2015 Peru - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses

Peru’s government signs more contracts for national broadband project

Peru’s fixed-line teledensity is among the lowest in South America, at about 9.5%. Obstacles to fixed-line growth include widespread poverty, fixed-to-mobile substitution, expensive telephone services, and geographical inaccessibility in the rugged Andean mountains and lowland Amazon jungles. The Telecommunications Investment Fund FITEL provides subsidies for telecom services in rural areas and other places that are marginal for private providers. The government is addressing these shortcomings via ambitious investment plans to deploy telecom infrastructure and services in underserved areas. In 2015 two contracts were awarded to develop telecom services to four regions. The last of these contracts, undertaken in six stages, is expected to be awarded in June 2016, with most of the work to be complete by the end of 2017.

Trading as Movistar, Telefónica del Perú dominates the telephony market though its subscriber base has fallen in recent quarters. América Móvil’s Claro occupies a distant second place but its share is growing steadily, reaching 20% by mid-2015. Americatel Peru, a subsidiary of Entel Chile, is third with only about 1%.

Broadband subscriber penetration in Peru, at about 6%, is considerably lower than the Latin American average. In this sector the main problem is the lack of competition, which has made broadband in Peru one of the slowest and most expensive in the region. These difficulties are being addressed, and strong broadband growth is anticipated in coming years, feeding off the government’s national broadband project. In addition, the expanding LTE networks are providing mobile broadband to an increasing number of rural communities, as well as providing improved connectivity in urban areas.

Peru’s mobile penetration, approaching 110% in early 2016, is on a par with the regional average though this hides the fact that about a fifth of the population has no mobile phone at all, while many people – especially urban dwellers – have multiple mobile subscriptions. Four companies now compete in the mobile market: Movistar is the leading player with about 54% of the market, followed by Claro, Entel Perú and Viettel Peru, trading as Bitel. Bitel reported having signed up one million subscribers by the end of 2015, a year after launching services. Its extensive 3G network has been augmented by the launch of LTE services in late 2015. Market competition has also benefited from mobile number portability, which is hugely popular. During 2016 the anticipated entry of a number of MVNOs, including Virgin Mobile, will place further pressure on pricing and urge operators to improve their offerings.

This report provides an overview of Peru’s telecom infrastructure, together with profiles of the major fixed-line operators. It also reviews the broadband and digital media markets, as well as recent developments related to mobile voice and data services. The report includes a wide range of relevant statistics and analyses, as well as profiles of the main operators in each sector.

Key developments:

• Government signs contracts for four regional broadband projects as part of $1.16 billion fibre development program;
• Telefónica to invest $1.8 billion in infrastructure to 2016;
• Virgin Mobile Latin America aiming to set up as an MVNO by March 2016;
• Growth in mobile number portability stimulating competition;
• DirecTV launches LTE services;
• Government delays plans to auction 700MHz spectrum for LTE to early 2016;
• Report update includes the regulator’s data updates to October 2015, telcos’ financial and operating data to Q3 2015, recent market developments.

Companies mentioned in this report:

Telefónica del Perú (trading as Movistar), América Móvil Perú (trading as Claro), Americatel Perú, Gamacon, IDT, Convergia, Gilat To Home Perú, Rural Telecom, Valtron, and Nextel Perú, Telefónica del Perú (Movistar), América Móvil Perú (Claro), Nextel Perú, Americatel Perú, Terra Perú, EMax, Yota del Perú (Olo), VelaTel/Perusat, Star Global Com, Best Cable Peru, DirecTV, Telefónica del Perú (Movistar), América Móvil Perú (Claro), Entel Perú, Viettel Peru (Bitel), Virgin Mobile.