Market Trends of Peru Telecom Industry
Growing Internet Penetration in Peru
- Urbanization and an expanding middle-income group are driving the demand for internet services in Peru, while infrastructure development is gaining momentum through public-private partnerships. Simultaneously, enhanced education and digital literacy are driving increased internet adoption in Peru, empowering a growing number of Peruvians to access digital platforms for education, work, and entertainment.
- Government initiatives, such as Peru's National Broadband Plan and "ConectaRural," are propelling the country's internet usage growth. These programs specifically target rural areas, aiming to bridge the digital divide. Simultaneously, the increasing prevalence of smartphones, coupled with the deployment of advanced 4G and 5G networks, is bolstering mobile internet accessibility nationwide.
- In July 2023, KKR, Telefónica Hispanoamérica, and Entel unveiled a strategic collaboration. Through this, KKR will take the lead by acquiring a controlling stake in PangeaCo. Additionally, it will also acquire the current fiber optic networks of both Telefónica del Perú and Entel Perú. The primary goal of this venture is to establish Peru's inaugural nationwide open-access wholesale fiber optics entity. The overarching aim is to enhance accessibility to fiber optic connectivity throughout the nation.
- The surge in internet usage in Peru, driven by increased smartphone adoption and more accessible data plans, has prompted telecom firms to invest heavily in advanced 4G and 5G technologies. These investments not only enhance network coverage and speed but also pave the way for novel services such as e-commerce, mobile banking, and online education, fueling the market's expansion. According to INEI (Peru), by the third quarter of 2023, internet penetration among Peruvians aged 19 to 24 surged to over 96%, showcasing a robust digital adoption trend. In contrast, the older demographic, those 60 and above, also demonstrated a significant digital presence, with over 44% utilizing the web.
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Rising Demand for OTT and PayTv Services
- Increased demand for PayTV and Over-the-Top (OTT) services is driving growth in the Peruvian telecom market. As more consumers move from traditional cable TV to digital and streaming platforms, telecom firms are expanding their offerings to meet this evolving demand.
- The rise in OTT service demand, led by platforms like Netflix and Amazon Prime and local services, has significantly boosted internet usage. In response, telecom companies are ramping up investments to enhance their broadband infrastructure. This move seeks to meet the rising demand for streaming and enhance the quality of internet services, ultimately boosting the digital experience. According to INEI (Peru), during Q3 2023, 59% of Peru's internet users exclusively accessed the web via mobile phones. Additionally, around 11.3% accessed the internet from locations other than their homes, workplaces, or mobile devices.
- Furthermore, the growing demand for digital content is driving a significant uptick in content consumption. This shift is compelling telecom providers in Peru to overhaul their networks, preparing them to handle surging data volumes. Consequently, the increased interest in PayTV and OTT services is not only boosting subscription revenues but also leading the charge in reshaping and fortifying Peru's telecom infrastructure.
- In Peru, rising broadband speeds are fuelling a notable uptick in the demand for OTT and PayTV services. Faster connections enhance the viewing experience, enabling seamless streaming of high-definition (HD) and ultra-high-definition (UHD) content. According to Speedtest, as of November 2023, Peru boasted a median mobile internet download speed of 17.41 Mbps, with uploads reaching 11.97 Mbps. In contrast, fixed broadband services in the country surged ahead, boasting a median download speed of 93.92 Mbps, accompanied by uploads at 53.80 Mbps.
- Telecom providers in Peru are leveraging a growing consumer trend by combining high-speed internet with OTT and PayTV services. This strategic bundling not only boosts the value proposition for customers but also drives the expansion of digital entertainment, thereby strengthening the telecom market's foothold in the country.
