Boston, MA -- (SBWIRE) -- 07/21/2012 -- The Peru Telecommunications Q312 report contains new and updated data , given the release of full-year 2011 data for the mobile and fixed-line markets. The Peruvian mobile market expanded yet further in Q411, following on from a strong Q311. It has added over 1mn subscribers in Q311 and Q411, and BMI believes it will continue to grow strongly through 2012 and beyond.

However, our growth outlook for the market suffered a setback following the announcement that Viettel is to delay its entrance into the Peruvian mobile market until January 2013. The delay is largely blamed on the Ministry of Transport and Communication (MTC)'s hold-up in approving the company's technical plan, which will define its coverage. Viettel is keen to expand its footprint across Latin America and Sub- Saharan Africa and will see the delay in the launch of commercial operations in Peru as a major setback to its expansion strategy.

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Viettel won the concession in January 2011 to provide voice and data services, including leased lines, fixed wireless and international call services, in Peru. In return, the company agreed to pay US$1.3mn in cash to the government and provide internet access to 4,025 schools at an estimated cost of US$28.3mn. Viettel signed a concession contract with the Peruvian government on May 5 2011, which required the fourth mobile licensee to launch commercial services within one year. In July 2011, the company said it had completed the survey of around 1,500 sites to develop its network. The company also set a modest target of registering 15,000 subscribers on its network in the first year of operation and increasing its subscriber base to around 338,000 by the fifth year.

The postponement of the commercial launch of Viettel's services to January 2013 does not bode well for the operator and for the overall telecoms market. BMI expects the delay to hit Viettel's financial plans, especially as it relates to using revenue from commercial services to offset part of its roll-out costs. The company has already alluded to incurring high and unexpected costs in the process of obtaining approval for its technical plan. Meanwhile, local media reports suggest that the company is unlikely to deliver internet services to an initial group of 1,025 schools in 2012 as earlier planned.

However, there was positive news this quarter from Telefonica, which saw its mobile licence renewals looking increasingly likely. Osiptel has delivered a technical report on Telefonica's performance in the country outlining prerequisites that, if met, would allow the company's licences to be renewed for a period of 12 years. The renewal of the 800MHz and 1,900MHz spectrum bands has been the subject of dispute for Telefonica throughout 2011. While the it will come as good news for the company, the allocated concession is less than the 20 years that Telefonica was seeking.

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