Industry Trend Analysis - Cost Control Key To Rural Fibre Success - NOV 2017
BMI V iew : Peru's focus on extending fibre into rural areas is welcome, but its success will depend on affordability. Increased costs would likely be passed on to consumers, so subsidies - whether by the government or the companies themselves - may be necessary to attract customers and create demand that in turn will lower costs .
As part of the country's ongoing plan to extend Internet and mobile access in rural areas, Peru's private investment promotion agency ProInversion has announced public tenders for seven regional fibre-optic broadband networks that will be integrated with the national Fibre Optic Backbone Network (RDFO). These regional networks will provide high-speed broadband connectivity to 21 of Peru's 24 regions and will supplement infrastructure deployed under an earlier scheme to develop eight regional networks.
The RDFO provides services to most regional and provincial capitals (excluding the three regions in the Amazon rainforest), providing operators with new opportunities in underserved rural provinces. While mobile penetration has passed 100%, in some rural areas it has barely reached 3% owing to the low return on investment potential arising from traditional mobile network deployment. Utilising fibre deployed by third parties would benefit new mobile players, such as Viettel-owned Bitel, as they can lease capacity on the fibre backbone and profitably offer low-cost services to underserved areas ( see ' Fibre Deal Key To Growing Bitel Market Share ' , April 26 2016).
|Cost Important In Weaning Broadband Users Off 3G/4G|
|Peru Telecoms Market Forecasts|
|f = BMI forecast. Source: BMI, Operators, Osiptel|