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(Last updated: 08 May 2008)
Trends and opportunities
The market
Telecommunications and information technologies are priority sectors for the Peruvian Government and its economy. Along with mining and tourism they constitute a key engine of growth for investment, technological advancement and education.
The Peruvian telecom market was liberalised in 1998, and the country enjoys free competition in all telecom sectors. Despite liberalisation, telecommunications are largely in the hands of one single company, Telefónica del Perú (Tdp), which still has a near monopoly in the local fixed-line market (96 per cent) and also dominates the mobile sector.
At just over eight per cent, Peruvian fixed-line teledensity is among the lowest in Latin America. This can be blamed on high interconnection rates, low GDP per capita, fixed-to-mobile substitution, TdP's hegemony, and geographical inaccessibility.
Long-distance calls service, on the other hand, are enormously competitive, stimulated by the multicarrier system introduced in April 2002. There is no limit to the number of long-distance licensees. Besides TdP, the main long-distance carriers are: IDT Perú, Americatel Perú, Impsat Perú, Convergia, Orange and Telmex Perú. TdP’s long-distance revenues have been steadily decreasing as well as its international long-distance market share.
In Peru, as proven elsewhere, even the poorest people are willing to pay for telecommunications services. Low-income markets have a business potential. The challenge for the regulator is to enable a wide range of possible service providers, business models, and technologies to address these markets, and for the operators to tailor their service offerings to the particular needs and means of low-income users.
Although much of Peru’s population is poor, living in urban areas without essential services or in scattered rural and remote areas, this does not detract from the benefits of adopting basically a market approach to delivering telecommunications services to them.
Peru’s Ministry of Transport and Communications (MTC) has published a proposed decree laying out the conditions for the implementation of mobile number portability (MNP). Three stages for implementation are stipulated. The first will see the drawing up of technical guidelines to implement MNP infrastructure. This phase will start when the decree comes into force and is due for completion by 30 June 2008. The second phase, in which MTC will determine other requirements for operators, is due to start on 1 July 2008 and run until the end of the year. The final stage involves technical tests, to be carried out from 1 January 2009 to 30 September 2009.
Telecommunications
Peru is a leader in telecommunications deregulation and privatisation in South America, having closely followed the example of Chile. Most regulatory authorities in the region are now following their example, so solutions that are successful in Peru often find ready markets in the rest of South America.
All barriers to foreign investment in the sector have been dropped and Peru offers unrestricted access for foreign companies regardless of size of holdings, and with full national treatment.
Licensed telecom providers are free to compete without restrictions as to type or volume of service provided, provided there is legal separation between the local and long distance service providers.
Mobile phones
Several indicators show that the mobile phone market is the most dynamic sector of the telecommunications industry in the country, thanks to the favourable economic conditions, the increased access to technological advances and an appropriate regulatory framework among other reasons.
In June 2007 the number of lines in service reached around 12 million lines, which represents a growth of 23 per cent and 79 per cent over the 2007 first quarter and the 2006 second quarter respectively.
Internet
Although only 21 per cent of Peruvian households have personal computers (most of these are the wealthiest households in Lima), use of the Internet in Peru is raising quickly, both in business and by consumers. Most consumers access the Internet at cyber cabins and cafés, which are now common in almost every city and town.
Internet connections are not as expensive as they used to be and flat-rate fees for unlimited-access telephone service are becoming more common, and cheaper.
Opportunities
Fixed and mobile telephone voice services account for the vast majority of the sector, but the Internet, high-speed data services for corporate clients and new value-added telephone services are rapidly gaining importance.
Voice over Internet Protocol (VoIP) and Wireless Local Loop (WLL) top the list of new technologies attracting the most interest in the Peruvian IT sector. Firewalls, security features, data transmission equipment and solutions offering improved efficiencies and cost savings are in greatest demand.
Solutions that offer the mobile service providers better controls costs, and attract and retain clients are in great demand.
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