Financial Statements - Entel

EMPRESA NACIONAL DE TELECOMUNICACIONES S.A. & SUBSIDIARIESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor Transalation Purposes OnlyAs has been previously noted, Entel’s market recognition is shown by the award offirst place in the Mobile Services Customer Satisfaction ranking, run by theProcalidad organization and Revista Capital, for ten years running and its status asCisco Service Provider Partner of the Year for the Southern Cone of Latin Americain recognition of the leadership that has secured its position as the leading supplierand integrator of systems in Chile.In terms of regulatory ruling for the services the Group provides at a domesticlevel, a range of reforms that will affect competition, accelerate Internetpenetration, and control the deployment of antennas in urban areas have beenenacted or are in the advanced stages of the legislative and administrative process.As mentioned in the notes to the financial statements, these reforms include theestablishment of mechanisms to provide better information to allow users tocompare the Internet services, the elimination of the national long-distancecategory, telephone number uniformity, number portability for mobile and fixedservices, the incorporation of infrastructure suppliers, and incentives for increasedbroadband access. Similarly, the industry regulator has providedtelecommunications companies with instructions, establishing requirements for thesupply of services differentiated by destination network (Net/Off-Net traffic) andinstructions that restrict and regulate the supply of telecommunications servicebundles (within the same network or different networks).On July 30, 2012, the subsidiary Will S.A. participated in a bidding process run bythe Department of Telecommunications for the allocation of public fixed andmobile data transmission services on the 2,600 MHz band, and was awarded blockB of three 40 MHz blocks, all of which were assigned.This spectrum is used in the majority of countries for the development of LTE(Long Term Evolution or 4G) technology.The value of the concession is CLP $4.3 billion. There are investment commitmentstotaling USD $106 million over a period of 12 to 24 months, starting from the dateof the decree for the award, which is currently being processed by the authorities.Faced with the aforementioned regulatory changes, the diversity and scale of theEntel Group allows it to mitigate against the consequences of potentially adverseregulations as well as create new business opportunities. However, in the contextof a regulated industry, it is impossible to rule out changes that may impact profitsor limit future possibilities for growth.Changes in Sales RevenueIn the Comprehensive Income Statement, the Group’s revenue is represented byRevenue from Ordinary Activities, Other Revenue, and Other Earnings (Losses).Revenue increased by 16% between 2012 and 2011, as per the following breakdown:- 79 -