Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Tuesday, April 20, 2021

Particular strategies for debut of commercial 5G over 3.5 GHz

Entel and Claro launched commercial offers for FWA fixed internet in early March, while Telefónica focuses on fiber deployment. Last week, the MTC authorized the deployment for mobile services and Entel and Claro immediately started up.

At the end of February, the Ministry of Transportation and Communications (MTC) authorized the three major operators in Peru to implement services with 5G technology for fixed wireless Internet in the spectrum blocks they have in the 3.5 GHz band. As background, it should be remembered that in October 2020, the agency had published Ministerial Resolution No. 0709-2020-MTC/01.03, which enabled telecommunications companies that operate in the 3.5 GHz band to provide new services. Thus, the band, which is currently allocated to fixed wireless telephony and fixed Internet, may be used for the provision of International Mobile Telecommunications (IMT) services.

The agency had to make use of this resource to boost the supply of 5G services in the country and avoid the bureaucratic delays that the agency in charge of the bidding processes, ProInversión, usually has. With this regulatory advance, Peru became one of the few Latin American countries with commercial 5G operations. Although initially the offers were concentrated on fixed wireless Internet, both Claro and Entel (and also Telefónica, whose case it will be detailed later), requested authorization to use 3.5 GHz in mobile broadband services. The MTC gave the green light to this authorization last week, and the following day the offers from Claro and Entel could be accessed.

Among the results of the first month with FWA, the MTC highlighted that in the new commercial plans offered by the operators, the speed (Mbps) and 2 times the amount of data (GB) previously offered were increased by 2.5 times. However, the commercial strategies and offers for FWA differ depending on the operator: 

In the first days of March, Claro Peru began to market its 5G residential wireless Internet service. As stated before Osiptel, it offers a maximum download speed of 50 Mbps, guaranteed at 40%, so the minimum guaranteed speed is 16 Mbps. The upload speed is 4 Mbps, guaranteed 1.6 Mbps. Allows you to connect up to 7 devices. The cost of this plan is US$ 30 per month. The initial coverage available from Claro's 5G will reach only some areas in the south of the city of Lima. First, the beach region (known as “Asia”), to which many residents of the Peruvian capital moved due to remote work and the tendency to exodus from large cities caused by the pandemic. It is an area of high purchasing power. Also for this reason the service is available in the town of Cieneguilla, southeast of Lima, characterized by large fields and tourist stays. The capacity of the packages is up to 1,000 Gigabytes.

One day after Claro's launch, Entel presented its 5G Home Internet plan, which allows up to 14 devices to be connected simultaneously over Wi-Fi. It has a rate of US$40 per month and a maximum download speed of 50 Mbps, which guaranteed at 40%, yields a minimum download speed of 20 Mbps. To facilitate the sale, Entel presented an offer for the first six months of hiring at US$30. The service is available in the districts of San Isidro and Miraflores, among others in Lima, as well as in southern areas of the city. As MTC sources stated for this report, the operator's true focus is on the upcoming launch of 5G mobile services. Even on its website it already promotes that it will soon have them. Entel is committed to a comprehensive offer with fixed and mobile benefits, and has appeared before the authorities in search of authorization on several occasions. After the debut in Lima, it would seek to add the city of Trujillo in its 5G coverage. The capacity of the packages is up to 2,048 gigabytes. The modem that is installed in the home is a Huawei CPE 5G Pro model, at a cost of US$398.

So far Telefónica is not betting on FWA. Its focus is 100% on the deployment of fiber -translated in the offer of plans "Movistar Total" -, although it did request authorization for mobile services on its spectrum in 3.5 GHz, like its competitors. As it will be detailed later on in the section corresponding to Telefónica, the deployment of fiber in Lima is progressing, to the point that in December 2020 some 136,000 homes in the capital city already have broadband on this technology, and it is expected to reach 600,000 by the end 2021. The operator made a Quadruple Play plan available for only US$32 in the first two months (which rises to US$48 as from the third month), and this offer began to tempt users to migrate to Movistar, whereby it is even expected that this year it can return to the lost leadership in 2020.

Improved BAM time. At the beginning of last week, the MTC authorized three operators to implement 5G for mobile services. It established that it would be done under the NSA standard in the spectrum blocks previously allocated in the 1.7 GHz, 2.1 GHz, 2.5 GHz and 3.5 GHz bands. The initial implementation will be carried out in the provinces of Ica, Trujillo , Arequipa, Cañete, Huarochirí, Callao and Lima.

Entel implemented the Entel Power 5G plan, available as of April 14, with 45 GB of unlimited high-speed Internet “for apps and whatever you want”, unlimited calls and 500 SMS for US$44. The plan can be contracted alone or with the purchase of the Xiomi Redmi Note 9T or Samsung Galaxy S21 Ultra 5G compatible equipment.

Claro started a campaign to offer its catalog of 5G compatible devices in prepaid and postpaid plans, and covers various brands and models: Samsung Galaxy S21 Ultra, Samsung Galaxy S21 Plus, Samsung Galaxy S21, Xiaomi Mi 10T Pro, Xiaomi Redmi Note 9T, Huawei P40 Pro and the Motorola Moto G 5G.

To date, Movistar does not report new mobile plans on 5G. It clarifies that it was authorized to deploy 5G technology, but details that “the 5G NSA technology approved by the MTC is a phase prior to the launch of 5G in its real magnitude, for which Movistar is preparing. Given that there are still about 4.5 million people in remote communities who do not have access to the digital world, along with the implementation of the “5G NSA” Movistar will continue to expand internet access through 4G technology throughout the country".

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