Movistar Peru Allocated Block A Spectrum
News: Spanish mobile operator Movistar's Peruvian subsidiary has been allocated the Block A spectrum in the 1700MHz/2100MHz range that it won through an auction in July 2013, reports TeleGeography. Under the terms of the concession, Movistar Peru will have to roll out services within one year and its network must cover 114 district capitals within the first two years. The company had previously pledged to launch LTE services to 234 district capitals and main towns.
BMI View: Peru has historically underperformed its regional neighbours, however, we believe there are foundations for outperformance through 2013 and 2014. A number of new players into the market, a high level of postpaid growth, as well as legislation from the regulator, Osiptel, has led to an improved outlook for the industry. Mobile subscriptions are growing steadily, but penetration rates are still only around 100%, leaving plenty of room for growth. Meanwhile, in terms of broadband, the government has plans to expand Peru's fibre-optic network in a move to connect around 179 towns and cities that currently do not have high-speed internet connections. This should generate additional demand for wireline internet services, and will facilitate the provision of other services, such as internet TV. However, the market is not without its challenges for operators. Purchasing power is low, and ARPUs are mute as a result, and in terms of technology, it lags behind other Latin American countries.