National backbone in need of reform says Osiptel

14 Sep 2018

Peru’s National Fibre Optic Backbone (Red Dorsal Nacional de Fibra Optica or RDNFO) has failed to meet targets and is need of structural reform, Rafael Muente, the head of sector watchdog the Supervisory Agency for Private Investment in Telecommunications (Organismo Supervisor de Inversion Privada en Telecommuniciones, Osiptel) told a congressional committee on transport and communications. El Comercio writes that the official presented the findings of the regulator’s market analysis to the committee, arguing that modifications need to be made to the contracts for installation and operation of the fibre, but noting that such changes would require alterations to current legislation. The RDNFO was rolled out to 22 regional and 180 provincial capitals at a cost of around USD333 million and was ready in July 2016.

According to the official, projected capacity demand for June 2018 had been 137Gbps, but reported use was just 21Gbps at that date – 84% less than expected. The report suggested that the reason for the shortfall was due to greater competition from private companies, which had installed some 24,300km of fibre within the same areas that the RDNFO is active. Altering the government’s agreement with Azteca – which currently manages the network – to allow for a more flexible pricing model could provide some redress, but negotiations with the firm have so far been fruitless. Members of the congressional committee were cited as saying that the government should not be paying to maintain networks in areas where other operators are present, and that the state should be focusing on ensuring that the internet is accessible in areas unserved by private operators.

Meanwhile, there have also been prolonged delays to the supplemental regional projects, as a result of which penetration of fixed internet and telephony services in certain rural and remote areas remained at less that 4%. Osiptel explained that the projects were being held up by difficulties accessing land in rural areas, as much of it is communal property. As a potential remedy, the regulator requested the creation of a database of land owned by public entities that could be rented to operators to hasten the deployment of fibre infrastructure. According to the telecom ministry, 15 of the 21 regional projects have been tendered, but none are operational yet, although the first three are expected to come online by the end of this month.