ClaroVTR: Delivering a Differentiated Experience to Customers in Chile

Chile, one of the longest countries in the world, is a leading economy and a growing technology hub in Latin America. It boasts one of the most mature and competitive telecom markets in the region. Patricio Olivares de la Barra, CTO of ClaroVTR, discussed their strategy to navigate the highly competitive and fast evolving market at MWC Shanghai 2024. He highlighted their solid fixed network performance post-merger and their plan for 5G deployment, emphasizing the company’s commitment to providing the best network quality in both fixed and mobile sectors.

Based in Santiago, Chile, ClaroVTR offers a range of services, including mobile and fixed telephony, broadband internet, and television services. In October 2022, Liberty Latin America and América Móvil combined their Chilean operations—VTR, a leading provider of high-speed consumer fixed products with close to 3 million subscribers nationwide, and Claro Chile, one of Chile’s leading telecommunications service providers with over 6.5 million mobile customers—to establish ClaroVTR.  

The Chilean telecom market has witnessed strong growth in recent years. How would you assess ClaroVTR's transformation throughout the years?

Just as you said, Chile is one of the most competitive markets in the world. That’s why it’s really important to for people to understand what’s happening in Chile. With a relatively small market size for operators—Chile has a population of 20 million people—we have to find ways to thrive. The only way, as we believe, lies in customer experience. That’s why we were always looking to have the best technology to enhance customer experience.

I believe the assets of ClaroVTR have proven to be very good at the end, as we have achieved the lowest churn in the fixed sector. We continue growing our customers in the fixed sector, and achieved the top position in Chile at the end of last year. Therefore, the value of the assets of this merge was very good.

However, it's important to tell you, one week ago, América Móvil took control again of the company, acquiring a 91% stake of the company while Liberty holds the remaining 9% (Editor's note: the transaction is subject to obtaining the required approval from Chile's National Economic Prosecutor's Office). We achieved great success in terms of technology and the merger. Integrating the companies was not easy, but we have been doing it very well. Now, with América Móvil holding a majority stake in ClaroVTR, we believe we'll have a bright future ahead.

What are your plans to achieve fixed and mobile convergence (FMC)?

About a week ago, we won 50 MHz in 5G. This was very good news for our company. One of the reasons that I am here is because of that. We were actively pursuing the 50 MHz, and finally we won, so we are going to deploy 5G. We believe we are in the right moment to deploy it. And the network we are installing will adopt the latest technology.

What’s your approach to implementing FMC?

The first thing is to create a core with very good quality. After creating a high-quality core, we can merge the fixed network with the mobile one for better reliability. We are working on putting some chips on the ONTs in the houses of the customers. When we have some issues with the fixed network, it can recover from the mobile network. This is the most important thing. All operators are trying to merge the mobile and the fixed network because, finally, there is one customer and we have to be available for the customers in their house and also in the city.

Chilean operators have lower EBITDA margins compared to neighboring countries such as Columbia. How challenging is it to be profitable in Chile, and what strategies do you have to enhance your profitability in the saturated Chilean market?

That’s a good question. As you mentioned, the EBITDA margin in Chile is the lowest in the world. Why is that? Because, as I said in the beginning, we face intense competition in the market. How can you compete with that? By offering decent prices. However, after many years, we know that customers request more services and more experiences. Then, it is time to give them a differentiated experience. That’s the most important aspect. And we believe we are going to provide the best quality of the network in both the mobile and fixed sectors.

Our strategy is to keep the customers with us. While we gain new customers every month and the amount of new customers is very good, we need to reduce the churn. The only way to do this is to figure out why they are going down and address these issues. We are working very hard putting the customers at the center of the company. Everybody in the company is going to work for the customers, and the structure of the company is related to give the customers the best experience. That’s the only way to survive. We are going to provide the best technology and best experience for them.

How do you enhance customer experience specifically?

We are working to provide all the capacity that customers needs. We give them more capacity, more availability and less latency. If we have a problem, we have to recover as soon as possible.

ClaroVTR have collaborated with ZTE in sectors like transport networks. How would you describe ZTE as a partner?

We have been working with ZTE in some places. It’s an IP RAN that has some mix and ZTE is part of our network. This partnership has delivered very good results and high-quality services for our customers. We have supported each other as a team.

What are your aspirations for ClaroVTR’s future trajectory, and what are your primary goals for the upcoming three years?

Our aim is to enhance our customers’ connectivity experience and promote the digital development of Chile. In the upcoming years, we are going to deploy the best 5G network in Chile. We are going to provide the best fixed service with FTTH, which is our focus. Additionally, for the enterprise sector, we have the biggest data center in Chile, where we can give services such as data center security and many other things.