Peru: 3G and New Nationwide Fiber Backbone to Boost Broadband Growth

Product Synopsis
Peru remains one of the most attractive markets in Latin America thanks to its stable macroeconomic environment and strong economic growth. The main opportunities will come from the nationwide fiber backbone plan, from the license renewal conditions imposed on Telefonica and from mobile operators increasing their capex to deploy new LTE networks. The upcoming LTE deployments will also introduce a new player, Americatel, to the fast-growing mobile data market in Peru.

Introduction and Landscape
Peru's telecom and pay-TV markets generated $4.5bn in service revenue in 2012 and will grow at a 5.9% CAGR between 2013 and 2018. Most of the revenue has come from the mobile sector, with voice services and mobile data adding a combined $3.1bn in 2012, equivalent to 55% of the total telecom and pay-TV market. With mobile penetration surpassing the 100% mark only in 2013, we expect mobile voice to remain the main source of revenue through 2018, although its share of the total communications market will decline from 45.1% in 2013 to 37.6% in 2018. Mobile data revenue, mainly thanks to the contribution of mobile broadband, will more than double in size, growing at an impressive 17% CAGR for 2013-2018. Starting from a low base, VoIP will see the second strongest CAGR, although it will remain a niche service until 2018. We expect fixed broadband revenue to expand over the forecast period at a 12% CAGR, one of the highest in Latin America, thanks to fiber investments by Telefonica and Claro, especially in the capital Lima and Callao, and to the government's plans to bring connectivity to remote and rural areas via a fiber-optic backbone.

Executive Summary
Market and Competitor Overview
Peru in a regional context
Economic, demographic and political context
Regulatory environment
Demand profile
Service evolution
Competitive landscape
Major market players
Segment analysis
Mobile services
Fixed services
Pay-TV
Identifying Opportunities