April 28, 2020 / 8:25 PM / a month ago

Chile's Entel hopes for strong 2020 as demand for telecoms booms amid coronavirus crisis

SANTIAGO (Reuters) - Chile telecoms giant Entel expects strong performance this year in Chile and neighboring Peru as quarantine measures to combat coronavirus increase demand for its services, though it cautioned that a global downturn could have unintended consequences.

FILE PHOTO: Workers clean the windows of the office building of Chilean telecommunications company Entel at the district of San Isidro in Lima, Peru September 1, 2018. REUTERS/Mariana Bazo

Most South American nations have imposed long-term restrictions on travel and mobility, forcing many to work from home and boosting sales and demand for many of the region´s telecoms companies.

“This business is very resilient to crises, since the need of people for our services is great in situations like this,” Chief Executive Antonio Buchi said in a statement.

Buchi later told reporters it would be difficult to predict the impact of the outbreak on the company´s results due to increasingly dire economic forecasts for the region.

“The two things are going to mix,” Buchi said, with a potential recession putting the brakes on consumer spending, even as it inspires more dependence on telecommunications.

The company said in a statement ahead of its annual shareholders meeting that Peru remains its most promising market.

“Peru continues to be the market where we see the greatest potential for growth, with a telecommunications industry that offers us attractive opportunities,” he added.

In the near term, however, Entel said it expects to focus most of the $433 million of investment slated for 2020 on the development of the mobile and home business in Chile.

That figure is down from $600 million worth of investment in 2019, a decline the company blamed primarily on the falling Chilean peso, which this year hit a historic low.

Buchi said the company would finance the investments with its own funds and had no plans to issue more debt outside of potential refinancing of existing debt.

Entel´s plans were, however, subject to change as the coronavirus outbreak evolves, the company said.

Chile has confirmed nearly 14,000 cases of the virus, while Peru has reported more than 28,000 cases.

Reporting by Fabian Cambero; writing by Dave Sherwood; editing by Jonathan Oatis and Dan Grebler

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