Information Technology Landscape
Peru
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National IT Analysis
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Telecommunication Infrastructure
Telecommunication Regulation and Liberalization
In 1994, the Peruvian government convoked a bid for the privatization of the only two telecommunication companies in Peru: Compañía Peruana de Teléfonos (CPT) and Empresa Nacional de Telecomunicaciones (Entel). Having successfully restructured the telephone systems of Argentina, Chile, and Venezuela, Telefónica de España acquired both CPT and Entel for $2,002 million--the Peruvian government had set a total base price of $525 million--giving place to Telefónica del Perú. [32]
Telefónica saw a great business opportunity in Peru. The number of phone lines was very low (2.7 lines per 100 people) compared to the average number of phone lines in Latin America (12 lines per 100 people) [33], which translated into a need for expansion of the telecommunication system in Peru.
Along with a 20-year lease of the local and long distance phone service in Peru, Telefónica acquired exclusive rights for 5 years, which meant that Telefónica would hold a monopoly on the land line phone service until 1999. However, the mobile phone service and the toll phone service were provided under the rules of free market competition--Cellular 2000 was Telefónica's competitor in these categories of phone services. Also, Telefónica acquired licenses to operate, without exclusivity, cable TV and paging services. [34]
Between 1993 and 2001, the number of installed land lines tripled, the waiting time for the line installation decreased from 540 to 15 days, the total length of fiber optics increased from 200 to 8,173 km, and the number of locations with phone service increased from 1,450 to 3,246. [35]
Currently, the telecommunication industry in Peru is a free market competition. Although Telefónica is present in almost all the categories of service, there also are many more service providers (see Telecommunication Infrastructure). As a matter of fact, Telefónica has decreased its net profits in 30% from 2002 to 2003. It also asserts that the 2003 fourth-quarter loss was "due to greater competition on long distance, public telephone and rural calls and a move to make its billing plans more affordable." [36]
Last update: March 2, 2004 by Dario Canal
