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The decision of the regulator who faced Claire and other operators



Writing economics

There is a real difference in the communication sector and has to do with whether Claro dominates the mobile data market or not. That is, if you have a position and size that allows you to determine how the market works, giving prices and making offers with which other players can not compete.

The decision is in the hands of the Communications Regulation Commission (CRC). If declared dominant, there may be restrictions on Claro's bids. It was expected that, after two years of analysis, last Wednesday there would be determination in this regard. However, at the end of the day, it was known that the attendees at the session requested additional information. This is the last word postponed for the next session.

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In short, there are two positions: Claro, which confirms that others expect benefits through regulation, rather than competing with investments and quality; and other operators, who do not doubt the existence of Claire's domination. In fact, on Wednesday they published a joint letter addressed to President Iván Duque, the CRC, the Office of the Procurator, the Republican Congress, among others.

What operators say (less Claro)

"Despite the great efforts being invested, the current offers, the fight in the market and the commitment to provide better services to the customers, the market is not dynamic, which is due to everything, and not partially, the lack of competition in the sector, resulting from the high involvement of the operator in services that influence their low level of growth with their ability to determine the market.The dominant voice operator is expanding its influence on the data market, both fixed and digital, so urgent intervention is needed, "the letter, signed by Telefónica, Tigo, ETB, Flash Mobile , Virgin and Suma.

In figures, at the end of 2018, of the total of 11.6 million subscribers to the mobile Internet, Claro had more than 6 million (ie More than 50%), compared to 3.4 million and 1.4 million Movistar and Tiga. Avantel had more than 527,000 in the fourth place.

After the decision was postponed to the CRC, several of them expressed uncertainty as to whether the issue would be left to the new regulator, which will be created from the recently approved Law on ICT, which could mean delays in resolving the disagreement.

"After two and a half years of analysis of this issue – with more than 3,000 million pesos invested in studies – and in the interests of closing the digital divide of the country based on spectrum distribution, it is necessary for the regulator to act and do it now," Telefónica director Fabian Hernandez said.

Marcelo Cataldo, President of Tiga, said: "The way this decision is postponed is a huge risk for the sector and, above all, for users. Delaying the decision is undoubtedly beneficial to Claro, who will continue to use his position to pass on his scope to fixed services, through an offer that is known as a "quadruple game".

In the meantime, Avantell said that "the decision of the CRC that recognizes the dominance and definition of regulatory measures will signify significant progress in the transformation and revitalization of the ICT sector that is being added to the approval of the Law on Modernization of the Sector creates favorable conditions for fostering investment, strengthening the economy with the improvement of productivity and competitiveness promoting the creation of jobs and generally providing the country with solid regulatory bases for improving the digitization of the economy, favoring users in the first place, who in a very short time can have access to better product and service offerings. "

Claro's answer

At that time, Claro came out, saying that he believed that "the market is not divided or distributed, the product is obtained or lost, and therefore we are investing, working and strengthening day by day in order to offer more users." The user is the one who must choose "He said.

He described it as "absurd" that some of Claire's competitors are seeking regulation that gives them what they should earn by competitors in the market. We wonder if what they really want is to promote competition, that regulation prevents them from making the necessary investments in order to equalize or improve Claro's offers.

He explained that his average annual investment is $ 900 million a year between 2012 and 2016. As for that, Tigo replied that it was not true that competitors did not invest and pointed out a figure of about $ 1 trillion a year. the company leading, a figure similar to that in Movistar.

Claro added that "it should not be forgotten that Claro's competitors and multinational companies, with presence in several countries in the region and at a level comparable to Claro, nothing prevents them from investing in Colombia at the same level." Movistar, in turn, that in other markets, such as Peru and Spain, it was declared dominant and that this did not affect the flows of investments in those countries.

"The function of the regulator is to promote competition; does not protect any competitor from the competition, except in the fundamental sector for the development of the economy, "Claro concluded, not without mentioning that the Control of Industry and Commerce (SIC) – in his concept of Claro's domination – said that" probation support is not enough it proves that COMCEL (Claro commercially) meets each of the elements that allow it to qualify as an operator with a dominant position on the market of "mobile services", under the conditions and conditions it has established itself. "

However, other operators have interpreted that the SIC concept requires audits, but does not object that Claro be declared dominant. The CRC, for its part, limited the clarification that the debate on this topic will continue at the next session of the commission, without a specific date for it.


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