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Broadband Development in Peru National Plan Proposal for Broadband Development in Peru. OSIPTEL’s Role and Learned Lessons. Luis Pacheco Research Deputy Manager Department of Regulatory Policy and Competition Telecommunications Regulatory Agency – OSIPTEL Seminar on Economic and Financial Aspects of Telecommunications – SG3RG-LAC - ITU San Salvador, February 2011 PERU . 2009 Population: 29,13 million . 2009 GPA: US$ 124,8 billion . 2009 per capita GPA: US$ 4 283 PERU GPA - 1990-2009 250 14 12 ) 200 10 8 Rate 150 6 4 100 2 Growth índex índex 1994=100 ( 0 GPA GPA 50 -2 GPA GPA -4 0 -6 1990 1991 1992 1995 1996 1997 1998 1999 2002 2003 2004 2005 2006 2009 1993 1994 2000 2001 2007 2008 PBI (índice 1994=100) Crecimiento del PBI Good macroeconomic performance in the last years: . Sustained economic growth: 6,2% annual average growth in 2003-2009. Last quarters growth: 6,2% (2010-I), 10,2% (2010-II) and 9,7% (2010-III). Controlled inflation: 0,25% (2009). Responsible and sound fiscal policy. Continuous improvement in country risk qualifications. Good stock indexes performance. Good trade balance performance, significant surplus. Active role of public investment, specially through infrastructure promotion. Source: Ministry of Economics and Finance – Multi-annual Macroeconomic Framework and Peruvian Central Bank Importance of Broadband for Economic and Social Development Broadband is an important economic keystone, allowing: • Enhance economic development. • Improve competitiveness and productivity levels. • Promote social inclusion. • Generate a basis for developing the Information Society: e- Government, Tele-Education, Tele-Health • Convergence and advanced services. • Support insertion into globalized economy. • Create jobs. Broadband’s Worldwide attention: Several countries have recognized broadband as a keystone for development. Some of them have made, or are preparing, national broadband plans. South Korea has been one of the first countries in which broadband was considered as a country goal, betting for several platforms deployment. USA has made a National Broadband Plan -which is being discussed- with very ambitious goals: achieving, at least, 100 million household connections, with a speed of 100 Mbps. Broadband Commission for Digital Development, ITU-UNESCO. Latin America Broadband Penetration Regional broadband leaders in penetration, are: • Chile (10,4%) • Argentina (10,0%) • Uruguay (10,0%) Penetración • Mexico (9,2%) Pais Banda Ancha (2009) Bolivia 0.96% Peru has a Ecuador 3.20% Peru 3.04% penetration of 3,0%. Venezuela 4.43% Colombia 4.82% Brasil 5.98% Mexico 9.20% Uruguay 9.97% Chile 10.39% Argentina 10.00% Source: Cisco Broadband Barometer, december 2009. Peruvian Telecommunications Evolution in Recent Years Strategy and Regulatory Vision in Recent Years OSIPTEL strategy has been focused in policies for promoting (in order of priority) : • Indirect competition: unattended areas, focusing policies on promoting competition for new users. • Direct competition: population that already has access to telecommunication services; target consumers are basically commercial and household users in high- density urban areas. • Appropriate convergence adoption. “Guidelines for Developing and Strengthen Competition and Growth of Telecommunication Services in Peru”, Ministry of Transport and Communications (MTC) - 2007. Strategic Plan 2007-2011 – OSIPTEL. Relevant Policies in Recent Years (1/2) Policies implemented in recent years have led to significant communications growth, accomplishing significant achievements in services such as mobile telephony. Besides, it has stimulated the establishment of a healthy environment for the future development of broadband in Peru. Some measures driven by OSIPTEL: • Substantial and gradual reduction in termination charges on mobile networks in 2005, and recently, in such regulation review, in 2010. • Regulation of wholesale bitstream access to broadband DSL , revised in 2008. • Price cap regulation for leased long distance lines (E1). Relevant Policies in Recent Years (2/2) • Establishment of the formula for fixing the payment for access and sharing of public use infrastructure (poles). • Establishment, in the Quality Service Regulation, that Internet access providers may not discriminate traffic according to the type of service. Some measures that were driven together by OSIPTEL and the Ministry are: • Gradual reduction of tariffs on imports of telecommunications equipment, achieving its elimination in 2007. • Changing the payment structure of the radio spectrum usage, removing an artificial barrier that affected the growth of the service. • Coordination with regional and municipal governments. Working with international consultants (2009) Optimal Regulatory and Competition Policies Design in a Telecommunications Convergence Scenario Developed with Analysys Mason. Analyzes the challenges and implications of convergent technologies and services, from the standpoint of technology, utility regulation and competition promotion. Next Generation Networks Interconnection Developed with WIK Consult GmbH. Analyzes interconnection schemes in convergent IP networks and how this concept can be incorporated in Peruvian legal framework. Cost Models for Access Network Deployment Developed with Detecon International GmbH. Develops cost models that allow evaluating expansion policies, competition, price regulation and establishment of differentiated charges, taking into account the latest access technologies. Fixed Telephony Evolution 2.97 2.92 3.00 2.88 12.00 2.68 10.50 10.31 2.50 2.40 10.00 10.29 2.25 9.64 8.73 persons 100each per Lines 2.05 2.00 8.25 8.00 1.84 7.33 1.62 1.66 1.57 6.72 1.50 6.15 6.00 6.19 5.92 Millions of linesin of service Millions 1.00 4.00 0.50 2.00 0.00 0.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Jun-10 Lineas en servicio penetracion en telefonía fija Source: Network operators. Elaboration: OSIPTEL Mobile Telephony Evolution 28.08 100.0 28.00 98.71 26.00 24.70 90.0 24.00 87.5 80.0 22.00 20.95 20.00 74.9 70.0 Penetration rate (%) rate Penetration 18.00 60.0 16.00 15.42 55.6 50.0 14.00 12.00 40.0 10.00 8.77 Millions of linesin of service Millions 30.0 8.00 31.92 5.58 6.00 20.0 4.09 20.5 4.00 2.93 2.31 14.7 10.0 1.34 1.79 2.00 10.7 5.1 6.8 8.6 0.00 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 sept..10 Lineas en Servicio Tasa de Penetración Source: Network operators. Elaboration: OSIPTEL Mobile Telephony Coverage 1'800 1'555 1'584 1'600 1'522 1'480 1'497 1'444 1'459 1'469 1'411 1'400 1'329 1'254 1'152 1'200 1'096 1'013 975 1'000 864 Growth rate: 7.03% Penetration: 86.4% of Districtsof 800 Nº 557 600 448 400 200 0 mars.06 juin.06 sept..06déc..06mars.07 juin.07 sept..07déc..07mars.08 juin.08 sept..08déc..08mars.09 juin.09 sept..09déc..09mars.10 juin.10 Total Source: Network operators. Elaboration: OSIPTEL Mobile Telephony and 3G Coverage Source: Network operators. Elaboration: OSIPTEL Fixed Broadband evolution 874 831 757 732 659 509 379 310 244 Thousands of subscriptionsThousands Elaborated by GPRC- OSIPTEL • In june 2010, there were 874 thousand Fixed broadband connections, which corresponds to a country‟s teledensity of 3.1%. •Telefónica del Perú (ADSL) serves 92.6% of the Internet market, and Telmex 5.9% (cable HFC and WiMAX). Fixed Telephony and Fixed Broadband coverage (Telefónica del Perú) Fixed Telephony Fixed Broadband Coverage. Coverage December - 2009 December - 2009 Source: Telefónica del Perú Elaborated by OSIPTEL. Pay TV Evolution 1100 Rate Penetration. Jun-2010: 3.6% 1'022 1000 944 960 900 843 859 813 800 737 691 700 583 599 600 523 500 400 300 200 100 0 05-I 05-II 06-I 06-II 07-I 07-II 08-I 08-II 09-I 09-II 10-I Source: Empresas Operadoras MilesThousands de suscripciones of subscriptionsen servicio Elaborated by OSIPTEL. Market Share (Jun-2010) Mobile Telephony Fixed Telephony Fixed Broadband Pay TV Source: Empresas Operadoras. Elaborated by OSIPTEL Broadband: National Policy Multisector Commission responsible for working up National Broadband Plan Through Supreme Resolution Nº 063-2010-PCM released on march 04th , 2010, the “Temporal Multi-sectorial Commission” was set up to elaborate the “National Plan to develop Broadband in Peru”, which is comprised by: • The Deputy Minister of Communications, who presides it; • The General Director of Regulatory and International Affairs in Telecommunications • One regular member and one alternate member from OSIPTEL; • One regular member and one alternate member from INICTEL. Through Supreme Resolution Nº 261-2010-PCM released on September 24th, 2010, the deadline was extended and new members were incorporated: • National Bureau of Electronic Government and Informatics (ONGEI), and • Association for National Infrastructure Promotion (AFIN). Road map- Multisectoral Commission Mult March 2010: Creation of the Commission to prepare the - National Plan for the development of broadband.. isectorla l participation l Working meetings with stakeholders: Operators, Suppliers, Consultants, Universities, Civil Society, Users Associations, etc. Report 1: Diagnosis. Report 2: Barriers. Report 3: Guidelines, strategies and actions. Workshops. Publication of reports for comments August 2010: Publication of drafts. Currently the Commission is in its second stage of work, which will end in March 2011. Diagnostic Broadband: International Comparison Broadband comparison between developed countries and developing countries Elaborated by GPRC-OSIPTEL Source: ICT Stadistics Database ITU 2009 Broadband Penetration in Latin America Broadband Penetration vs GDP per capita (USD) Elaborated by GPRC-OSIPTEL Source: Barómetro de Cisco de Banda Ancha (Dic 2009) Source: ICT Statistics Database ITU-2009. World Economic Outlook Database, FMI Transport: Limited deployment of Fiber backbone… Current state Fiber-optic deployed (Km) Company Length(Km) Telefónica del Perú 4,008 Telmex Perú/ América Móvil 3,225 ISA Internexa (Colombia) 1,293 Global Crossing 252 Americatel Perú 92 Optical IP 63 TOTAL 8,933 High concentration in Cost Region. Limited coverage of fiber networks in Mountain Region.
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