Publication Overview
Peru is one of the most promising telecom markets in Latin America. This annual report provides a comprehensive overview of trends and developments in Peru’s fixed-line, mobile, broadband, and pay-TV sectors. Subjects include:
- Market and industry analyses and overviews;
- Facts, figures, and statistics;
- Government policies affecting the telecoms industry;
- Telecom infrastructure;
- International satellites and submarine fibre optic cables;
- Major players, revenues, subscribers, mobile ARPU;
- Fixed broadband (ADSL, cable modem, wireless);
- Internet and VoIP;
- Convergence and triple play solutions;
- Pay TV market;
- Mobile voice and data markets;
- Next generation mobile (3G, 4G, mobile broadband, LTE);
- Scenario forecasts for the fixed-line, mobile, and broadband markets for the years 2015 and 2020.
Researcher:- Lucia Bibolini
Current publication date:- July 2011 (10th Edition)
Executive Summary
Peru’s telecom market attracts investors
Thanks to liberal telecom regulations and one of the highest GDP growth rates in Latin America, Peru’s telecom sector is a profitable investment target. The country’s economic expansion has made it a star performer in Latin America, but problems persist. GDP per capita is still far lower than the regional average, inequality is high, and the indigenous populations live in abysmal conditions.
In 2010, Peru’s telecom sector grew 13%, generating revenues of US$4.5 billion, and sales are likely to reach more than US$4.9 billion in 2011. Between 2011 and 2016, we see the market expanding at a Compound Annual Growth Rate (CAGR) of 6.5%.
The fastest growing telecom markets are mobile, broadband, and pay TV. Mobile broadband, in particular, has enormous growth potential in Peru, where it is able to fulfil a need that the fixed infrastructure has been unable to satisfy. While mobile subscribers have passed the 100% penetration milestone, fixed teledensity is only 10%.
In fact, Peru’s fixed-line teledensity has been stagnating since 2009, although it is the third-lowest in South America after Bolivia and Paraguay. About 63% of the country’s fixed lines are in Lima and Callao, where teledensity is 19.7%. By contrast, teledensity is a mere 0.9% in the mostly indigenous mountain region of Huancavelica.
Obstacles to fixed-line growth include widespread poverty, fixed-to-mobile substitution, expensive telephone services, and geographical inaccessibility in the Andean mountains and lowland Amazon jungles. An additional problem in is the theft of copper cables, which often leaves hundreds of subscribers without telephone service. Due to Peru’s rugged territory, VSAT satellite networks have been used to provide rural telecom coverage. CDMA 450 is also being deployed in rural and urban low-teledensity areas.
The incumbent Telefónica del Perú (TdP) – trading as Movistar – continues to dominate Peru’s fixed-line sector. The regulator has tried to increase competition mainly by regulating tariffs and charges. Although it succeeded in reducing TdP’s monthly fixed-line charges by about 30%, these rates are still among the highest in Latin America.
Likewise, the fixed broadband market suffers from lack of competition, which has made Movistar’s ADSL prices among the most expensive in Latin America. As a result, fixed broadband penetration in Peru is about 56% lower than the Latin American average. The only tangible competition comes from the cable modem service offered by Telmex/Claro as part of its triple-play bundle.
Public access, however, has made the Internet available to many Peruvians who would otherwise have been unable to afford it, especially among the younger generation. In fact, Peru is a world leader in terms of people who access the Internet in public places. About 56% of users still access the Internet from the cabinas públicas, but the number is decreasing in favour of home access.
In contrast to fixed telephony and broadband, Peru’s mobile penetration is higher than average for Latin America, a remarkable achievement considering that the country’s GDP per capita is far lower than the regional average. There are, however, huge geographical disparities within Peru. While mobile penetration is over 120% along the southern coast, it is much lower in the Andean and Amazonian regions. In Huancavelica, it is as low as 26%.
Three companies compete in the mobile market: Movistar is the leader; América Móvil, trading as Claro, is in second place; and third is Nextel del Perú. In early 2011, Vietnamese military-owned Viettel won spectrum to become the country’s fourth mobile operator. Expectations in Peru are high, with mobile users keen to try Viettel’s services, which are expected to become available by end-2011. Virgin Mobile has also announced plans to enter Latin America’s mobile markets – including Peru – as a Mobile Virtual Network Operator (MVNO).
Market Highlights
- Telefónica del Perú has adopted the group’s mobile brand name, Movistar, to market all of its fixed-line services – including pay TV, which has been re-branded from Cable Mágico to Movistar TV.
- Telmex Perú and Claro Perú, previously sister companies, have been consolidated at the shareholder level and use the same brand name, Claro, for all services – whether fixed or mobile.
- Movistar’s fixed lines in service are shrinking while Claro’s are posting double-digit growth rates.
- Mobile penetration has crossed the 100% milestone.
- Mobile market growth is driven by postpaid customers, mobile broadband, and smartphones.
- To decrease the use of mobile phones for criminal activities, prepaid mobile users have had to register their SIM cards, and almost one million unregistered users had their phones cut off in March 2011.
- The Peruvian government is planning to auction spectrum for LTE services.
- Vietnam’s Viettel is entering the Peruvian mobile market and has plans to invest US$250 million in a fibre-optic network.
- Virgin Mobile aims to launch Mobile Virtual Network Operator (MVNO) services in Peru.
- Perusat, a subsidiary of ChinaTel, is rolling out a nationwide WiMAX (LTE-Ready) network.
- Russia’s Yota has promised to cover 12 regions of Peru with a WiMAX network.
- The regulator Osiptel has adopted differentiated interconnection charges for rural areas.
For those needing an objective and high-level strategic analysis on Peru, this report is essential reading and gives further information on:
- The development of Peru’s fixed-line, mobile, broadband, and pay TV sectors together with industry outlook and forecasts.
- Company performances and ARPU.
- Analyses of Peru’s broadband and mobile sectors.
- How different scenarios are likely to affect the fixed-line, mobile, and broadband markets in the ten years to 2020.
Peru fixed-line, broadband, and mobile statistics – 2009 - 2011
|
Sector
|
2009
|
2010
|
2011 (e)
|
|
Fixed-lines in service
|
|
Total subscribers (million)
|
2.97
|
2.95
|
2.98
|
|
Penetration rate
|
10.1%
|
10.0%
|
9.9%
|
|
Annual growth
|
3.0%
|
-0.4%
|
0.9%
|
|
Broadband
|
|
Total subscribers (million)
|
0.81
|
0.92
|
1.03
|
|
Penetration rate
|
2.8%
|
3.1%
|
3.4%
|
|
Annual growth
|
12%
|
14%
|
11%
|
|
Mobile telephony subscribers
|
|
Total subscribers (million)
|
24.75
|
29.26
|
33.00
|
|
Penetration rate
|
85%
|
99%
|
110%
|
|
Annual growth
|
18%
|
18%
|
13%
|
(Source: BuddeComm based on industry data)
