Development of competitive advantages in electronic communications markets in South America: the cases of Argentina, Brazil and Chile.

Summary The purpose of this thesis is to determine the presence of competitive advantages in South American electronic communications markets. The main operators present in the region, including Telefónica and América Móvil, entered under favorable conditions when the industry was privatized during the 1990s. From the early 2010s, changes in regulation tend to make markets more competitive. The evolution of performance in this context offers the opportunity to observe which operators have a competitive advantage, and which are in a position to compete due to favorable entry conditions. This thesis is organized into five chapters. The first two chapters present the institutional context and the evolution of the telecommunications markets in the three countries mentioned. In the third chapter, we establish that competition in the three countries is infrastructure-based and is accompanied by qualitative differentiation between operators. In order to determine whether this differentiation leads to competitive advantages, we analyze the presence of links in the evolution of operating margins, and in the volatility of operators' stock returns (fourth and fifth chapters). Our results indicate that there are short-run links in the evolution of operating margins between operators present in the same country, which indicates insufficient differentiation to avoid competitive pressures. Moreover, the volatility of returns on shares of national operators is much higher than that of multinational operators.