Peru: A mobile market set for growth - Prepaid MVNO

FEATURE REPORT
explained, the agency is working to
increase customer service quality.
That includes improving service and
reducing the time that carriers take to
attend to customer complaints as well
as improving the way the government
agency manages complaints.
Regarding the quality of mobile voice
and data services, Ruiz said that Osiptel
has set an agenda for regulations aimed
at improving wireless service quality by
setting rules for coverage and quality.
Osiptel is also reviewing regulatory procedures
and supervision.
Ruíz highlighted the need to promote
competition, noting that this issue is also
related to greater telecom service coverage
in the country.
“In Peru, the market is highly concentrated,
and for us, this is the main
thing that has prevented the country
from improving infrastructure and Internet
broadband in the countryside,”
Ruíz said.
Among Osiptel’s main projects is the
deployment of a fiber-optic backbone to
boost broadband connections and penetration.
The contract bid for selecting
a vendor to deploy and manage the fiber
optic backbone is being evaluated
by the MTC, and bidding is expected to
be held by mid-2013.
“This fiber-optic transport network of
14,000 kilometers, aims to reduce the
deficit of infrastructure. It will be a concession
contract with a private company
– a carriers’ carrier – that will operate
this network,” Ruíz explained.
Osiptel has been working since 2010 on
the national broadband plan. The agency’s
role is to oversee the implementation
and operation of the fiber-optic backbone,
ensuring competition takes place so that
equal access is provided.
In Peru, there are three governmental
agencies that regulate and influence
the telecom market. The MTC is responsible
for developing telecommunications
policy, granting contracts and managing
resources such as spectrum and numbering.
Osiptel regulates and monitors
the country’s public telecommunication
service market, and ProInversión is the
government body in charge of promoting
private sector investment in Peru.
“The government is investing to take
telecommunication services to the rural
areas and to universalize telecom services,”
Informa’s Passoni noted.
The fiber-optic project is important for
increasing capacity across the country.
Pyramid’s Tricarico said that in Peru it
can be very difficult to bring broadband
to certain areas.
In general, observers agreed that the
Peruvian government has been addressing
several of the most important telecommunications
issues, but they also
noted the lack of regulations or incentives
that could encourage more competition
and geographic expansion.
For example, Peru lacks MVNO regulations.
As noted by Ruíz, currently the
government is reviewing its telecommunications
law, which dates from 1988, to
improve competition rules, encouraging
new entrants and adding new options
such as MVNO providers.
Ruíz also highlighted that the beginning
of number portability has contributed
to a more competitive market. “Last
year, there were about 200,000 people
who switched operators and kept their
original mobile numbers,” he said.
Hot topics
Although dominated by Movistar and
Claro, Peru’s wireless market is recognized
for its potential. Observers are excited
to see the impact Viettel could have
and whether the entrance of the new carrier
means prices will fall.
IDC’s La Rosa said that the rise of the
middle class in Peru is contributing to
making the wireless market more attractive
for new telecom players. He added
that the expansion to uncovered areas
is another opportunity to be explored in
the country.
Pyramid’s Tricarico said that telecom
operators are putting effort into the
extension of 3G (using both HSPA and
HSPA+), deploying more antennas on
base stations to support faster speeds
and increasing population coverage.
“Looking at this, infrastructure is still
a key way to differentiate, since operators
are competing in infrastructure and
coverage layers, and they are not in the
stage of competing with services – when
they would be more open to sharing infrastructure,”
Tricarico explained.
In addition, the migration from 2G to
3G technologies represents a big opportunity,
as data services begin to increase.
“There will be an evolution of mobile data
services, with big growth in the HSPA+
space,” noted Tricarico. “There are a lot of
opportunities for operators to grow. They
are focusing on HSPA+, and there will be
strong growth in that area because LTE
might take a year or more to happen, and
they have to raise data consumption.”
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