What's next for Entel in Peru?

Chilean telco Entel is working to gain scale in Peru and secure long-term profitability in the country.

Its Ebitda margin grew from 13.2% in June 2023 to 27.1% in the same month of this year, according to the latest figures from regulator Osiptel.

Entel Perú CEO Alexis Licci said during the company’s recent Investors Day that “given the level of efficiency we already have, we're prepared to accelerate growth again.”

Entel is the second-largest mobile operator in Peru in terms of revenue share, but third in terms of mobile subscribers. The company has also a small share of the fixed broadband market.

Claro led with 12.6mn mobile lines (30.1% market share) in June, followed by Telefónica with 11.9mn lines (28.3%), Entel 9.36mn (22.3%) and Bitel 7.89mn (18.8%). 

Now, Entel is planning to invest in network improvements outside Lima and deployment of 5G, and also aims to grow its broadband business.

It is also planning to roll out more than 200 express stores by 2025, aiming for a higher market share while converting prepaid users to postpaid. The share in the postpaid market is around 20%.

According to Osiptel, Entel invested 351mn soles (US$92.5mn) 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 US$131mn in the mobile business and US$16mn in the home segment during 2024.

"Peru had very low investment rates, around 13%. We’re now bringing Peru’s investment to more typical industry levels,” CFO Manuel Bermúdez said during Investors Day. "We estimate it will grow to around 18% of revenue."

As an operator participating in the Internet para Todos program, Entel is also taking advantage of the coverage fee regime to expand its networks. The government initiative allows mobile companies to pay up to 60% of spectrum rights through investment commitments.

According to the transport and communications ministry, infrastructure was deployed for the first time in 425 rural locations this year under the coverage fee regime, 85% more than in 2023.

Fiber

With the approval of the operation to create a new neutral fiber network jointly owned by KKR, Telefónica and Entel, the company intends to increase its participation in the fixed market to 15-20% by 2028.

The new company, On Net Fibra Perú, has 2mn homes passed, with Entel targeting 5.2mn by 2026.