GTD Begins Regional Expansion

Chilean alternative telecoms operator Grupo GTD has announced its first international acquisition. The company will acquire Colombian corporate telecoms operator Flywan, which offers data and internet services in major cities in Colombia. GTD has quickly expanded in recent years, launching mobile services and becoming one of the key competitors to incumbent Telefónica de Chile. BMI believes the acquisition is a positive step for the company as it seeks to grow its position in the regional telecoms market.

Latin American telecoms markets are dominated by two main players, Spain's Telefónica and Mexico's América Móvil. Both companies have become stronger competitors over the past two years as each has consolidated units in several markets to create single telecoms players with services in mobile, fixed-line, broadband and pay-TV services. Few other operators in the region have similar scale, making these the companies to beat.

Opportunities To The North
Broadband Penetration Rates (%)

In Chile, GTD has built a strong reputation for high-level services, being the first to roll out fibre-optic broadband to commercial clients. GTD's acquisition of Telsur in late 2009 gave it a licence for mobile services as an MVNO, which the company launched as GTD Móvil in May 2012, announcing service expansion in August. A failed merger with fellow Chilean alternative operator Entel in late 2011 has not put the company off its expansion plans.

GTD's acquisition does not put it in any greater competition with Telefónica and América Móvil, as the scale of the companies does not compare. However, its expansion plans will help it become one of several smaller regional operators, seeing GTD take advantage of economies of scale that will help make it more competitive. GTD announced it would invest US$50mn in 2012 on strengthening its mobile services and considering international investment opportunities. Peru and Colombia are understood to be GTD's main targets and, with the company's good experience in broadband services, BMI believes GTD's presence will be a boost to these markets.

The company's solid reputation for offering the latest services and networks will certainly benefit Flywan. In expanding its services, particularly into the enterprise market, GTD is creating a strong growth path for its operations. Although GTD is investing in the enterprise market, BMI believes that, in the long term, broadband usage will increase as prices fall as a result of additional competition. Peru's low broadband penetration rate would also be boosted by the entrance of an operator with GTD's experience.

This article is tagged to:
Sector: Telecommunications
Geography: Chile, Chile, Colombia, Peru, Chile, Chile, Chile, Chile, Chile, Chile

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