2014 Peru - Telecoms, IP Networks, Digital Media and Forecasts

MNP portings to be reduced to 24 hours, coinciding with launch of Viettel’s mobile service

Peru’s fixed-line teledensity is the third lowest in South America after Bolivia and Paraguay. A number of obstacles to growth in the sector remain, exacerbated by the popularity of mobile services as a preferred alternative in many rural areas where fixed-line infrastructure remains poor. The Telecommunications Investment Fund FITEL provides subsidies for telecom services in rural areas and other places that are considered uneconomical for telcos.

Telefónica del Perú (trading as Movistar) dominates the telephony market, followed by América Móvil’s Claro division and Americatel Perú.

Although Peru’s mobile penetration is below the regional average, the market remains very uneven, with low penetration in rural areas while multiple SIM card use is popular in urban areas. The market is a triopoly of Telefónica (Movistar), América Móvil (Claro) and Americatel Perú (Emtel). Vietnam’s Viettel is expected to launch services later in 2014, following many delays, while Virgin Mobile also plans to enter the market as a Mobile Virtual Network Operator (MVNO). The market has considerable potential to expand, especially if economic growth continues in coming years.

Broadband penetration is considerably lower than the regional average. The country remains affected by wide-scale poverty, limited levels of literacy, low computer penetration, and poor competition, which has made broadband services among the slowest and most expensive in the region. Nevertheless, strong broadband growth is predicted during the next five years at least as a result of the government’s national broadband plan which aims to provide internet connectivity via a fibre-optic backbone to many less urbanised regions. Mobile broadband will be the main growth platform.

Key developments:

Fixed Number Portability to be launched by July 2014, with MNP porting process to be reduced to one day; Telefónica Large Enterprise (TGE) begins testing High Throughput Satellite (HTS) Ka Band technology; Telefónica to invest $1.8 billion in infrastructure to 2016, focuses on broadband, pay TV, and data to compensate for erosion of fixed-telephony services; Movistar’s LTE subscriber base reaches 70,000 by May 2014; Viettel prepares to launch mobile services by mid-2014, completes its obligation to provide fibre-optic broadband to 2,000 public schools; government plans to hand over all 900MHz spectrum to Viettel by mid-2015; Americatel Peru plans $400 million investment in LTE; Claro launches Clarovideo service, rolls out fibre service to Pucallpa, providing broadband at up to 60Mb/s as well as digital TV; slow progress in fibre builds attributed to municipal bureaucracy; cable broadband remains poorly developed, with only about 2% household penetration; report includes telcos’ operating data to Q1 2014, regulator’s market data to December 2013; market developments to May 2014.

Data in this report is the latest available at the time of preparation and may not be for the current year