Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Thursday, November 28, 2019

New guidelines for digital services in Peru: 2G shutdown and infrastructure sharing promoted

In October, the Peruvian Ministry of Transportation and Communications (MTC) submitted comments on the guidelines for the development of new services and digital technologies. Operators must present to the entity a migration plan towards new technologies that can be executed in two years. The amount of existing loT devices in 2G and their migration to other networks will be evaluated.  

In mid-October, the MTC submitted comments on the guidelines for the development of new services and digital technologies. Among its main points, it advocates an eventual shutdown of 2G networks. Operators must submit to the MTC a migration plan towards new technologies that can be executed in two years, which will be approved by Vice Ministerial Resolution.

The details of these plans include the process of client migration, the mitigation plan of possible risks and the rearrangement and unistallation by phases. In addition to being verified by the regulator, Osiptel must evaluate the amount of existing loT devices in 2G networks and enable their migration to other networks.

As of the end of last June, a 66.11% of mobile broadband accesses corresponded to LTE, followed by 19.55% to HSPA, 10.99% to GPRS/EDGE, 2.5% to UMTS/HSDPA/HSUPA and 0.83% to GSM.

Another key aspect promoted by the initiative is the sharing of active infrastructure and the National Roaming Service, aspects that were discussed in a public hearing with the operators. To advance both ways, a legal framework will be established.

Meanwhile, the market is already making its own advances in infrastructure sharing. In line with the need for new business models in Peru on the way to 5G, Telefónica reached an agreement with Entel. As the president of Telefónica de Perú, Pedro Cortes, recently said, “5G is going to arrive with some delay in Peru, but the first thing that has to happen is that the market structure can support 5G. It is not necessary to wait for 5G to share mobile infrastructure”.

According to the RAN sharing contract reached between both operators, 180 sites will be shared. Telefónica and Entel expect this to generate efficiency in terms of OPEX, CAPEX and customer service.

In addition to this, a preliminary non-binding Memorandum of Understanding was signed to explore all possible infrastructure sharing alternatives for the expansion of 4G and the advent of 5G.

Problem Areas

The guidelines proposal seeks to address certain problems observed in the Peruvian telecommunications market. First, since 2014, operators have deployed 4G infrastructure, with an average annual growth of 55% of 4G antennas. However, the coverage of 4G mobile services in only 23% of locations nationwide (2018, MTC).

On the other hand, as explained by the ministry, technological development and demand for more and better services impacted on the management, use and exploitation of the spectrum, so there is a need to optimize spectrum management practices.

Thirdly, there could be a depletion of the existing numbering ranges. To this is added the existence of inherited protocols (SS7 and Diameter) used in 2G, 3G and 4G mobile devices, which present security problems (traffic interception and falsification of information on the location of the devices), due to the growth of users and interconnected networks.

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