Phoenix Tower International
Thursday, April 16, 2020

High default rate, today main impact of pandemic on Peruvian market.

Peru was the third country in Latin America to have a mandatory quarantine to mitigate contagions: President Martín Vizcarra, who took a drastic and aggressive stance against the disease, ordered the isolation on March 15, and for the time being it will extend until April 26. After a first strong impact on the networks, today the unknown is placed on the survival of the sector: operators handle falls in billing of between 50% and 60% in March. This situation generated crossings between companies, the regulator Osiptel and the Ministry of Transport and Communications.

The Peruvian government faced the health emergency due to the coronavirus outbreak drastically and aggressively, with political and economic measures that exceed those of other Latin American countries, either in terms of time (a crucial factor in the mitigation of infections) such as of consistency. Indeed, Peru was the third country in the region to declare a State of Emergency -after El Salvador and Venezuela-, and the mandatory quarantine has been in force since March 15, and until April 26. Despite an surprising economic stimulus plan at the international level -US$2 billion, equivalent to 12% of GDP and the "“Quedate en tu casa” (Stay at your home) voucher, of US$110, for some 3.7 million families-, delinquency is already seen in the telecommunications sector, as a result of a highly informal economy: 65% of workers are part of this modality.

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