In this Issue: Overseas Business Insights Peru - Telecom Snapshot ............................. 1 Panama - Craft Beer Market ........................ 1 Brazil - Health Care Law ............................ 2 March 2015 Canada - Electricity Trading ....................... 3 U.S. Department of State Guatemala - Ethanol ................................... 4 Bureau of Western Hemisphere Affairs Resource Links............................................ 5 Peru’s Telecom Sector: A Snapshot When the Fujimori administra- Peruvians use pre-paid mobile mobile penetration. Since tionSystem privatized Peru’s two state cards, and only 21% of mobile these changes, over 200,000 -owned telephone companies phones are smart phones. The Peruvian consumers have in 1994, just three percent of overall mobile phone penetra- switched providers. Bitel aims Peruvians had telephones. tion rate is 96% (32 million to capture 1% of the market by Peru’s telecommunications accounts), with 2G services 2017 by focusing on lower-end sector has grown significantly accounting for 91% and 3G users. Entel plans to expand since privatization, with state- four percent. Movistar and its operations with corporate owned companies Compañía Claro have the largest shares of and higher-end market seg- Peruana de Teléfonos, S.A. the mobile market at 51.5% ments (it is not connected to (which operated in Lima) and (20.8 million accounts) and the earlier Peruvian state- Entel Perú (which operated cations Supervisory Agency, 43.2% (11.9 million) respec- owned company). Additional- outside of Lima) sold to Span- regulates and monitors the tively. Entel is third at 5.3% ly, two more companies— ish company Telefónica (doing country’s public telecommuni- (1.3 million accounts), entering Virgin Mobile (U.S.) and Móvil business as (d/b/a) Movistar). cation services market. ProIn- the market with the purchase Falabella (Chile)—have an- The 1998 Telecommunications versión, the government’s pri- of Nextel Peru in August 2014. nounced plans to enter the Law further liberalized compe- vate investment agency, is re- Spain’s Telefónica owns both market in 2015. sponsible for promoting pri- tition under a single concession upscale Movistar and more Although mobile penetration and license process for tele- vate sector investment. Invest- affordable and social network- ment in telecommunications has increased significantly, communication services, in- ing-focused Tuenti. Peru still lags behind its neigh- cluding fixed-line, mobile/ reached $1.5 billion in 2013, a 30% increase over 2012. In July 2014, OSIPTEL intro- bors. For instance, the average cellular, pay television, and duced number portability— revenue per user (ARPU) for internet. Mobile Sector which allows consumers to mobile phones in Peru is The Ministry of Transporta- There are currently five active keep their mobile phone num- $9.00—below Latin America’s tion and Communication mobile service providers: Mo- ber despite changing service average ARPU of $9.67. By (MTC) is responsible for devel- vistar (Spain), Claro (Mexico), providers—and cut intercon- comparison, Chile’s ARPU is oping telecommunications Entel (Chile), Viettel Mobile d/ nection fees by 68% to spur $13.70, Mexico’s $12.20, and policy; granting contracts; and b/a Bitel (Vietnam), and Tuen- competition and facilitate new Colombia’s $9.93. The gov- managing resources, such as ti (Spain) (with the last three entrants into the market. ernment plans to increase Pe- spectrum and numbering. entering the market in late OSIPTEL also lowered costs OSIPTEL, the Telecommuni- 2014). Seventy-six percent of for rural operators to facilitate (continued on page 4) Craft Beer Brewing in Panama Large national breweries pro- Bruja started to gain ground Panama’s strong economic American culture have all contrib- ducing light lagers have long within the last decade, chang- performance, with the highest uted to the rise of craft beer indus- dominated Panama’s $390 mil- ing palates and introducing GDP growth rate in the region, try in Panama. lion beer market. Gastro pubs new flavors. Casa Bruja uses a vibrant logistics, shipping, On February 27 and 28 throngs of and independent brewers such local ingredients to create and financial sector, a growing Panamanians gathered for the third as La Rana Dorada and Casa uniquely Panamanian beers. middle class, and an affinity for annual “Micro Brew Fest”, featur- Page 2 Panama Beer (continued) are lagers low in alcohol content, highly “Panama ranks 12th in the -ing artisanal beers from many countries, to carbonated, and usually consumed very world in per capita beer sip craft beers and line up for burgers from cold. These characteristics mean that Pana- consumption ” a food truck, while classic rock blasted in manian beers can be consumed in high the background. The event boasted 93 quantities on a hot day with minimal dam- and Sea Dog Brewing Company from New artisanal brews from a range of countries, age to one’s pocketbook, or liver. Hampshire. Other American craft brewers are looking for distributors in Panama. including American craft beer brews from Four major brands owned by two brewer- Lost Coast, Mission Brewery, Ballast Point, ies dominate Panama's $390-million-a-year One of the owners of a micro-brew pub Founders, Anderson Valley, Shipyard, beer market: Heineken Interna- said the landscape for artisanal beers has Rogue, and ACE Cider. Both days of tional’s Cervecerías Barú Pana- changed dramatically since 2005, when the festival were sold out. A pre- má, owner of the Panama and locally produced craft beer was a rarity. La dominantly young and upper-middle Soberana brands, and SABMil- Rana Dorada opened in 2010and already class crowd filled the open-air patio ler’s Cervecería Nacional, which has two locations and brews four beers on where the event took place. owns the Balboa and Atlas site: a pale ale, a pilsner, a blonde ale, and a Panama ranks 12th in the world in per brands. Fermenting beneath the porter. Cervecería Legítima, which made capita beer consumption at 21.7 gal- surface is a growing market for its second consecutive Micro Brew Fest lons, or roughly 232 bottles of beer a craft beers. In an interview with showing, plans to open a brewpub in 2015. year per person. This level of con- a local publication, Cervecería One of the largest craft brewers is Casa sumption might be due to the year- Nacional’s master brewer noted, Bruja, which has its own bottling facility round hot, humid weather, or to the fact “A growing number of consumers are and distribution network. You can find it that Panama boasts some of the cheapest looking for different flavors and textures.” in restaurants across Panama City and at beer in the world, with a can of one of Pan- Increasingly, mainstream supermarkets sell the leading alcohol retailer Felipe Motta. ama’s national beers costing anywhere from American craft brands, including Hum- 50 to 75 cents. Panama’s traditional beers boldt Brewing Company from California Brazil’s Health Care Market—A New Investment Law On January 19, 2015, President Dilma ties linked to the United Nations that pro- triple within the next four decades. Rousseff signed a law (Law 13097/2015) vide technical cooperation, financing, and According to industry experts, people in opening the way for direct or indirect for- loans. Before this law, foreign capital could low-middle income stratum, defined as eign capital investment in a number of areas be invested in health insurance companies, those earning below US $2,111 per year, of Brazil’s health care market, whose value which in turn could acquire hospitals, but and upwards, have begun to look into pri- was estimated at $208 billion or 9.1 percent these hospitals could not buy other hospi- vate health care plans and private care. In of GDP in 2013. The Ministry of Health tals with foreign capital. 2012, Minneapolis-based United Health (MOH) has responsibility for formulating According to press reports, the intent of Group (UHG) purchased a 90 percent the regulations that will govern the law. the new law is to improve health system stake in Amil, a Brazilian hospital owner Actual authorization for foreign capital pur- management and introduce result-driven and health insurance provider, for US $5 chase of hospitals, clinics, etc. must be given modernity, particularly towards improving billion to sell low-cost tiered insurance by the Ministry of Justice. patient quality of care. plans to low-middle income classes in Bra- Among other things, Law 13097/2015 spe- Two factors appear to underlay the law. zil. The private sector receives substantial cifically allows for direct foreign capital in- First, an increasing proportion of the popu- revenue from SUS to cover the services vestment, including ownership and control- lation is leaving the underfunded govern- SUS cannot provide, including hospital ling shares in: (1) health services provision ment-run universal access public health beds, diagnostic equipment and specialty and ownership of general and specialty hos- system (SUS) to seek private insurance and care. Private hospitals and health services pitals, general and specialty clinics, diagnos- health services in the private sector to more providers are also increasingly forming tic laboratories, and management services quickly access mid- and high-level care. networks to leverage shared technology for these organizations; (2) not-for-profit Second, Brazil’s population is aging – the and data for enhanced decision making, health plans provided by companies for number of senior citizens will more than health service management, integration, their employees; and (3) international enti- and information technology that SUS lacks. Brazil Health Care Law (continued) Page 3 Brazil has approximately 6,800 public and nership for productive development (PDP) man knowledge capacity, and often, a lower private hospitals of varying distribution and model to offset the government borne price on patented products. Another ex- service quality, as well as 500,000 hospital health care costs and address the need for ample is health IT.