Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Monday, September 27, 2021

Entel Peru aims at 25% of mobile traffic to be handled over 5G by 2024

Ramiro Lafarga, CEO of the operator, spoke with Convergencialatina about the results with fixed and mobile 5G services, six months after starting commercial operations. He remarked that the shortage of compatible terminals of accessible cost for the user is the main obstacle. "There is still scale to see a return", he admitted.

<strong>Convergencialatina: Last March you debuted with commercial 5G, taking advantage of the spectrum you had at 3.5 GHz. What first results can you comment on?

Ramiro Lafarga (RL): It is important to launch commercial services to start the cyclical wheel of all the actors involved in this. It is a new ecosystem of vendors, smartphones, B2C platforms and app developers. Our motto is to be ahead of the market and we seek to streamline it.

We had the resources to launch 5G from a regulatory viewpoint, due to our 3.5 GHz license. Compared to other countries, this was presented as an opportunity in Peru. Another advantage we had was that, from a technological point of view, it is a new network: Entel has been operating in Peru since seven years ago. However, what we see is that in terms of  business model, there is a lack of scale to see profitability.

Convergencialatina: In which areas did you initially decide to offer 5G services and why?

RL: We launched in Lima and regions. We are the only ones with these features available in regions (Claro also launched 5G last March). Initial coverage was concentrated in areas of Lima. Now we are targeting high value clients in Lima, Trujillo, Piura and Arequipa. Then we will add another ten cities and later, the outskirts of the cities, in the same way as it happened with previous technologies. Scalability is important. At the customers, terminals, antennas’ level. 5G devices currently have a cost of approximately US$ 700, when on average, the devices sold in Peru have a cost ranking from US$100 to US$110. In other words, at the moment it is a “high end” product. It is difficult to massify the service.

Convergencialatina: Does the 5G network show greater efficiency vs. the 4G network?

RL: 5G is more efficient from a network point of view, compared to 4G. It's cheaper, but without customers to "fill" it, it doesn't make sense. There is still a gap. As the virtuous cycle of the ecosystem around 5G expands, we will deploy faster. The expectation is that, within three years, 25% of mobile traffic will be on 5G. Now we have dozens of antennas in Lima and regions.

Convergencialatina: What possibilities do you see in business mobile networks?

RL: Our value offer consists of two products, aimed at two specific segments: B2B and B2C. In the first case, it is the one that can get the best from technology. As for B2C, it is linked to the availability of phones and apps.

For private networks, there are three key roles: that of the operator, the application developer, and the customer. The dynamics is just beginning. We are promoting pilot tests in three areas where we see the greatest need at the corporate level: transportation, tele-education and tele-medicine.

In the realm of end-user apps, we want to test virtual and augmented reality. We did a 5G gaming competition to test latency, but without equipment, it will take time to develop.

Convergencialatina: What are the pilo tests?

RL: In transportation, we have a partnership with Lima airport for the installation of cameras on approach buses, to transmit the situation of the passengers inside those vehicles. It was already implemented and was the first pilot test. For tele education, at the end of July we carried out a test with the University Universidad Tecnológica UT for live transmission of virtual or augmented reality students, of students in anatomy or robotics classes.

In addition, we are about to launch a telemedicine pilot test for countries with wide geographies such as Peru.

Convergencialatina: How did you structure the 5G plans for mobile and fixed services?

RL: We initially wanted to differentiate the experience for a 5G versus a 4G customer, but then we homologated because the competitor made it plain. In the long term, as an industry we should allocate resources efficiently. Let the client help finance it. Today the Peruvian market does not distinguish rates from 5G or 4G, it does in speed (50 to 60 Mbps in 5G vs. 20 to 30 Mbps in 4G).

As for FWA, the traffic demand surpasses you. The mobile network is ready for you to move. In fixed services, demand in as important as in fiber. And it is possible to give 50 to 60 Mbps. If the cost of the router (US$2,500), plus the installation is added, it is very difficult to develop that market. It is not sustainable.

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