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Peru Telecommunications Report Q1 2012
Business Monitor International, Nov 2011, Pages: 81
Peru Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Peru's telecommunications industry.
The latest operator data available for our Peru Telecommunications Q112 report are from Q211 and show that the Peruvian telecoms market continues to expand rapidly. Mobile subscriber numbers grew strongly following a slowdown in Q111, with 820,000 net additions recorded, representing 3.4% q-o-q growth. While the Peruvian mobile market continues to grow quickly, ARPUs are starting to fall. Sprint suffered the largest drop in ARPUs in Q112, the result of launching prepaid services, which do not generate the same revenues as its traditional postpaid corporate offerings. However, the company looks set to expand its customer base quickly through these offerings, and provide a challenge to the dominance of América Móvil and Telefónica, which operate under the Claro and Movistar brands.
Although there is limited data for the fixed-line market, we believe fixed-line telephony continues its decline. The only data available on the fixed-line market comes from América Móvil and Telefónica, although Telefónica del Peru no longer reports results separately in Peruvian currency for fixed-line operations. This marks further consolidation of Telefónica’s operations in Peru.
Investment is also flowing into the country. With both America Móvil and Telefónica investing significant funds in the country in Q211, we believe the market will continue to grow. Additionally, China’s VelaTel launched GO Movil in Peru in Q311, providing WiMAX 4G broadband services throughout the country. The firm forecast 16,000 subscribers in the first year of operations, but the company looks set to exceed these operations. Mobile broadband is likely to be hugely successful in Peru, as fixed broadband is not suitable for Peruvian terrain, and a large proportion of the population still remains unconnected.
Despite this, the company came under fire in August over the renewal of licences. The regulator attempted to charge Movistar US$830mn to renew contracts in August 2011, but this was disputed by the operator. The final decision is yet to be made as of time of writing.
Current broadband offers from América Móvil and Telefónica are usually much more expensive than ubiquitous cabinas where the majority of Peruvians access the internet. However, this is likely to change with the entrance of GO Movil, which aims to match the cost of internet access – under PEN1 per hour.
The company has begun operations in seven regional centres, but has yet to enter the capital of Lima. This would be the most lucrative region for GO Movil, and we expect the company to launch services there soon. BMI believes the entrance of this player will lead to much greater competition and productivity in the Peruvian broadband sector.
Another low-cost Asian company will soon take on the Peruvian market. Viettel is set to enter the mobile market in mid-2012, following the signing of the concession contract in May 2011. The company is currently undertaking network development, and local media reports suggest Viettel is aiming for a May 2012 launch date. BMI welcomes the operator’s proposed target of low-income groups, due to significant room for expansion in these groups. While mobile penetration is 82.5%, BMI believes that in rural areas it is much less, while the urban area bolsters figures.
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