Chile ICT Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

Chile's ICT Market is expected to grow at a CAGR of 9.3% over the next five years. Increasing emphasis on digital technology and advanced technology, such as cyber security, artificial intelligence, and robotics, drives the market's growth. The ICT market across the Country is increasing due to strong spending on hardware and software services by Chilean companies.

Key Highlights

• The ICT sector includes both the IT and Telecom markets. IT investments are growing, and the ICT market demand is expected to grow significantly over the next five years. The increasing need to explore and adopt digital technologies and initiatives, the increase in the overall demand for digitalization and increasing IT infrastructure developments, the wide 5G network adoption, and the rising penetration of technology investments are boosting the Chile ICT market growth significantly.
• The government took initiatives to develop the ICT industry, which would drive new growth opportunities for the ICT market. For instance, Microsoft Cloud would improve remote work communications and learn through services such as Microsoft Teams, enhance the reliability and scale of Chilean businesses' services, and empower individuals, the public and private sectors, and the Chilean government to innovate with the latest developer tools. Furthermore, Microsoft created a robust skilling strategy for up to 180,000 Chileans and an Advisory Board comprised of local leaders to create inclusive opportunities for success in the digital economy.
• Although information and communication technology (ICT) is everywhere, it plays a significant role in the Country's economic development. For Instance, Huawei would provide AI cloud services in Chile. The new data center facility is located in Santiago. Such initiatives would bring new growth opportunities for the Chilean ICT market.
• The ICT industry significantly impacts the GDP of Chile. According to the IMF (International Monetary Fund), Chile's GDP is expected to grow by USD 407.86 billion by 2027. The county's GDP is growing significantly with increasing IT investments that would create new growth opportunities for the Chilean ICT market.
• According to ITU (International Telecommunication Union), internet penetration in Chile is expected to grow steadily from last year to 2026. As per the research, the Country's internet penetration increased from 86.7% in the previous year. Also, Chile's internet penetration is expected to grow by 88.8% by 2026. The growing internet penetration would drive new growth opportunities for the Chilean ICT market.
• Due to the COVID-19 pandemic, a large portion of the Chilean population was forced to stay at home constantly, and many opted to work from home due to increased broadband consumption. Post COVID-19 scenario created an unexpectedly high demand for mobile, fixed broadband, fixed voice, pay-TV, and OTT services. The high demand for mobile and residential broadband access created new growth opportunities for the Chilean ICT market.

Key Market Trends

Growing demand for Cloud Technology

• Chile's ICT industry is driven by the significant increase in private and government investment, rising consumer spending, and increasing demand for cloud services. For Instance, Kyndryl, the world's prominent IT infrastructure services provider, announced a partnership with Oracle to help customers accelerate their journey to the cloud by delivering managed cloud solutions to enterprises worldwide.
• For Instance, Oracle Corp intends to extend its public cloud platform by establishing 14 new global cloud zones. Oracle aims to build 14 cloud regions across four continents. They would be made in Italy, Sweden, Spain, Singapore, South Africa, Mexico, Colombia, the United Arab Emirates, Saudi Arabia, France, Israel, and Chile, among other places. The increasing infrastructure development would increase demand for cloud computing technology adoption, creating new growth opportunities for the Chilean ICT market.
• Key players in the ICT market upgrade their existing technology with cloud computing solutions primarily drives the market growth. For Instance, Kyndrylthe world's largest IT infrastructure services provider includes a strategic partnership with Google Cloud, focused on accelerating customers' digital transformations and helping them become more advanced, data-driven, and sustainable businesses.
• Furthermore, the increasing investments by the government in promoting numerous technology development, such as 5G, AI, IoT, machine learning, Big Data, etc. Additionally, the digital transformation emergence is expected to drive the Chilean ICT market growth. For Instance, Google Cloud Platform (GCP), a cloud service provider, announced expansion plans and incremental details on its cloud regions in Santiago (Chile).
• The growing population in the region and the increasing need for adopting advanced technologies such as Cloud, IoT, and artificial intelligence are boosting the market's growth. According to the IMF, Chile's GDP will be USD 407.86 billion by 2027. It indicates that the GDP is growing, and the development of the Chilean ICT market is expected to grow over the next five years.

The IT and Telecom Sector is Expected to Drive the Market

• The increasing IT and Telecom infrastructure investments are driving the ICT market growth. For Instance, Huawei plans to build its third data center in the Santiago Metropolitan Region in Chile in the first half of 2023. The facility would involve an investment of around USD 100 million. Such investments would bring new growth opportunities for the Chilean ICT market.
• Cyberattacks are expected to continue to grow over the next five years. IT operation advancements will prevent the ICT market from cyberattacks. For Instance, Radware, a prominent cybersecurity and application delivery solutions provider, opened a new cloud security center in Santiago, Chile. Customers in Argentina, Chile, Peru, and Uruguay would be able to increase their cyber defenses, protect their web and mobile apps and APIs with minimal latency, and meet data localization requirements. Such initiatives would bring new growth opportunities for the Chilean ICT market.
• The country's 5G transition is still rising due to expanding new networks and increasing demand for high-speed connectivity services. For Instance, Entel completed the first stage of its 5G network rollout, with it available in 270 of the country's 346 communes. 5G extend its coverage to cover 300 sites, including 199 public hospitals, 25 universities, 24 government ministries, 19 seaports, and 15 airports.
• The telecom industry growth is mainly due to the increasing population with the rising broadband services adoption in the country. According to the Ookla Speedtest Global Index, Chile ranked 3rd with a median fixed broadband download speed of 220.96 Mbps in December last year. Fixed broadband services penetration is growing significantly and thus increasing the telecom services sector demand.

Competitive Landscape

Chiles's ICT market is highly competitive and moving toward the fragmented stage as the market currently consists of various significant players. Several key players in the ICT market are in constant efforts to bring advancements. Some key players in the market are Microsoft Corporation, Oracle, Google LLC, Cognizant, and IBM. Some of the current growth in the market are:

February 2022 - Infosys, one of the world's prominent providers of next-generation digital and consulting services, is a Foundational Partner supporting the Google Cloud Cortex Framework's deployment. As part of the agreement, Infosys will assist customers in accelerating their digital transformation and identifying and driving new business possibilities using data, analytics, and artificial intelligence (AI).

May 2022 - Equinix, Inc., the world's digital infrastructure firm, announced the expansion of Platform Equinix into Latin America with the acquisition of four data centers in Chile from Entel, a prominent Chilean telecommunications provider.

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