Spanish presence revitalizes Peruvian telecoms

U.S. businesses eyeing opportunities in Peru would be advised to take a close look at Spain, which is currently the source of most of the foreign investment coming into Latin America.
The Spanish telecommunications giant Telefónica, for example, invested more than $3.2 billion in Peru between 1994 and 2000. By the year 2003, the multinational plans to add another $1 billion to that total.
The company’s Peruvian subsidiary, Telefónica del Peru, has spearheaded the parent firm’s huge expansion drive in the country since it won a public tender during Peru’s privatization of the industry’s two state-owned operators ENTEL and CPT in 1994.

Alfonso Bustamante y Bustamante Chairman of the Board of Telefónica del Peru

Since then, Telefónica del Peru has added nearly a million fixed lines to the country’s telephone network and has increased the number of mobile phone clients from 21,000 to 973,065. And, according to Telefónica del Peru Chairman of the Board Alfonso Bustamante y Bustamante, the company plans on being a leader in Peru for the long haul.
“Telefónica obtained a 20-year contract and every five years its progress on promised investments and goals for expanded services is revised. It already passed one revision of the contract, which also gives us exclusive rights as the country’s long-distance and local operator for five years,” Mr. Bustamante explains.
He also points out that the long haul means bringing Peru up to date as far as data transmission and telephone density are concerned, which currently runs about seven lines for every 100 inhabitants while the average in similar countries ranges from 14 to 20 per 100 people.
“We have a clear advantage to tap into the huge opportunity that this presents,” Mr. Bustamante points out. “We have access to state-of-the-art technology thanks to the size and strength of our parent company and its huge presence in the world (some 50 countries). So we can develop our own technologies and we have the resources to acquire others.”