Telecommunications Broadband and Mobile

An Expert's View about Wireless Telecommunications in Peru

Last updated: 30 Jun 2011

 Summary
The telecommunications sector in Peru is seeing tremendous growth in broadband and cellular phone services. Growth is concentrated in the capital city of Lima area where 30% of Peru’s population resides. Penetration rates are unequal with Rural and other urban areas having much lower rates than Metropolitan Lima. These rural and smaller urban areas lack the necessary infrastructure for service, requiring further investment to attain the desired level of penetration. 

Peru is the third most expensive country to own a cellular phone in the world behind Brazil and Zimbabwe. Most service is through prepaid cards, but data rates and per?minute rates are high. Smartphones and data accessing is limited due to the high costs but the market is growing. Mobile banking as well as regulations regarding rates from the Private Telecommunications Inversion Regulatory Agency (Organismo Supervisor de Inversión Privada en Telecomunicaciones – OSIPTEL) will cause data usage to rise and the cost to the consumer to decline. Once the infrastructure for cellular service is put into place in provincial and remote areas, the cellular phone usage for that area will increase dramatically. Broadband internet usage and access is low overall, but is on the rise as well. 

Market Demand 
The telecommunications sector has grown around 20% each year for the last three years. Cellular and broadband services have seen 2000% growth over the past 10 years. 

In December of 2010, penetration for cellular lines was 390% for households and 98% for individuals. Due to higher demand in 2010, cellular phone sales increased by 29%. Metropolitan Lima’s overall penetration rate was 138%. It is approximated that there are 85 cellular phones for every 100 persons in the country with Lima, Trujillo and Arequipa having more than 1 unit per habitant. With more telecommunications infrastructure construction in rural areas of Peru, the use of mobile devices has increased dramatically in the last five years. Rural penetration grew 12.3% in 2009 when it was determined that 36% of rural populations have cellular phones, with 50.4% of households having at least one member with a cellular phone. In Ucayali, a rural district with 458,177 inhabitants in 2009, the amount of cellular devices increased from 33,000 to 340,000 from 2005 to 2010.

Broadband’s penetration rate in December 2009 was 11% for households and 2.7% for individuals. Overall penetration, however, is 3% per capita, but the rate is disproportionate throughout the country. Metropolitan Lima had 29% penetration while other urban areas had 11%. Penetration rates in rural areas were less substantial at 0.4%. Household internet access for the country is 14% and, as of 2010, 27% of the population were considered internet users. Between December of 2009 and December of 2010, the amount of internet connections increased by 14.1% to 951,220 connections. 

Market Statistics 
Cellular phones are available to 72% of Peruvians. Of those with cellular service, 87% use prepaid cards and only 3.5% of all users access data from their devices due to the high cost of data service. Around 250,000 smartphones were in the market by the end of 2010. Currently, smartphones represent 10% of the market, or around 500,000 devices. The representation of smartphones is expected to grow to between 12 and 13% by 2012, especially with the 15% reduction in price that is expected to occur by the end of 2011. 

In Peru, 37% of Lima’s population has access to at least one computer while 2.5% of the rural population has access. Internet cafes (cabinas de internet) provide 60% of Peruvian internet users with access while 9% use other facilities, such as work or school. Home connections provide 31% of active internet users with access. 

Fiber optic development has been limited to the coast and along highways due to geographic complications. Viettel Group, the fourth telecommunications carrier, has stated that it will invest US$ 250 million into the development of fiber optics.

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Posted: 30 June 2011, last updated 30 June 2011