In early 2024, WOM, one of the major mobile operators in Chile, filed for Chapter 11 bankruptcy protection in the US. While the telco's future remains uncertain, the filing should allow the company to continue normal operations while financially restructuring and addressing its creditor obligations. WOM Chile’s sister company in Colombia has also filed for bankruptcy under local Colombian law.
WOM Chile has attributed its financial situation to its delayed 5G rollout, stemming from setbacks in building the necessary towers on time — WOM struggled to meet the network requirements of its 5G license and was consequently fined by the Chilean telecom regulator, Subtel. Meanwhile, WOM Colombia has emphasized the struggles of operating in a highly competitive, capital-intensive sector with falling ARPU (Average Revenue per User).
WOM’s uncertain future poses challenges for operators in both Chile and Colombia, with the most drastic outcome being a sudden migration of WOM’s subscriber base to its competitors — WOM Chile has lost 57,000 clients as of April. Despite some similarities, the Chilean and Colombian markets are not equally equipped to manage such a situation. In this report, we examine network congestion to assess operators' resilience ahead of a continued influx of ex-WOM subscribers.
Key Findings:
- WOM makes up a significantly larger share of the Chilean mobile subscriber market (22%) than that of Colombia (7.8%). However, the absolute number of subscribers in Chile and Colombia is similar, 5.7m and 6.5m, respectively.
- Chilean mobile network operators have proportionally fewer cell sites that are congested or at risk of becoming congested than their Colombian counterparts.
- Chilean operators are more resilient than Colombian operators to a migration of WOM’s subscribers due to having more spare capacity, less congestion and better established 5G networks.
- Congested cell sites severely underperform, with even the sites categorized as at risk displaying twice the Download Throughput speeds.
Market share
The market compositions of Chile and Colombia differ significantly in terms of subscriber shares and technology deployment. Both markets have established 3G and 4G networks, but Colombian operators only released commercial 5G services in early 2024. In Chile, WOM makes up about a fifth of the total subscriptions, but this proportion increases up to almost a third for 5G subscriptions due to Claro not yet having launched a 5G service. WOM’s slice of the pie is much smaller in Colombia, under eight percent, with Claro holding nearly half of the market.
Considering the overall size of the two markets, with Chile having nearly 26 million mobile subscriptions compared to Colombia's over 80 million, WOM has a comparable number of subscriptions in each country — 5.7 million in Chile and 6.5 million in Colombia.
Congestion
Leveraging our ONX product suite for deep network insights, we examine congestion at a cell tower level and place cells into five categories:
- Congested Radio Access Network (RAN) — congested with the likely origin being the RAN
- Congested (Non-RAN) — congested with the likely origin being elsewhere e.g. backhaul
- At Risk — without investment, will likely become congested in the next 12 months
- Underutilized — significant spare capacity
- Unclassified — all other cells in the cell count, they are operating efficiently and are not displayed in the graphs
The categories are defined in more detail in the methodology section below.
Chilean operators have a smaller percentage of congested cells than Colombian operators, along with a smaller proportion of cells at risk of becoming congested due to increased data traffic. Additionally, Chilean operators have a relatively higher number of underutilized cells that could help reduce congestion. This is partly because Chile has fewer mobile users per deployed cell site — Chile has a comparable number of total cell sites to Colombia, servicing a third of the mobile subscriptions. Without infrastructure enhancements, an influx of WOM’s subscribers would significantly strain the already congested networks of Claro, Tigo, and Movistar in Colombia.
Although WOM has a larger relative presence in Chile than in Colombia, the number of subscriptions to be served by the remaining networks’ cells is proportionally lower. If all of WOM’s users were spread among the remaining three operators’ cell sites there would be 31 subscriptions per cell site in Chile versus 34 in Colombia (although in practice, users are not evenly distributed and cells in urban centers see higher demand). Moreover, if WOM’s underutilized sites are acquired and repurposed by other operators, this gap between the two markets would increase. Additionally, Chilean operators are more resilient to congestion due to their more established 5G networks, which are currently less loaded than their 4G counterparts, with only 17% of cells congested or at risk.
Performance
User experience is severely worse on congested networks. Our users’ Download Throughput — the speed at which data can be downloaded using fixed file sizes — is 6-7Mbps for congested cells, under half of the speeds seen on cells categorized as at risk. There is an even wider gap between at-risk cells and those with spare capacity, highlighting the opportunity to optimize performance here with power saving measures while still providing good user experience.
WOM’s bankruptcy filing leaves the future of the company in the dark. WOM has already lost a significant number of subscribers and, in the most extreme scenario, could stand to lose far more. Despite WOM’s market share in Chile being more than double that in Colombia, Chile’s network stands to be more resilient to a migration of WOM’s subscribers. Chile has lower rates of congestion on its cell sites, and its 5G networks are more established than Colombia’s. Colombia’s 4G networks have severe congestion issues, and an influx of users to any of the operators could tip the cells categorized as at risk over to being congested — creating 4G networks that are more congested than not.
Operators in both Chile and Colombia will need to invest in infrastructure to mitigate any loss of user experience in this case. Subscribers leaving WOM would create underutilized cells that would be well repurposed on other networks — especially given that WOM is already the least congested network in Colombia. Any unused spectrum allocations for WOM would also help alleviate pressure caused by users switching service. A similar situation occurred in Brazil, with Oi’s mobile unit sold to its competitors — Vivo, Claro and TIM. Here Opensignal’s analysis showed that Oi users enjoyed better mobile network experience post-migration.
To follow the developments in Chile and Colombia, Opensignal will continue to report on the mobile network experience in each market. To learn about how the experience of our users varies between mobile operators, please read our most recent Colombia and Chile reports.
Click here to learn more about how our ONX product suite can help your company gain insights into your network experiences and start driving better results.
Methodology
Cells are placed into the following categories:
- ‘Congested Cells (RAN)’ means the cell is exhibiting signs of congested conditions and the radio link conditions indicate the congestion is most likely occurring in the RAN
- ‘Congested Cells (Non-RAN)’ means the cell is exhibiting signs of congested conditions, but the radio conditions indicate the congestion may not be a RAN issue, indicating the problem lies elsewhere, e.g., backhaul
- ‘At Risk’ means the cell is not currently congested but is expected to become congested in the next 6-12 months as data traffic continues to increase, unless proactive action is taken
- ‘Underutilized’ means the cell has significant excess capacity and could be a target for data monetization or power optimization actions
- Unclassified cells, which are included in the total cell count, are cells which are optimally and are not classified as congested, at-risk of underutilized, i.e. these cells are well utilized and providing a good subscriber experience — delivering a good return on investment
Opensignal Limited retains ownership of this insight including all intellectual property rights, data, content, graphs & analysis. Reports and insights produced by Opensignal Limited may not be quoted, reproduced, distributed, published for any commercial purpose (including use in advertisements or other promotional content) without prior written consent. Journalists are encouraged to quote information included in Opensignal reports and insights provided they include clear source attribution. For more information, contact [email protected].
