Peru launches call to revamp its national fiber backbone

Peruvian investment promotion agency ProInversión launched a call to revamp the country's fiber backbone RDNFO, as well as the associated regional fiber and data transport networks that connect the country.

The goal is to select a private partner to carry out a broad study on the situation of these networks, their project design flaws, and the potential scenarios for their operation and expansion.

According to ProInversión, the study must contain "the diagnosis, situational status and scenario approach for the development of the projects."

Specifically, the government is focused on the operation and maintenance of RDNFO, and the operation and maintenance of the transport systems of the regional networks, which span several provincial capitals.

More details on the contracting requirements can be found here. The deadline for the submission of expressions of interest is July 31.

Queries or suggestions can also be emailed to Aldo Laderas, ProInversión's project director, using aladeras@proinversion.gob.pe.

RDNFO

RDNFO’s main objective is to provide a wholesale, neutral basis service. Its main clients are meant to be telecom operators that require this network to provide services to end-users.

Mexican firm Azteca won a 20-year concession in 2013, in what was considered the first public-private partnership (PPP) in the Peruvian telecom sector, with US$333mn due to be made in joint investments.

Completed in September 2016, RDNFO connects 22 regional and 180 provincial capitals, spanning 13,500km. The concession-holder was expected to sell capacity directly to local public institutions and private telcos.

However, the project has failed to deliver the expected results, mostly due to excessive pricing, which has led private operators to build their own infrastructure, leaving the State with an underutilized network.

Among other problems, the fee for capacity was deemed too high, making it difficult for Azteca to attract clients interested in using the wholesale infrastructure.

The contract with Azteca was eventually terminated and RDNFO has been operated by the State under national telecoms program Pronatel since January 2022. Furthermore, two previous tender processes for the selection of a private partner failed.

Now, Peru starts from scratch with the search for a consultancy to map out problems with the project. Only after that process will a new potential private partner be sought.

The country wants at least five proposals and alternative solutions to put RDNFO back on its feet, each one with its respective analyses of the technical, economic-financial and legal aspects involved.

The aspects to be considered must cover services, operators, rates, sustainability and the legal framework.

Regional networks

To date, in addition to RDNFO, Peru has 11 data transportation networks in provisional operation, run by the respective operators, corresponding to the regions of Huancavelica, Ayacucho, Apurímac, Lambayeque, Cusco, Lima, Moquegua, Tacna, Ica, Junín and Puno.

After the provisional period ends, the networks will be delivered to the State.

Likewise, Peru lists seven transportation networks in implementation, corresponding to the regions of Amazonas, Huánuco, Pasco, San Martín, Arequipa, Ancash and La Libertad, which will then enter the provisional operation stage by the operators and be eventually delivered to the State.

Three others in the regions of Cajamarca, Piura and Tumbes underwent an arbitration process, and “as a result, to date, efforts are being made to close these projects,” ProInversión said in a statement.