Market Report, "Peru (country regulation overview)", published

June 12, 2010 - PRLog -- Liberalization of the telecoms market in Peru began in 1991 with the passing of the Telecommunications Law and was completed in 1999, when the local and long-distance voice telephony markets were opened to competition.
One of the first stages of market liberalization was the merger of the two major telecommunications companies, Entel and Compania Peruana de Telefonos (CPT), into a monopoly operator, Telefonica del Peru, in 1995. This company was allowed to retain its monopoly until July 1999, in return for commitments to invest in network infrastructure.
Since 1999, other operators have been allowed to offer competing services in local, long-distance, and international telephony.
As of December 2009, fixed-line penetration in Peru was 10.5%, totaling 2.96 million fixed lines in service in the country. The incumbent, Telefonica, is still dominant with a market share of 73.5% in December 2009.
Mobile telephony services have been available in Peru since April 1990 when Tele 2000 started operations. Although the government has auctioned mobile licenses to six different operators, due to mergers there are only three mobile operators: America Movil, Telefonica Moviles (operating under the brand name Movistar), and Nextel.
During 2005 the Peruvian mobile market saw significant changes. In March, a fourth mobile license was issued to Sercomtel, a unit of America Movil SA. In April, the Ministry of Transport and Communications (MTC) approved the merger of Telefonica Moviles and Comunicaciones Peru (formerly BellSouth Peru), and in August 2005, America Movil SA bought TIM Peru, the third and remaining operator in the market. Two years later (in 2007) the trunking operator, Nextel Peru, obtained its first mobile license.
As of December 2009, Peru had 87.5% mobile penetration with 24.7 million mobile subscribers - an 18.2% increase in comparison with December 2008. Prepaid subscriptions accounted for 89% of the contracts: approximately 22 million subscriptions at the end of 2009. According to Peruvian telecoms regulator Osiptel, Telefonica Moviles had 63.2% market share, followed by America Movil (33.5%) and Nextel (3.3%) in December 2009.
Internet services were first offered in Peru in 1991 by the Asociacion Red Cientifica Peruana (RCP). By 1999 the number of Internet service providers (ISPs) had increased dramatically, from one in 1991 to 300 in 1999. However, the number of ISPs in Peru decreased to 98 in 2003 after an acquisition period by Terra Networks (part of the Telefonica Group). RCP and Terra Networks are the main ISPs in Peru.
According to Osiptel there were 795,309 broadband subscribers as of December 2009, of which DSL technology access represented 95.4% of subscriptions.
The Ministry of Transport and Communication (MTC) is expected to publish a 'National Plan for Broadband Development' in May 2010.
The telecoms industry in Peru is regulated by the Organismo Supervisor de Inversion Privada en Telecomunicaciones (Osiptel), which was created in July 1993. Its creation had been authorized since 1991, after the approval of Decree 702 on 8 November 1991. The Telecommunications Law was published by Osiptel in the same year of its creation. Osiptel is an autonomous public organization, reporting directly to the prime minister's office. It is independent from - but works closely with - the Ministry of Transport and Communications (MTC).
Osiptel's mission is to regulate access to telecoms services on the basis of free and fair competition. Osiptel is charged with harnessing private investment for the development and modernization of telecoms services in Peru. It has several regulatory roles, including tariff setting, arbitrating in disputes, overseeing compliance with fair competition regulations and consumer protection. In addition, Osiptel manages Fondo de Inversion de Telecomunicaciones (FITEL), the universal service fund.
However, MTC is Peru's policymaker. Its main responsibilities are to issue licenses, define technical standards, allocate radio frequency, and manage spectrum. Note that the Agency for the Promotion of Private Investment (ProInversion) is responsible for encouraging both local and foreign private investment, in order to foster competitiveness and sustainable development in Peru. ProInversion was established by Law 27,332, approved on 29 July 2000.

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