Spotlight: Telcos' H1 investments in Peru

Investments by Peru's main telcos grew 18.3% year-on-year in January to June to 1.20bn soles (US$319mn).

The figures released by regulator Osiptel include investments by Telefónica, Claro, Entel, Viettel, DirecTV and Americatel.

The investment-to-income ratio increased from 10.9% to 13% in the same period.

According to the report, telecommunications revenues grew 2.8% annually, driven by 4.5% growth in mobile services, 2.5% in fixed internet and 10.3% in data transmission.

Total revenue was 9.63bn soles and 7.97bn soles excluding equipment sales and rentals.

BNamericas reviews operators' investments.

CLARO

Despite having reduced its investments by 4.9%, América Móvil's subsidiary represented 37.2% of the investments with 446mn soles during the first half of the year.

Claro was also the operator with the highest revenues, with a 34.2% share.

In addition, it was the leading mobile operator with 12.6mn lines (a 30.1% share) at the end of the first half of the year. In fiber optic broadband it occupied fourth position with a 12.6% share.

Claro posted a net profit of 262mn soles in H1.

ENTEL

Chilean operator Entel invested 351mn soles in Peru in the first half of 2024, 26.9% more than a year earlier.

In April, the company announced a 10% increase in investments to boost coverage and capacity of its networks.

The company plans to invest US$131mn in the mobile business and US$16mn in the home segment during 2024. "We want to grow market share to reach and exceed 30% in three or four years," its CEO Antonio Büchi said at the time.

Entel had 22.3% of the mobile market and a minimal share in the fixed market as of June 2024.

With the approval of the operation to create a new neutral fiber network owned by KKR, Telefónica and Entel, the company intends to increase its participation in the fixed market.

The new company, On Net Fibra Perú, has approximately 2mn homes served.

Entel's share of the sector's revenues was 18.5% in H1.

It recorded losses of 45.5mn soles in Peru in the six months, which it attributed mainly to foreign exchange issues.

TELEFÓNICA 

Despite a 2.7% year-on-year drop, Telefónica remained in third place in investments with 189mn soles, 2mn above Viettel in fourth.

The Spanish company, which has invested US$7.8bn in Peru over 30 years, accounted for 15.8% of H1 investments in the sector.

Currently, the company is focused on deploying fiber optics and offering digital services, although with the formation of On Net Fibra Perú, part of the fiber optic disbursements will be covered by the new investment vehicle.

The company leads the fiber broadband segment with a market share of 31.2% as of June 2024.

In mobile telephony, it ranked second with 11.9mn lines (28.3%).

Telefónica accounted for 31.6% of telecom revenues in Peru in H1, second only to Claro. However, in the first half of the year the company posted a net loss of 580mn soles.

VIETTEL

Vietnamese operator Viettel invested 187mn soles and accounted for a 15.6% share of the total H1 investments after having recorded 379% annual growth.

The increase in investment is related to commitments linked to the acquisition of radio spectrum concessions in the AWS-3 and 2.3GHz bands in October 2023.

The investments were mainly allocated to the acquisition of telecommunications materials and equipment.

In October 2023, Viettel committed to spending US$600mn to connect 3,825 rural locations. In the first year of the contract, the operator intended to cover 86% of the locations.

Viettel, which operates under the Bitel brand, is the fourth largest mobile operator with 7.89mn lines for an 18.8% share as of end-H1. In the fiber optic market, the operator had a share of just 1.1%.

The telco accounted for 8.4% of the sector's revenue.

In the first six months of the year, Viettel posted net profits of 60mn soles.

OTHER OPERATORS

Pay TV operator DirecTV reduced its investments by 8.6% to 22mn soles in H1. Meanwhile, Americatel disbursed 68.4% less than in the first half of 2023 at 3mn soles.

On Net Fibra, meanwhile, announced last year an additional investment commitment of US$200mn to more than double the ultra-fast fiber network from more than 2mn homes to 5.2mn in 86 provinces by the end of 2026.

The operation was authorized by the competition authority last month.