Peru
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TIM: Asymmetric interconnection fees are best

Bnamericas Published: Tuesday, June 07, 2005
Mobile operator TIM Perú has urged the country's telecoms authorities to establish asymmetric interconnection charges between mobile operators, local newspaper Gestión quoted TIM Perú president Juan Rivadeneyra as saying. With asymmetric regulation, the dominant operator Telefónica Móviles would have to pay a higher charge to terminate calls on other operator's network than they would have to pay to reach its network. "With this regulation, other operators will be able to compete with the incumbent operator, which has a very extended network," Rivadeneyra said. Telefónica Móviles' parent company Telefónica Móviles Spain (NYSE: TEM) is already subject to asymmetric regulations in its home market, and in some countries the policy has allowed smaller operators to increase their share in the market from a little as 16% in 1986 to as much as 100% in 2004, according to Rivadeneyra. He used the example to refute comments by Telefónica Móviles Perú president Javier Manzanares to the effect that asymmetric regulation is inapplicable anywhere in the world. According to the executive, one of TEM's main advantages in Peru is that it operates in the 800MHz band, with transmission equipment that is 50% cheaper than that used by competitors operating in the 1,900MHz band. "That is why the [transport and communications ministry] MTC has determined that TEM cannot keep all of its 800MHz spectrum and must return 50% of its infrastructure, as well as forbidding them from applying on-net tariffs until [telecoms regulator] Osiptel has a final word on that matter," he said in the report. Rivadeneyra agreed with Manzanares that Peru's mobile market is not large enough to have a fourth mobile operator. "It is inefficient to have more than three operators competing in the mobile market. Studies show that in the mobile market only the first two companies lead the sector and when new players enter the market they generate losses," he added.

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