Information Technology in Peru

IT Financing

Because of the relative youth of the Peruvian IT market, there is little information on IT financing. However, it is important to note that Peru's Telecommunications Development Fund is heavily involved in financing projects which will extend the reach of telecommunications into rural and underserved areas. In addition, Peru is the recipient of aid from international organizations, which is targeted toward improvement of telecommunicaion and information technology services.

With respect to telecommunications, most end-users, with the exception of Telefónica (which purchases directly from Spain), make their purchases through local distributors. The two most common purchase methods are letters of credit and loans from Peruvian banks (with repayment terms of between 1-3 years). Large companies like Telefónica and BellSouth/Tele2000 also issue corporate bonds as a way of obtaining money to finance operations and projects.(45)

The Telecommunications Development Fund (FITEL)

At the ITU Telecom Americas 2000 Rural Telecommunications Roundtable, Peru, Chile, and Mexico noted that rural telephony is profitable in those countries. Most of the countries in Latin America have telecommunications development funds, such as Peru's FITEL, which prioritize investment in the provision of public telephony for rural communities. Peru has been divided into six regions, each covered by the bidder that proposed to deliver services with the least government subsidization. Global Village Telecom (GVT) won a pilot project in the northern border region, installing 315 public telephones to operate via satellite with a subsidy of $8,000 per telephone installed. TeleRed, a Peruvian-owned company won in the other five regions and plans to install public telephones with subsidy of $11,000 each. Subsidies cover the cost of installing and maintaining phones for a five year period.(46)

The establishment of the such telecommunications development funds has become, in many Latin American countries, the main tool for development of telecommunications in rural areas. These funds are provided with economic resources that originate from the different revenues produced by the telecommunications sector. Regulatory bodies and the funds have provided environment which allows private enterprise to access to rural telecommunication investments. In this framework, the private operators are free to choose the technology to be deployed and to develop new services under clear rules of investment and clear rules of interconnection with the incumbent operator.(47) In the case of Peru, FITEL (Telecommunications Development Fund) has issued franchises to install, operate and maintain 213 public rural telephones in an equal number of locations. At the present time the Peruvian Rural Telecommunication Program covers 5,000 locations that are provided with voice and data access reaching up to 4 million inhabitants.(48)

International Aid

In addition, the U.S. Export-Import Bank operates in the Peruvian market, as a source of low cost U.S. dollar loans for Peruvian importers. Similarly, other international agencies, such as the Inter-American Development Bank (IADB) and the World Bank sponsor projects of all types in Peru, including telecommunications and IT development. The IADB's Informatics 2000 Initiative is designed to stimulate investment within Latin America to ensure that adeaquate communications facilities are constructed over the next several years. The IADB is attempting to ensure development that is consistent with trends in the telecommunications industry worldwide, to decrease the risk of Latin American markets being left out of the international communication, and therefore, economic trade, system.(49)

Last update: December 19, 2000 by Jeffrey S. Bernstein.