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Peru Telecommunications Report Q2 2010
Market |
Telecommunications |
Report Type |
Market Research |
Country |
Peru |
Published |
26 February 2010 |
Number of Pages |
72 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
Peru fell below Colombia and Venezuela in our latest Business Environment Rankings, a sharp decline for the market which had showed strong growth for several quarters. While Peru’s mobile market retains strong growth potential, the market’s slowdown has been sharp, affecting the forecast growth rate.
In part this is due to the economic downturn which has hit Peru on the back of the global financial crisis, but the market also faces challenges in persuading new subscribers to sign up as these are increasingly from rural areas. Most towns and cities already have high penetration rates leaving the remaining growth to come from more rural regions.
The mobile market was set to see a new operator and, at the time of going to print, the process to auction spectrum for a new operator had been restarted. We welcome the prospect of a new operator to bring further competition into the market and reinvigorate growth. With only two main operators in Peru, a third national player could provide the boost needed by the market and may even bring Peru back into the top half of our Business Environment Ratings.
Slow growth is not the only issue with operators reporting continual decreases in ARPUs. This does not bode well for future revenues for the operators, as none have successfully reported growth for around two years. The reasonable interest in mobile data services should help to further increase the operators’ ARPUs as spending increases. However, with much of the market’s remaining growth expected to come from rural areas the prospects for boosting ARPUs significantly are limited.
Meanwhile fixed-line operations continue to report robust growth, with competition to incumbent Telefónica del Perú (TdP) intensifying and bringing down its market share. Surprisingly, it has been mobile operator Claro, whose fixed-wireless operations launched in Q209, that has been one of the main drivers of the market’s continued growth. We do not forecast a decline for the Peruvian fixed-line market over the next five years but a sharp slowdown is already taking place. Alternative technologies such as fixed-wireless will be key to continuing the market’s growth as traditional wireline services decline. To some extent the demand for broadband will also boost fixed-line connections but, in the long run, the broadband market will far outreach demand for fixed lines.
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