wom defended its strategy. "There are different ways to compete on price: trying to be the cheapest or offering the biggest discounts. We chose clarity", the company said about its "Planes SIMPLE". Analysts cited by the outlet attribute Wom no longer having the lowest prices to the reorganization it emerged from just under two years ago.
At Movistar, now owned by Millicom, the telecommunications group that operates under the Tigo brand in Colombia and Central America, the three plans are part of a formula the company has applied in several countries to improve the profitability of its operations.
Daniel Gurovich, executive director of G&A Consultores, explained that the market is organized by ARPU (average monthly revenue per user). According to him, Entel still concentrates the customers with the highest ARPU. After two or three years of uncertainty over the sale of Movistar, that segmentation became less clear.
Gurovich added that Claro still has service quality gaps compared with Entel and Movistar, so it must keep competitive offers, and its main competitor remains Wom.
The adjustment comes after a decade of falling prices. Alfie Ulloa, president of the Asociación Chilena de Telecomunicaciones (Chile Telcos), the Chilean telecommunications industry association, said last week at the País Digital Summit that over ten years the IPC (consumer price index) rose 57.5%, while telecommunications services fell 36.5%.
That decline began with Wom's arrival in Chile in 2015, which set off a price war. Its former CEO, Chris Bannister, maintained that average consumption went from 2 to 22 gigabytes per month after its market entry.
According to the analysis cited by La Tercera, the smaller discounts reflect the need to increase revenue, improve profitability and fund investments to improve network quality, a view the outlet attributes to Patricio Boric.
