Supporting innovation and sharing for rural access

The current population of Peru is 32.55 million, with 22% of the total population living in rural areas. In 2017, Peru had an estimated 38,915,386 mobile cellular subscriptions, and a mobile penetration approaching 80%.

As in other Latin American countries, a large percentage of the Peruvian population lacks access to mobile broadband. By 2018, 80% of towns in Peru — most of them rural — lacked internet coverage, and approximately four million Peruvians had only the possibility to connect via 2G but they did not have internet access. Moreover, 74% of households — again, mainly in rural areas — did not have internet access, and 53% of the population aged six or older were not internet users, primarily due to the lack of infrastructure.

Before June 2019, it was not possible to have access to the internet in the towns of Peru’s Andean region, located at 3,000 meters above sea level. Two major challenges that prevented mobile network providers from offering coverage in remote or rural areas were the high upfront costs and the implementation complexities of low-density deployments. Furthermore, technological developments were largely focused on improving internet capacity in urban areas, rather than on creating efficient, smaller scale solutions to expand access in areas with lower population density.

The Peruvian government’s commitment to address the connectivity divide and support rural access connectivity is expressed in its Telecom Law; Article 12 of the Telecom Law created the Telecom Investment Fund to finance telecom service provision in rural areas and areas of social interest, and established that telecom service providers should apportion a percentage of their annual revenue to the Fund. The government has also enacted a number of laws and regulations aimed at promoting infrastructure sharing between carriers and coordination with local authorities to aid rural connectivity.

Launched in June 2019, Internet para Todos (IpT, or ‘Internet for Everyone’ in English) is an initiative aimed at addressing the connectivity divide in Peru. This initiative is the result of a public-private partnership between Telefonica (the largest internet provider in Peru), Facebook, the Inter-American Development Bank (the largest source of development financing for Latin America and the Caribbean), and the Development Bank of Latin America (an organisation whose objective is to stimulate sustainable development and regional integration).

IpT has the goal of connecting six million Peruvians who live in rural areas by 2021, bringing mobile broadband to areas where the deployment of conventional telecom infrastructure is not economically viable.

IpT operates using a revenue sharing model that is helpful to reduce network implementation costs. It uses cloud-like architectures, automated network planning, open radio access solutions (OpenRAN), and a combination of optimised fibre and microwave networks. IpT offers wholesale access to its 3G and 4G broadband infrastructure to allow mobile operators to deliver high-quality mobile communication services to individuals, businesses, and other organisations in rural areas, without incurring high investment and operating costs.

IpT works in partnership with local communities and uses open technologies that are helpful to reduce deployment costs. The implementation of this business model was possible thanks to the use of innovative technology, the Peruvian legislative framework that allows infrastructure sharing between carriers, and the existence of rural mobile infrastructure operators.

Law No. 28295, enacted with the aim of promoting competition in the telecommunications sector and driving down costs for users, has enabled the use of shared infrastructure for the provision of telecommunications services. Additionally, the creation in 2015 of Rural Mobile Infrastructure Operators (OIMRs, by its Spanish acronym) — local companies that own mobile infrastructure but use spectrum allocated to other operators — has helped to extend connectivity in rural areas, as large mobile operators were reluctant to provide services to small or remote communities. These operations are frequently considered too risky, mainly because the infrastructure installation and maintenance costs are too high when measured against projected revenue.

IpT managed to successfully integrate open access principles and cooperation, innovative technologies, and adequate policies to transform infrastructure into a Network as a Service (NaaS) model. This has made it possible to connect people in remote areas and provide reasonable financial returns at the same time. IpT expects to demonstrate that a business model in which rural operators, technology firms, and regulators work in collaboration can be helpful to address the connectivity divide.

Internet para Todos (IpT) has benefited more than 1,000 rural communities, and is already providing internet connectivity for around 1.5 million people. Its first antenna was installed in Moya, a district with a population of less than 2,000, located in the Andean Huancavelica region at 3,160 meters above sea level. Two operators, Telefonica and Entel, use the IpT infrastructure today to provide service to around 9,000 and 3,600 towns, respectively.

The installation of the antenna in Moya has brought important benefits. For example, people who many years ago had lost connection with relatives living abroad are now able to connect with them via video call. Likewise, primary school students have enjoyed the benefits of connectivity, as they are now able to use digital learning tools in the classroom. Finally, recognising that this digital transformation has the potential to foster tourism, Telefonica helped to create the Facebook fan page “Moya te espera” to display the district´s attractions, and also trained staff from the local community to manage the district´s fanpage.

IpT has already upgraded over 3,000 cell sites from 2G to 4G, and intends to install 866 additional sites and to connect more than 30,000 rural communities by 2021. If this business model is successful, it could be replicated in other regions in Latin America and the Caribbean, with similar socioeconomic and geographical conditions, to provide mobile broadband to people living in remote areas.