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COMPANIA DE TELEFONOS DE CHILE, TELECOMS INDUSTRY AND GOVERNMENT REACH PACT ON VERTICAL INTEGRATION

 SANTIAGO, Chile, Jan. 10 /PRNewswire/ -- Compania de Telefonos de Chile (NYSE: CTC) today announced that after three weeks of negotiations with other participants in the Chilean telecommunications industry and the Chilean Government, an agreement concerning vertical integration in the industry has been reached. In accordance with this agreement, the government will submit to Congress an amendment to the current version of the Telecommunications Law under discussion in Congress to permit telecommunications companies to supply long-distance services through independent publicly held subsidiaries. CTC would establish such a subsidiary, a minority of whose shares must be publicly held, to supply such services. Temporary restrictions on long-distance market shares are to be established. For CTC these market caps are as follows:
 MAXIMUM MARKET SHARE CAPS
 Year 1 Year 2 Year 3 Year 4
 Domestic Long Distance 35% 45% 55% 60%
 International Long Distance 20% 30% 40% A
 A -- Free competition is permitted upon the expiration of the four- year and three-year market cap periods for Domestic Long Distance and International Long Distance, respectively.
 Deregulation of long-distance tariffs will follow the implementation of the multi-carrier system. There can be no assurance that the proposed amendment will be approved by Congress as described above.
 CTC believes that this agreement reflects recognition by the Chilean telecommunications industry and the Chilean Government of CTC's right to further participate in the long-distance market.
 -0- 1/10/94
 /CONTACT: Claudio Garcia, senior vice president and chief financial officer, 011-562-206-7056, or Alejandro Rivera, director of investor relations, 011-562-696-1147, both of Compania de Telefonos de Chile S.A.; or Jason Thompson of Dewe Rogerson, 212-688-6840/
 (CTC)


CO: Compania de Telefonos de Chile ST: IN: TLS SU:

JG-SP -- NY017 -- 0445 01/10/94 09:17 EST
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Publication:PR Newswire
Date:Jan 10, 1994
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