BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Telecomunications Sector of Peru

Peru's mobile market is underdeveloped and immature in comparison with most other countries in Latin America. Both subscriber numbers and penetration rates are now rising sharply and the gulf between it and the other countries in the region analysed by BMI is narrowing, but we believe the gap is too wide to be bridged in the short term and Peru must continue to languish at the bottom of the pile. The country is also way behind its regional peers in terms of value-added service development – let alone 3G deployment – and operators continue to rely on lower revenue-generating services to drive subscriber growth as they continue to roll out services to underserved rural areas.

However, it is now one of the fastest growing mobile markets in the region, with subscriber growth of 57.5% in 2006 the fastest since services were first introduced in the late 1990s. This trend looks set to continue in 2007, with the number of net additions in Q107 more than doubling over Q106. The market grew by 61.3% y-o-y and 12.0% q-o-q in Q107, compared with rates of 39.3% and 9.1%, respectively, for the same period in 2006. Penetration had reached 34.1% by Q107 with over 9.8mn subscribers, just over 1mn of which were added in Q1 alone.

Second-ranked Claro has said it expects mobile penetration will double between 2006 and 2008, to around 60%, an indication that the company has no short-term plans to reverse the prepaid focus. Although BMI feels this is overly ambitious, we have raised forecasts for 2007-9 in light of the stronger than expected Q107 growth, although we continue to believe penetration will be no higher than 89% by 2011. We now expect penetration will hit 45% at YE07, rising to 57-58% at YE08, above our earlier expectations of 55%. Growth rates will slow but will continue to be significantly above average for the region.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - Business Environment

Latin America

Peru

Peru Telecoms SWOT Analysis

Chapter 3 - Industry Forecast Scenario

Fixed-Line

Table: Peruvian Telecoms Sector – Fixed-Line – Historical Data & Forecasts

Internet

Table: Peruvian Telecoms Sector – Internet – Historical Data & Forecasts

Mobile

Table: Peruvian Telecoms Sector – Cellular – Historical Data & Forecasts

Chapter 4 - Macroeconomic Climate

Stellar Performance

Table: Economic Activity Indicators

Chapter 5 - Competitive Landscape

Market Structure

Competitor Analysis

Table: Key Players: Peru Telecoms Sector

Table: Selected Operator Financial Parameters

Key Players

Fixed-line

Table: Regional Fixed-Line Penetration Overview

Internet

Table: Regional Internet Penetration Overview

Table: Regional Broadband Penetration Overview

Mobile

Table: Regional Mobile Penetration Overview

Market Data

Fixed-Line

Table: Peruvian Fixed-Line Market, Q206

Internet

Mobile

Table: Peru Wireless Market, Net Additions, 2005-06

Table: Peruvian Mobile Market, Q206

Chapter 6 - Industry Developments

Company Profiles

Teléfonica del Perú

Teléfonica Móviles Perú (Movistar)

América Móvil Perú (Claro)

Nextel Peru

Chapter 7 - BMI Forecast Modelling

How we generate our industry forecasts

Telecommunications Industry

Sources

Chapter 8 - Appendix: Regional Demographic Data

Wages (ave per annum), US$

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Latin America Telecommunications Reports: Sample of Companies Ranked

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Commentary on key operators highlighting ownership structures, latest available revenue figures, market share analysis and ARPU counts. BMI forecasts for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt. Company SWOTS Covering all leading telecommunications operators and manufacturers operating in each market, including competitive intelligence on geographic presence and competitive positioning against local companies; local market share; leading products, services and technologies; foreign direct investments, projects, merger and acquisition strategies.

Network of Latin American Telecommunications Sources

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BMI's Latin American Telecommunications Reports are based on an extensive network of multilateral organisations, government departments, telecommunications industry associations, chambers of commerce and company reports. Information sources include: