Peru - Telecoms, Mobile and Broadband - Statistics and Analyses
Payment delays due to the pandemic putting Peru's telcos under pressure
While Peru has been proactive against the pandemic, the economic cost has been high. The country's GDP declined by 40% in April 2020 due to lockdown measures and the state of emergency has had an economic impact on the telecommunications sector through the significant increase in delinquency in payment of services, affecting operators' sustainability and continuity.
According to August indicators, GDP growth continues on a downward trend, far from the levels of 2019. The unemployment situation and the fall in household income are reflected in high levels of non-payment for telecommunication services. However, despite widespread non-payment, the demand for telecommunication services has increased significantly during quarantine, with some operators witnessing a 60% increase in data traffic since lockdown.
Peru's fixed-line teledensity remains among the lowest in South America, with obstacles to fixed-line growth including widespread poverty, fixed-to-mobile substitution, expensive telephone services, and geographical inaccessibility in the rugged Andean mountains and lowland Amazon jungles. The government is addressing these shortcomings via ambitious investment plans to deploy telecom infrastructure and services in underserved areas. Most of the work was complete by the end of 2017, when eight regional fibre-based networks were connected to the National Fibre-Optic Backbone.
Broadband penetration in Peru is considerably lower than the Latin American average, despite government efforts to encourage the development of the sector.
Mobile penetration is on a par with the regional average, though high penetration is attributed to the popular use (especially among urban dwellers) of multiple mobile subscriptions. This phenomenon is becoming less pronounced as network operators respond to market competition by providing generous data and voice bundles (so obviating the need for SIM cards from different networks) and as the regulator endeavours to remove illegal devices and unregistered SIM cards from the market.
Telefónica Perú (trading as Movistar Perú) is the leading player in the mobile market, followed by Claro Perú, Entel Perú and Viettel (trading as Bitel). The market still has considerable potential to expand, especially given the country's low fixed broadband penetration which has encouraged the uptake of mobile data services. By late 2020, the mobile broadband penetration rate reached 69% of the population.
This report provides an overview of Peru's telecom infrastructure, together with profiles of the major fixed-line operators and a wide range of relevant statistics and analyses. The report also reviews the mobile market, including data on the key operators and their strategies in a highly competitive environment in addition the report covers the fixed and fixed-wireless broadband segments, including subscriber forecasts.
BuddeComm notes that the outbreak of the Coronavirus is having a significant impact on production and supply chains globally. During the coming year the telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G may be postponed or slowed down in some countries.
On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.
Although it is challenging to predict and interpret the long-term impacts of the crisis as it develops, these have been acknowledged in the industry forecasts contained in this report.
The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.
Osiptel prohibits telcos from terminating services for non-payment to guarantee service continuity during pandemic;
MTC grants temporary spectrum concessions to operators;
Government facilitates virtual learning during the lockdown by purchasing 840,000 tablets with internet connectivity to be distributed to low-income students lacking internet access internet;
MTC amends 2012 law on the promotion of broadband services, which also set out the guidelines for the construction and management of the RDNFO;
Azteca Communications, operating the RDFNO, proposes terminating the RDNFO concession;
Committee on Transport and Communications submits bill to guarantee customers' internet access speeds are at least 90% of the contracted rate;
Microlink announces partnership to deliver LoRaWAN networks across Colombia and Peru;
MTC asserts that 18 of 21 regional fibre optic projects will be operational by end-2021;
IHS Holding acquires telecom infrastructure provider Cell Site Solutions CSS;
Alphabet subsidiary Loon signs deal with Telefónica to provide wireless internet connectivity to remote areas;
Report update includes the regulator's market data to June 2020, telcos' financial and operating data to Q3 2020, assessment of the global impact of Covid-19 on the telecoms sector, recent market developments.
Companies mentioned in this report:
Telefónica del Perú (Movistar), América Móvil Perú (Claro Perú), Entel Perú, Americatel Perú, Terra Perú, EMax, Olo del Perú (Olo), VelaTel/Perusat, Star Global Com, Best Cable Peru, DirecTV, Entel Perú, Viettel Peru (Bitel), Virgin Mobile, Gamacon, IDT, Convergia, Gilat To Home Perú, Rural Telecom, Valtron
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