The government of Peru and telecommunications company Telefonica del Peru earlier this month agreed to end the company’s monopoly on conventional telephone service, according to published reports.
Telefonica del Peru provides local, long-distance, wireless, paging and cable TV services in the country. Its monopoly on local and long-distance services was scheduled to last until June.
Telefonica del Peru already competes in the wireless arena with Tele2000, a company owned by BellSouth Corp. Telefonica, which operates analog and Code Division Multiple Access digital wireless networks, supports about 350,000 wireless subscribers. Tele2000 has about 136,000 subscribers.
The auction of a third 30-year concession for a cellular network in Peru’s provinces has been plagued with repeated delays.
Telefonica del Peru is a subsidiary of Spanish telecommunications company Telefonica S.A., which bought a majority stake in the company in 1994. Terms of the privatization gave Telefonica a monopoly on local and long-distance services for five years.
Following the announcement of the monopoly’s early end, InterAmericas Communications Corp. announced its plans to accelerate its buildout of a public switched telephone network in Peru.
“In our opinion, the government’s decision reflects its confidence in our ability to begin competition with Telefonica del Peru almost immediately,” said Patricio E. Northland, chairman and chief executive officer of the company. “In light of their decision, we will provide high bandwidth service on a state-of-the-art 240-kilometer fiber optic backbone with the goal of being able to provide switched telephony to the Peruvian business market no later than Nov. 1, 1998.”
InterAmericas Communications is a new provider of high bandwidth integrated telecommunications services to business customers in Peru and Chile, said the company. The company operates fiber-optic networks in Peru and Chile and operates as a competitive long-distance carrier in Chile under the name FirsCom Long Distance.
BellSouth also may look to enter the conventional telephone market in Peru via its interest in Tele2000, according to Reuters.
Located in western South America, Peru has a population of about 25 million.
