Peru’s telecoms industry: A silver lining in a downward economy

Peru’s telecoms industry has been growing at 5-6% during the crisis, fueled by growing connectivity needs in quarantine and by carriers expanding the network.

“The telecom industry is very strong and very important in Peru and has been growing even now during a pandemic,” the general director for policies and communications regulation at the transport and communications ministry (MTC), José Aguilar, said.

This sector performance contrasts with a 40% drop in the wider economy in April and a 12.5% GDP decline the central bank forecast for this year – the worst result in over a century.

Aguilar, who was participating in the Futurecom Digital Summit on Tuesday, said data and voice traffic increased in May by 20% and 25%, respectively, over February, which was the last pre-pandemic month.

"Networks supported the stress, but we need to keep advancing in telecom infrastructure."

Peruvian operators have invested close to US$1bn annually over the last years. Since the privatizations of 1994, industry investments reached US$22bn.

However, mobile and fixed networks are still available in only 44% of the territory, according to Aguilar.

That means especially the mountainous and jungle regions are offline.

FIBER BACKBONE

One bet to tackle this digital divide is the Dorsal Optical Network (RDNFO).

Peru’s fiber infrastructure network comprises 13,000km of backbone, plus 30,000km of regional stretches, in addition to around 70,000km of networks by private operators.

Aguilar said RNDFO is "progressing well" this year, with four regional projects in operation. 

Before the pandemic, however, the government planned to get 21 of RDNFO's regional stretches activated this year.

REGULATION FLEXIBILIZATION

Peru is also carrying out a series of red-tape simplifications.

The country made the first temporary allocation of spectrum just a few days ago, Aguilar said, assigning 20MHz in the 2.5GHz band.

The temporary use was enabled after a set of flexibilities approved in May and is allowed for six months, extendable for another six, subject to certain coverage commitments.

Also in May, authorities streamlined the deployment of infrastructure and passed a fast-track rule for municipal antennas licensing, reducing the documents necessary to request a permit.

On planned spectrum auctions, Aguilar said Peru is not prioritizing revenue collection but coverage expansion.

Of the bands soon to be awarded, the government values 60MHz of spectrum in the AWS-3 band at US$214mn and 30MHz in the 2.3GHz band at US$77.2mn. 

In exchange for the allocation of spectrum, companies that won the tender will have to take fixed and mobile internet services to 5,641 locations by 2022.

According to Aguilar, investment commitments will be US$104mn and US$44.8mn, respectively, for the two bands on sale.

The tender is being developed by investment promotion agency ProInversión but no date has been confirmed yet.

INTERNET PARA TODOS

At the webcast, Aguilar said two new operators expressed interest in joining the neutral network for the Internet para Todos (Internet for All) program.

The goal is that “all operators, not only those who deployed a network, made use of it,” he said. “This is the perfect synergy between Internet for All, operators and OpenRAN (radio access network).”

Internet para Todos (IpT) is owned by Telefónica, Facebook, IDB Invest and CAF and aims to provide internet connectivity to 6mn users in remote regions.

Last year, the program enabled the deployment of 1,000 4G antennas, Aguilar said.

Recently, Parallel Wireless said it deployed hundreds of programmable virtualized 4G OpenRAN sites to deliver mobile broadband through Internet para Todos.