Chile's Entel eyeing opportunities in Colombia, to issue debt

SANTIAGO Thu May 23, 2013 2:00pm EDT

1 of 2. CEO of Entel Chile Antonio Buchi answers a question during a Reuters Summit interview at Santiago, May 22, 2013.

Credit: Reuters/Ivan Alvarado

SANTIAGO (Reuters) - Chile mobile operator Entel ENT.SN is on the lookout for potential investment opportunities in Colombia, and will likely tap debt markets "soon" in part to help finance its new operations in Peru, chief executive officer Antonio Buchi said.

Entel is due to wrap up its $400 million purchase of Peru's Nextel from the United States' NII Holdings (NIHD.O) in the third quarter of the year, he added. And Chile's top mobile operator now has its eye on booming Colombia, though there are no concrete plans yet.

"Colombia interests us, just like Peru does," Buchi told the Reuters Latin America Investment Summit.

Business between the thriving, investor-friendly countries of Chile, Colombia and Peru has jumped in recent years.

Entel is now intent on boosting Nextel's offering, which is currently focused on big and medium-sized companies. The aim is to propel Nextel's contribution to Entel's revenue to 15 to 20 percent in around five years.

Entel, which plans to invest $2.2 billion through 2015, is weighing issuing bonds locally or internationally, in part to refinance past debt.

The telecoms company last year received a $400 million loan from a syndicate of international banks.

"I think it will be soon," Buchi said. "We're going to need financing in the short-term.... We're going to need to go to the debt market (with) slightly bigger amounts."

DOMESTIC OPERATIONS SEEN SOLID

Entel expects its leading market share in Chile to hold steady despite heightened competition, though its revenue growth is likely to moderate this year, he said.

"We're hoping (market share) will remain stable. Today we have around 39 percent," Buchi said. "It's fairly competitive and it's a big challenge."

Entel's operations are in good shape, he added, though accounting changes will continue to weigh through the third quarter of this year.

"We're growing," Buchi said. "This year revenue growth will likely be a little lower because the dynamic is a little different," he added.

In the first three months of 2013, Entel's net profit dropped 29 percent year-on-year to $78.8 million on accounting changes that led to higher operational costs.

In Chile, Entel mainly competes against Movistar, owned by Spain's Telefonica (TEF.MC) and Claro, owned by Mexico's America Movil (AMXL.MX).

Buchi said Entel isn't eyeing any opportunities in Mexico, which is set to overhaul its telecommunications sector to boost competition in the industry and tame the likes of billionaire Carlos Slim and broadcaster Televisa.

Shares in Entel fell 1.87 percent in midday Thursday trade, while Santiago's blue chip IPSA .IPSA index was down 0.69 percent.

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(Reporting by Alexandra Ulmer and Felipe Iturrieta; Additional reporting by Fabian Andres Cambero; Writing by Alexandra Ulmer; Editing by Chris Reese)

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