RESTRICTED
WORLD TRADE S/NGBT/W/3/Add.35
7December 1995
ORGANIZATION(95-3987)
Original: Spanish Negotiating Group onBasic Telecommunications
COMMUNICATION FROM PERU
Response toQuestionnaire onBasic Telecommunications
Thefollowing communication iscirculated attherequest ofPerutoMembers oftheNegotiating
Group onBasic Telecommunications.
_______________
PERU
PartI
Definition andMarket Structure
1. What areconsidered tobebasic telecommunications under yourregulatory regime? Howare
they defined? How does your regulatory regime define thatwhich isnotconsidered basic
telecommunications?
Thelegalframework regulating theexploitation oftelecommunications services inPerudoes
notdefine theexpression "basic telecommunications".
From atechnical point ofview, telecommunications inPerufocus ontheestablishment ofan
integrated digital network ofservices andsystems. Forthispurpose, telecommunications services are
classified asfollows:
(a) Carrier services
These telecommunications services provide thecapacity required totransport signals thatallow
thesupply ofend,diffusion andvalue-added services. These services maybeprovided byanytype
ofenterprise subject toaspecial concession.
Carrier services mayinclude thefollowing:
- Local carriers;
- domestic long-distance carriers;
- international long-distance carriers.S/NGBT/W/3/Add.35
Page2
Themethods carrier services mayuseare:
- Switchedtelecommunicationsnetworks(e.g.packet-switcheddatatransmission,circuit-
switched services, voice telephone ortelexservices);
- non-switched telecommunications networks (e.g.point-to-point andpoint-to-multipoint
circuit-leasing services).
(b) Endservices orteleservices
These telecommunications services provide allthecapacity required forcommunication among
users. Aspecial concession must beobtained forsupply ofthefollowing public endservices:
- Voice telephone services (fixed andmobile);
- telexservices;
- telegraph services;
- paging services;
- mobile automatic multiple channel selection services (trunked);
- datatransmission switching service (including packet-switched andcircuit-switched),
using ownnetwork.
(c) Diffusion services
Thecharacteristic oftheseservices isthatcommunication isinonedirection fromoneormore
transmission points toanumber ofreception points. Therecipient isfreetoreceive thecommunication,
picking upanything ofinterest. Diffusion services canbeclassified asfollows:
- Public diffusion;
- private diffusion;
- broadcasting: private services providing apublic service.
(d) Value-added services
Value-added services usecarrier, endordiffusion services asamedium andaddaparticular
characteristic offacility tothebasic service. Thefollowing arevalue-added services:
- Facsimile, storage andretransmission offacsimiles;
- videotext;
- teletex;
- teletext;
- teleaction;S/NGBT/W/3/Add.35
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- remote control;
- tele-alarm;
- storage andretrieval ofdata;
- teleprocessing anddataprocessing;
- interpersonal messaging (allforms ofelectronic mail);
- voice mail;
- advice services;
- packet-switched dataservices, notusing ownnetwork.
Inaddition, theLawclassifies telecommunication services according touseandtypeasfollows:
(a) Public: These areservices defined aspublic intheLaw'sRegulations; theyare
available tothepublic atlarge andcanbeused inexchange forsome form of
compensation. Their supply isgoverned bytheLawandmayberegulated when the
needs oftheservice sorequire. Carrier services arenecessarily deemed tobepublic
services.
(b) Private: These areservices setupbyanatural orlegalperson inorder tomeethis
owncommunication needs within Peru. They arenotavailable tothirdparties unless
theyarevalue-added services supplied tomeetthecompany 'spurpose.
(c) Private services ofpublic interest: These arebroadcasting services andinclude sound
andtelevision broadcasts.
2. Does yourregulatory regime distinguish between networks (facilities) andservices indefining
basic telecommunications? Ifso,howisthisdistinction made?
Theobjective ofthePeruvian regulatory regime istoregulate telecommunications services.
Thebasisfortheseservices isamaterial infrastructure called thetelecommunications network orsystem.
TheGeneral Regulations oftheTelecommunications Law, Supreme Decree No.06-94-TCC
published on18February 1994, contain thefollowing definitions:
(a) Telecommunications network orsystem
Thisistheinfrastructure orfacility thatestablishes anetwork ofchannels orcircuits
toconduct voice signals, sound, data,texts, images oranyother typeofsignal between
twoormore points defined byaseries ofphysical lines, radio, optical orother types
oflink,aswellastheswitching devices orequipment usedforthispurpose.
(b) Telecommunications service
Thisactivity iscarried outunder theresponsibility ofanatural orlegalperson inorder
tomake available andprovide aspecial form oftelecommunications.S/NGBT/W/3/Add.35
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3. Arethereanynetworks orservices which would beconsidered tobebasictelecommunications
within thescope oftheGATS definition which would notbesoconsidered byyournational definition?
Ifso,whatarethey?
Thefollowing services defined intheGATS arenotclassified inthePeruvian legalframework:
- Facsimile services: TheGeneral Regulations oftheTelecommunications Lawstate
thatfacsimile services intheform ofstorage orretransmission offacsimiles are
value-added services. Communication offaxcirculars inrealtimeisconsidered to
bepartofthetelephone service.
- Private circuit leasing services: Theleasing ofprivate circuits isaformofexploitation
ofcarrier services, asmentioned above inconnection withtheresponse toquestion 1.
Market structure
4. Listanybasic telecommunication subsectors orcategories which arereserved tosupply by
monopoly orexclusive supplier(s).
Localfixed-voicetelephoneservicesanddomesticandinternationallong-distancecarrierservices
aresubjecttolimitedcompetition(concurrencialimitada)untilJune1999,inaccordancewithLaw26285,
publishedon12January1994.ThisLawstatesthattheMinistryofTransport,Communications,Housing
andBuilding willrefrain fromgranting concessions forsuchservices during thesaidperiod. Currently
thesupplier inpossession oftherelevant concession forsuchservices isTelefónica delPerúS.A.
Thefollowing constitute exceptions tothepreceding paragraph:
(a) Local fixed-voice telephone services
Inareas where theholder oftheconcession (Telefónica delPerú) didnotprovide local
fixed-voice telephone services, hadnotincluded suchservices initsexpansion plan
andhadnotexercised itspreferential rightonthedateonwhich thelawtookeffect
(26June1994).
Inareas where theholder oftheconcession (Telefónica delPerú) supplies local
fixed-voice telephone services using manual exchanges, provided thatthese areas are
notincluded initsmodernization programme.
(b) Domestic carrier service
Thesupply ofcarrier services when itisintended toconnect apopulated areathathas
noaccess tothepublic telephone network provided thatthepopulated areaisnotlisted
inAnnex 1oftheConcession Agreement (ofTelefónica delPerú), isnotcovered by
thenetwork expansion requirement andisnotlisted among thepopulated areasinwhich
Telefónica delPerúhasexercised itspreferential right.
Theconcession agreements oftheformer ENTEL PERÚSAandtheformer CPTSA,merged
on31December 1994under thename ofTelefónica delPerúS.A.weredrawn upbefore theinternational
public auction andwerebrought totheattention oftheenterprises pre-selected fortheauction. These
contracts included thefollowing provisions:S/NGBT/W/3/Add.35
Page5
- Theexclusive righttosupply local fixed-voice telephone services anddomestic and
international carrier services foraperiod offiveyears (period oflimited competition)
inareas where, onthedateofprivatization, these enterprises were operating or
undertook toexpand their services; after these fiveyears ofexclusive rights, a
free-competition regime would prevail. Other telecommunications services aresubject
tofreecompetition (libre competencia);
- Theimplementation ofatariff readjustment programme until1998, comprising a
progressive adjustment toafixed rateforlocal services soastoeliminate the
cross-subsidiesforinternational,localandlongdistancetariffs.Theprogrammeincludes
asystem ofweighted average price capsforaccess tothenetwork, private and
commercial monthly rental services, local, domestic andinternational long-distance
telephone calls;
- Meeting theexpansion andmodernization goals ofthetelephone service with
approximately1,100,000newtelephonelinesuptotheyear1999,ensuringgeographical
distribution, aswellascompletion oftheprogramme toimprove thequality ofthe
service;
- Commitment toprovide telecommunications services withtheinstallation ofatleast
onepublic telephone in1,500 populated ruralareas inPeruwithover500inhabitants.
Theaimofthese measures istoprevent inefficient allocation ofresources, eliminate tariff
distortions (cross subsidies) inorder toopen upthemarket tofreecompetition (libre competencia)
subsequently.
Other telecommunications services suchastelex, telegraphy, datatransmission, cellular mobile
telephones, thefunctioning ofpublic paytelephones, ruraltelephony, cable television, pagers andlocal
carriers interaliaaresubject tofreecompetition (libre competencia). Model contracts forthispurpose
areagreed between theMinistry ofTransport, Communications, Housing andBuilding andthe
supervisorybodyforprivateinvestmentintelecommunications(OSIPTEL),presentingatechnicalproject
fortheservice andaminimum expansion planforthefirstfewyears. Theyalsoenvisage thepossibility
that,ifthemarket doesnotmeet theexpectations ofthesupplier oftheservice, hemayrequest
modifications totheexpansion plan, giving thegrounds forhisrequest.
Value-added services donotrequire anyconcession, butmustberegistered forinformation
purposes withtheMinistry ofTransport, Communications, Housing andBuilding, andthesuppliers
ofsuchservices arefreetofixtheirrates.
5. Doesyourregime designate oneoralimited number ofmonopoly/exclusive suppliers tosupply
anybasic telecommunications nationally, onageographical basis, orforparticular market segments?
Howisit(orthey)constituted(e.g.governmentministryoragency,whollygovernment-ownedcorporate
entity, company partly owned bythegovernment, privately owned)?
InaccordancewithArticle70oftheTelecommunicationsLaw,SupremeDecreeNo.013-93-TCC
published on28April 1993, bySupreme Decree thenumber ofholders ofconcessions foraparticular
service mayberestricted. Therestrictions adopted maybeincluded intheconcession agreements.
Inthecases referred toabove, concessions mustbegranted bymeans ofapublic competition. InPeru,
theformer Peruvian Telephone Company (CPT SA)provides localfixed-voice telephone, localmobile
telephone, pager, cable TV,switched datatransmission andlocalcarrier services intheformofcircuit
leasing intheprovinces ofLima andCallao oftheDepartment ofLima (capital ofPeru). ThePeruvian
State holds 20percentoftheshares inthiscompany, theremaining 80percentbeing heldbytheS/NGBT/W/3/Add.35
Page6
private sector. Theformer National Telecommunications Enterprise ofPeru(ENTEL PERU SA)
provides localfixed-voice telephone services intherestofthecountry (excluding Lima andCallao),
anddomestic andinternational long-distance telephone, telex, telegraph, mobile telephone, switched
datatransmission andlocalcarrier services, domestic andinternational longdistance intheform of
circuit leasing, interalia,alloverPeru(including Lima andCallao) andtheStateowns 100percent
oftheshares.
Theprivatization programme inthetelecommunications sector envisaged thesaleof35per
centoftheshares inENTEL PERU SAand35percentoftheshares inCPTSA(20percentbelonging
toitandtheremaining 15percentasnewcapital atthetimeoftheinternational public auction). Two
concession agreements wereconcluded forthispurpose, oneforeachenterprise. Thecontract ofsale
forENTELPERUSA'ssharesprovidedforthepossiblemergerofthetwoenterprises.Theinternational
public auction washeldon28February 1994 andthewinning consortium, CPTTelefónica delPerú,
decided tomerge ENTEL PERU SAandCPTSAasfrom 31December 1994.
Following themerger, approximately 71percentofTelefónica delPerú'sshares belong to
theprivate sector, oftheremaining 29percent,some weresoldtotheemployees ofENTEL PERU SA,
andtherest,which areowned bytheState, willbesoldoverthenexttwoyears intheso-called
"citizens 'participation" programme, which encourages participation bythepopulation asawhole.
Inthisconnection, ascanbeseenfrom thisandthepreceding replies, thelocalfixed-voice
telephone service anddomestic andinternational carrier services inthewhole ofPeruaresubject to
limited competition untilJune1999.
Forcellular mobile telephony, which usestheAMPS analog technology, twocompanies hold
concessions intheprovinces ofLima andCallao (cities thatform partofthecapital ofPeru), inthe
restofPeruonlyoneconcession hasbeengranted andasecond ispending (BBand). Following the
merger ofCPTSAandENTEL PERU SA,onesupplier hasalltheABand concessions forthewhole
ofPeru.
6. Isforeign equity participation orownership ofmonopoly orexclusive suppliers permitted?
Ifso,whatisthemaximum percentage share allowed andwhatisthecurrent levelofidentifiable foreign
participation?
Yes,upto100percent. Atpresent, private participation inthemajor supplier is71percent,
fortheother operators, private participation maybeupto100percent. Legislative Decree No.662
published on2September 1991, approved theregime thatprovides legalstability forforeign investment
andprovides thatforeign investors andenterprises inwhich theyparticipate havethesame rights and
obligations asdomestic investors andenterprises, theonlyexceptions being those laiddown inPeru's
Political Constitution andintheaforementioned Legislative Decree
Legislative Decree No.757,published on13November 1991, approved theFramework Law
forgrowthinprivateinvestmentandlaiddownrights,guaranteesandobligationsapplicabletoallnational
orforeign natural orlegalpersons owning investments inPeru, soastoguarantee freedom ofinitiative
andpresent orfuture private investment inallsectors inanyofthebusiness orcontractual forms allowed
bytheConstitution andthelegislation.
7. Ifyourregime isgenerally characterized asnotpermitting competition, please indicate:
Asmentioned intheresponse toquestion 4,onlylocal fixed-voice telephone services and
domestic andinternational long-distance carrier services, withtheexceptions mentioned, aresubject
tolimitedcompetitionuntilJune1999.Theotherservicesaresubjecttofreecompetition(librecompetencia).S/NGBT/W/3/Add.35
Page7
(a) ifcertain activities orcategories ofwhat could beconsidered basic telecommunications are
notreserved tothemonopoly, e.g.facsimile, telex, datatransmission, mobile, satellite services;
Asstated intheresponses toquestions 3and4inPartI,using theclassification listonpage3
ofdocument MTN.GNS/W/120, thefollowing telecommunications services arenotreserved:
- Mobile telephone services (response toquestion 4);
- switched datatransmission services (response toquestion 4);
- telexservices (response toquestion 4);
- telegraph services (response toquestion 4);
- local carrier services (inaccordance withthedefinitions given intheresponse to
question 3);
- facsimileservices(inaccordancewiththedefinitiongivenintheresponsetoquestion3).
Localfixed-voicetelephoneservicesanddomesticandinternationallong-distancecarrierservices
aresubject tolimited competition, withthecorresponding exceptions.
(b) Arethere anyother means through which foreign suppliers ofbasic telecommunications are
ormayparticipate inthesupply ofbasictelecommunications, e.g.subcontract orbuild-operate-
transfer arrangements withthemonopoly suppliers?
Suppliers arefreetodecide ontheuseofsubcontracting orother participation mechanisms.
8. Please listandbriefly describe anyintergovernmental agreements, bilateral orotherwise, that
yourgovernment hasentered intorelating tothesupply ofbasic telecommunications networks and
services.
Peruisamember oftheInternational Telecommunications Satellite Organization (INTELSAT),
theInternational Maritime Satellite Telecommunications Organization (INMARSAT) andtheAndean
Subregional Agreement, andhasconcluded bilateral interconnection agreements withneighbouring
countries.
PartII
Competition
Forthesubsector andcategory headings insections AandB,thefivequestions listed below
should beaddressed foreachsubsector andcategory thatyoudescribe. Recognizing thatsubsectors
andcategories mayoverlap, please keepinmind thatitistheintroduction ofcompetition andtheway
ithasbeenintroduced thatshould determine howtoselect thesubsectors andcategories covered in
yourresponses.
(i) Overview
Whatarethemaingovernmentpoliciesandregulationsregardingthecompetitioninthissubsector
orcategory?Canforeignsuppliersparticipateinthesupplyofbasictelecommunicationsinthissubsector
orcategory?S/NGBT/W/3/Add.35
Page8
Therelevant regulatory framework isshown below:
Law Year Comments
Legislative Decree No.702 1991 LawonthePromotion ofPrivate Investment in
Telecommunications
Decree Laws Nos. 26095 and26096 1992 TheState'sroleinthetelecommunications sector
Supreme Decree No.013-93-TCC 1993 Single Decree implementing theTelecommunications
Law
LawNo.26285 1994 Constitutional Development Lawforthegradual
elimination ofthetelecommunications monopoly
Supreme Decree No.006-94-TCC 1994 General Regulations oftheTelecommunications Law
Supreme Decree No.062-94-PCM 1994 Regulations ofthesupervisory body forprivate
investment intelecommunications (OSIPTEL)
ThePeruvian regulatory framework states thatitisinthenational interest tomodernize the
sector within aframework offreecompetition (libre competencia). Thishastwofundamental objectives:
topromote private investment andguarantee theeconomic efficiency ofthesupply anduseofservices.
Clear rules havebeenlaiddown forthispurpose andtheyarewidely acknowledged tobeequitable.
They guarantee areasonable return oninvestment andoffer legal stability toinvestors sothatthey
candevelop theirbusiness inawaythatprovides modern telecommunications services withthequality,
coverage andvariety needed tomake apositive contribution tonational development.
Theintroductory provision oftheTelecommunications Law therefore declares thatthe
development oftelecommunications isapublic necessity andimplies attracting private investment,
bothdomestic andforeign.
Article 6oftheLawprovides thattheState promote freecompetition inthesupply of
telecommunications services, regulate themarket sothatitfunctions satisfactorily, control theeffects
ofmonopolies, prevent restrictive practices andagreements derived fromadominant market position
onthepartofaparticular enterprise orenterprises. TheState alsopromotes participation byusers
oftelecommunications services inthefixing ofcharges andinthesupply andcontrol oftheservices.
Foreign suppliers mayparticipate inthesupply oftelecommunications. Inthecaseoflocal
fixed-voice telephone services anddomestic andinternational long-distance carrier services, itshould
benoted thatthere isaperiod oflimited competition untilJune1999.
(ii) Modes ofsupply
Inyourview,howdotheGATSmodesofsupply(cross-border,consumptionabroad,commercial
presence andpresence ofnatural persons) apply tothissubsector orcategory? What kinds of
requirement, conditions orlimitations areapplied inthissubsector orcategory which relate toeach
mode ofsupply?
Thesupply ofanypublic telecommunications service requires aconcession orauthorization
from theMinistry ofTransport, Communications, Housing andBuilding, withtheexception of
value-added services, which mustberegistered intheRegister ofEnterprises Supplying Value-Added
Services, keptbytheMinistry. Anyforeign supplier wishing toprovide telecommunications servicesS/NGBT/W/3/Add.35
Page9
directly tousers without going through theexisting networks ofsuppliers musttherefore request the
relevant concession orauthorization from theMinistry.
Theconsumption abroad mode ofsupply would beapplicable, forexample, tothecaseofthe
"roaming" facility incellular mobile telephone services.
There arenorestrictions onthecommercial presence mode ofsupply.
With regard tothepresence ofnatural persons mode ofsupply, Perupermits entry ofnatural
personssupplyingservicesandemployedbyenterprisessupplyingservices,iftheyarecitizensofmember
countries oftheGeneral Agreement onTrade inServices (GATS), foraperiod ofnotmore thanthree
years, which maybeextended forsuccessive periods ofnotmore thanthree years. Suchpersons may
notcomprise more than20percentofthetotalnumber ofstaffemployed bytheenterprise andtheir
remuneration maynotexceed 30percentofthetotalpayroll. These conditions donotapply inthe
following cases:
- Iftheforeign supplier ofservices isthespouse, parent, childorsibling ofaPeruvian
citizen;
- inthecaseofpersonnel offoreign enterprises providing international land,airorwater
transport under aforeign flagandforeign registration;
- inthecaseofforeign personnel working inmultinational service enterprises or
multinational banks subject tothelegalregulations applicable tothese specific cases;
- inthecaseofforeign investors whokeepaminimum number oftaxunits(Unidades
Impositivas Tríbutarias) inPeruduring thetermofthecontract;
- inthecaseofartists, sportsmen orsportswomen orother suppliers ofservices taking
partinpublic performances inPeruforamaximum ofthree months eachyear.
Employers mayrequest exemption from thepercentages concerning thenumber offoreign
workersandtheirproportioninthecompany'spayrollforspecializedprofessionalortechnicalpersonnel,
managerialoradministrativepersonnelinvolvedinnewbusinessactivitiesorinreconversion,specialized
personnel recruited forteaching, personnel ofpublic orprivate enterprises withaStatecontract, and
inanyother caseprovided forinaSupreme Decree asaresult ofspecial expertise.
Note: Responses onmodes ofsupply should notnecessarily belimited tomeasures which might relate
tomarket access ornational treatment asdefined bytheGATS. Information provided may
helpadvancediscussionsonhowthemodesofsupply,particularlycross-borderandconsumption
abroad, relate tobasic telecommunications.
(iii) Market access
Whatkindoflimitationsonmarketaccessareapplied?(I.e.,arethereanyquantitativelimitations
on,oreconomic needs testsapplied to,thenumber ofsuppliers? Arethere anylimits onthetotal
value oftransactions, totalnumber ofoperations, quantity ofoutput, orthetotalnumber ofpersons
thatmaysupply basic telecommunications orbeemployed byasupplier? Arethere anyrestrictions
orrequirements regarding typeoflegalentity thatmaysupply basic telecommunications? Arethere
anylimits onforeign ownership orequity participation?)S/NGBT/W/3/Add.35
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Article124oftheGeneralRegulationsoftheTelecommunicationsLawprovidesthatthegranting
ofaconcession forthesupply ofaparticular public telecommunications service mustbethesubject
ofapublic auction when there arerestrictions ontheavailability offrequencies oronthefrequency
bands available inaparticular zoneorservice area.
Localfixed-voicetelephoneservicesanddomesticandinternationallong-distancecarrierservices
aresubject tolimited competition, withthecorresponding exceptions, theother services arenotsubject
toanytypeofrestriction (seeresponses toquestions 4and5inPartI).
(iv) National treatment
What kindoflimitations onnational treatment areinplace extending toforeign suppliers
treatment lessfavourable thanthatfordomestic suppliers? (E.g. arepreferences given todomestic
suppliers orrestrictions orobligations imposed onforeign suppliers withrespect toanyprocedures
orregulations,includinglicensing?Arethereanylimitationsonthenationalityorresidencyofmanagers,
directors, orboard members? Arethere anyrestrictions onforeign ownership oflandorfacilities?)
Inaccordance with Article 15ofthe Telecommunications Law, Supreme
Decree No.013-93-TCC, published on28April 1993, foreign participation intheshare capital of
companies operating telecommunications end-services mustcomply withtheprovisions oftheForeign
Investment Law(Legislative Decree No.662,published inAugust 1991, which provides aregime
oflegalstability forforeign investment byestablishing certain guarantees).
When theforeign investment hasbeenmade, itmustberegistered withthecompetent national
authority. Inconnection withproperty, Peru'sPolitical Constitution provides thatwithin 50kms. of
thefrontier foreigners maynotunder anycircumstances directly orindirectly purchase orownmines,
land, woodland, water resources, fuelorenergy sources, whether individually orasacompany, on
penalty oftransfer oftherights thusacquired totheState.
Seetheresponse under (ii)inPartII.
(v) Licensing
Iflicensing isrequired inthissubsector orcategory, briefly describe theprocedures concerned
andexplain themain requirements, criteria andfeesapplied. What aresome oftheprincipal terms
andconditions onlicensees, oncealicence isobtained?
Note: Licensing isintended tobeunderstood inabroad sense, toinclude processes suchasapproval,
authorization, registration orcertification, asapplicable.
Inorder tosupply public telecommunications services, aconcession agreement withtheState,
mustbysigned through theMinistry ofTransport, Communications, Housing andBuilding, subject
toafavourable opinion onthepartofOSIPTEL. Thecontract shows thefollowing:
- Thesubject oftheconcession andtheservices authorized tobesupplied;
- thetermoftheconcession;
- maximum duration andtheservices included during thelimited competition period,
asappropriate, inaccordance withtheprovisions ofLawNo.26285;
- therights andduties oftheholder oftheconcession;S/NGBT/W/3/Add.35
Page11
- theminimum expansion planfortheservice;
- anundertaking tocomply withthetechnical specifications fortheinstallations laiddown
inthebasic technical plans;
- anundertaking nottoinstall usedequipment, except forinternal transfers, andto
contractoutthesupplyofgoodsandservicesusingproceduresthatguaranteecompetitive
tenders. Thecontract setsthequantitative limits applicable;
- special cases inwhich subcontracting isallowed;
- areacovered bytheservice;
- compatibility ofthevarious generations ofterminal equipment which, oncetheyhave
beenapproved, maybeconnected;
- time-limits andcalendar fortheinstallation ofequipment andthecommencement of
theservice;
- characteristics andprocedures tobefollowed inorder toconnect approved terminals
totheservice;
- requirement tokeepseparate accounts inaccordance withtheprinciple ofimpartiality
ifanumber ofservices aresupplied intheconcession area;
- tariffmechanisms; criteria andcompliance withtheobjectives ofquality fortheservice;
regulations ontheinterconnection ofservices andobligations, which mustbeapproved
byOSIPTEL;
- guarantees provided bytheholder oftheconcession toensure compliance withthe
undertakings given intheconcession agreement;
- grounds forterminating theconcession agreement;
- penalties.
Value-added services onlyneedtoberegistered withtheMinistry.
Concession feesareapercentage oftheinitial investment envisaged bytheoperator andmay
varyiftheconcession isgranted asaresult ofpublic auction.
Operators ofcarrier services andpublic end-services pay1percentoftheamount oftheir
annual turnover totheTelecommunications Investment Fund (FITEL), tobeusedexclusively for
financing telecommunications services inruralareasorinareasdeemed tobeofpriority social interest.
Inaddition, feesmust bepaidforthecommercial exploitation oftheservices (annual taxes) tothe
Ministry ofTransport, Communications, Housing andBuilding, together withthecharges made for
thesupervisory services ofOSIPTEL.
A. Subsectors
Foranysubsector inwhich competition ispermitted inyourregime (i.e.which arenotreserved
tomonopoly orexclusive suppliers) answer questions (i)through (v)above, asapplicable. ThefollowingS/NGBT/W/3/Add.35
Page12
listofsubsectors isconsidered illustrative andshould besupplemented withanyother subsectors or
subactivities which youmaywishtodescribe.
Thisdocument usestheexpression "Limited Competition (Concurrencia Limitada) "forlocal
fixed-voice telephone services anddomestic andinternational carrier services, forwhich theMinistry
ofTransport,Communications,HousingandBuildingwillnotgrantanynewconcessionsuntilJuly1999,
inaccordance withLawNo.26285, subject totheexceptions described intheresponse toquestion 4
inPartI.
ThePeruvian regulatory framework doesnotdefine freecompetition inthesense oflibre
concurrencia ,however, ineconomic terms theconcept means thatthere arenobarriers totheentry
ofnewtelecommunications service suppliers andthatthere isatariff system withaprice capbelow
which suppliers mayfreely fixtheirprices, unlike theconcept offreecompetition inthesense ofLibre
Competencia according towhich suppliers arefreetoenter andleave themarket andfixtheirprices.
Inconnection withthepreceding paragraphs, attention isdrawn tothefollowing:
(a) Voice telephone services
Local fixed-voice telephone services aresubject tolimited competition;
Mobile telephone services aresubject tofreecompetition (libre concurrencia).
(b) Packet-switched datatransmission services
Freecompetition(libreconcurrencia)forlocalservices,limitedcompetitionfordomestic
andinternational long-distance services.
(c) Circuit-switched datatransmission services
Freecompetition(libreconcurrencia)forlocalservices,limitedcompetitionfordomestic
andinternational long-distance services.
(d) Telex services
Freecompetition (libre concurrencia).
(e) Telegraph services
Freecompetition (libre concurrencia).
(f) Value-added services intheform ofstorage andretransmission offacsimiles
Service subject tofreecompetition (libre competencia)
(g) Carrier services intheform ofprivate leased circuit services
Freecompetition (libre concurrencia) onlyatthelocallevel. Limited competition for
domestic andinternational long-distance services.
(o) OtherS/NGBT/W/3/Add.35
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Thefollowing aresome additional examples ofbasictelecommunications networks orservices
notexplicitly listed in(a)-(g) and(o)above, forwhich responses mayberelevant: voice/non-voice
services using domestic/international private leased circuits; cable-TV-related voice telephone networks
andservices; domestic/international satellite services andsatellite links/capacity; analog/digital cellular
mobile networks andservices; PCnetworks andservices; paging services; mobile dataservices;
fixed lines/wireless local access; local/long-distance linelinks; local/long-distance switching;
international switching andother international gateway facilities. Whereas some ofthese might be
considered tofallunder (o),above some might alsobeconsidered tobeactivities falling within
subsectors (a)-(g).
- Cable-TV-related voice telephone networks andservices
Cable-TV services aresubject tofreecompetition (libre concurrencia). Atpresent,
thetwoservices utilize separate networks.
- Networks andservices forpersonal communications systems
There arenotyetanyregulations relating tothese services.
- Paging services
Freecompetition (libre concurrencia).
Foraspects related tonetworks, seetheresponse toquestion 2inPartI.
B. Categories
Foreachofthecategories thatfollow inwhich competition ispermitted, answer questions (i)
through (v)above, asapplicable aswellasthespecific questions listed under agiven category.
Local/long distance/international
1. How arelocalanddomestic longdistance distinguished ordefined?
Alocalserviceissuppliedwithinthesamelocaltelephonechargearea.Adomesticlong-distance
service covers twolocaltelephone charge areas within Peru.
2. Arethere anyregulatory orother distinctions between domestic (local andlongdistance) and
international networks andservices andbetween thesuppliers ofbasic telecommunications inthese
market segments? Ifso,whatarethey?
Forbasictelecommunications, domestic andinternational long-distance communications must
utilize thedomestic andinternational long-distance carrier services respectively.
Asalready mentioned, inaccordance with Law No.26285, domestic andinternational
long-distance carrier services aresubject tolimited competition untilJune1999, whereas thelocalcarrier
service issubject tofreecompetition (libre concurrencia).S/NGBT/W/3/Add.35
Page14
Wire-based
Radio-based
Note: Please address alltypes ofrelevant radio-based telecommunications including satellite links,
access tosatellite capacity, VSAT, mobile cellular communications, paging, mobile dataservices and
otherradio-communicationsystems.Recognizingthatwire-basedor"fixed"networkscanberadio-based
inpart,responsesunderthiscategoryshouldrelatetoanyrequirementsspecificallyrelatedtoradio-based
elements ofnetworks orservices.
Carrier services mayuseradio-based systems, satellite links, access tosatellite capacity and
VSAT technology interaliaandthepreceding paragraph regarding limited competition isapplicable.
Cellular mobile telephone services, paging andtrunking services, interaliaaresubject tofree
competition (libre concurrencia).
Resale basis
3. Doyourregulations permit international resale ofprivate leased circuit capacity ifconnected
tothepublic network? Ifso,atoneend? Atbothends? Under whatconditions? Isresale ofswitched
voice capacity permitted?
TheLawdoesnotgenerally allow theresale ofprivate leased circuit capacity.
According totheGeneral Regulations oftheTelecommunications Law, Article 234,
paragraphs (a)and(b),thefollowing areserious offences:
(a) OfferingtelephoneservicesformakingtelephonecallintentswithinPeruforthepurpose
ofobtainingareturncallwithdialtonecomingfromabasictelecommunicationsnetwork
situated outside Peru;
(b) transactions withPeruvian orforeign entities tochannel theirtelephone communications
toother countries without theintervention oftheholders ofconcessions forthelocal
fixed ormobile public telephone service.
Article 236,paragraph (b),oftheRegulations provides thatitisaserious offence foranatural
orlegalperson toacquire atelecommunications service ifheisnotauthorized todosoinaccordance
withtheRegulations.
4. Isresale ofprivate leased circuit access capacity permitted? Ifso,under what conditions?
Maybasic telecommunications beresold tomake them available tothird parties? Forwhich basic
telecommunications isthispermitted?
No.
Facilities-based
5. Maybasic telecommunications suppliers (foreign anddomestic) construct andoperate their
ownnetworks orinvest inconsortia toconstruct andoperate suchfacilities? Ifnot,whatorganizations
arepermitted toconstruct andoperate basic telecommunications network infrastructures?S/NGBT/W/3/Add.35
Page15
Foreign anddomestic basictelecommunications suppliers mayconstruct andoperate theirown
networks.
Article 33oftheTelecommunications Lawprovides thatvalue-added services thatrequire their
owntelecommunications networks, asdistinct fromcarrier services orteleservices, require aspecial
authorization from theMinistry ofTransport, Communications, Housing andBuilding.
ToimplementArticle33oftheTelecommunicationsLaw,Article104oftheGeneralRegulations
states that,where strictly necessary andonlyasanaddition tothepublic network, theinstallation and
operation ofone'sownnetwork tobeusedasthebasicmedium fortheexclusive supply ofvalue-added
services require thesamespecial priorauthorization asforaprivate radiocommunication service, issued
bytheDirectorate-General ofTelecommunications. Theauthorization willnotbegranted if,inthe
place where theownnetwork istobesetup,there arealready public carrier services orteleservices
thatmeettherequirements forthesupply ofthevalue-added service.
Forlocal carrier, cable TV,cellular mobile telephone, paging andother services subject to
freecompetition (libre concurrencia), anydomestic orforeign supplier mayconstruct andoperate his
ownnetwork orinvest inconsortia toconstruct andoperate suchfacilities.
Local fixed-voice telephone services anddomestic andinternational long-distance carriers are
subject tolimited competition.
Public/non-public supply
6. Does yourregime make distinctions between suppliers ofpublic switched andnon-public basic
telecommunications? Ifso,how?
Adistinction ismade between public telecommunications services, which areregulated, and
private services, which arenotregulated. Private services maynotbeoffered tothirdpersons.
7. What basic telecommunications doyourregulations require, explicitly orineffect, tobemade
available tothepublic generally?
Asmentioned intheresponse toquestion 1inPartI,theterm"basic telecommunications"
isnotdefined legalframework inPeru.
Allservices deemed tobepublic telecommunications services mustbemade available tothe
public generally.
8. What basictelecommunications doyourregulations permit tobesupplied onanon-public basis
(i.e., notrequired tobemade available tothepublic generally)?
AccordingtoArticle20oftheGeneralRegulationsoftheTelecommunicationsLaw,teleservices,
diffusion andvalue-added services (seetheresponse toquestion 1inPartI)maybepublic. Carrier
services must bepublic.
9. What obligations orresponsibilities areincurred bystatus asapublic basictelecommunications
supplierandunderwhatconditions?E.g.,whatkindsof"commoncarrier"-likeobligationsareimposed
(e.g.withregard touniversal service), andonwhom?
Seetheresponses toquestion 4inPartIanda(v)inPartII.S/NGBT/W/3/Add.35
Page16
10. What, ifany,restrictions arethere onorganizing andoffering aprivate network bya
telecommunications supplier?
Itmayonlybeoffered within theareaofthesupplier 'sconcession.
Limited competition forlocalfixed-voice telephone services anddomestic andinternational
long-distance carriers isineffect untilJune1999.
11. Istheoperation ofpublic pay-phones reserved tomonopoly orexclusive suppliers?
Thepublicpay-phoneserviceissubjecttofreecompetition(libreconcurrencia)and,asmentioned
above, theservice maybeprovided by"independent operators, whomayrequest aconcession orcome
toanagreement withthesupplier holding theconcession forthelocalfixed-voice telephone service.
PartIII
Regulatory Issues
Inrespondingtothequestionsinthissection,participantsareaskedtoprovidespecificreferences
tothesource orstatus ofthemeasures concerned (e.g., where possible, acitation ofthelaw,regulation,
rule,guideline, decision ordecree).
Relationship between regulatory andoperational functions
1. Doanybasictelecommunications suppliers become involved, directly orindirectly, inmaking
regulatory policy enforcement ofregulations? Informulating standards orenforcing standards?
Suppliers ofbasic telecommunications areinvolved inmaking regulatory policy through the
public hearings provided forinArticles 5,17,24and137oftheGeneral Regulations ofthe
Telecommunications Law.
According toArticle 75oftheTelecommunications Law, Supreme Decree No.013-93-TCC,
published on28April 1993, theMinistry ofTransport, Communications, Housing andBuilding is
responsible forgranting concessions anddeciding upon policy inthesector interalia,andArticle 77
specifies thefunctions ofOSIPTEL related tocontrolling themarket forpublic telecommunications
services, establishing tariffsystems, promoting private investment inthesector, monitoring thequality
oftheservice,compliancewiththeconcessionagreements,regulatinginterconnection,resolvingdisputes
amongsuppliersanddealingwithcomplaintsbyusersthathavebeenrejectedbyoperators,administering
thetelecommunications investment fundinruralareas andareas ofpriority social interest interalia.
Article 83oftheTelecommunications Lawprovides thattheBoard ofGovernors ofOSIPTEL
should becomposed ofsixmembers, three appointed bytheGovernment, theother three represent
suppliers ofcarrier services, suppliers ofend-services andusers oftelecommunication services
respectively.
2. Isyourregulatory authority (orauthorities) alsoresponsible forformulating standards? For
enforcing standards?
According toArticle 75oftheTelecommunications Law, theMinistry ofTransport,
Communications, Housing andBuilding isresponsible forthefollowing:
- Deciding upon telecommunications policy, following-up andmonitoring itsresults.S/NGBT/W/3/Add.35
Page17
- Drawing upandputting forward forapproval theregulations andplans ofthevarious
services provided forintheLawandtaking therelevant decisions relating tothem.
- Grantingandannullingconcessions,authorizations,permitsandlicences,andoverseeing
theirappropriate utilization.
- Deciding uponthepolicy tobefollowed inrelation tointernational telecommunications
relations.
- RepresentingtheStateduringnegotiationsontelecommunicationstreatiesoragreements.
- Proposing theNational Telecommunications Plan forGovernment approval and
monitoring compliance withit.
- Promoting thedevelopment oftelecommunications industries andcomputer services
based ontelecommunications services inaccordance with Peru'stechnological
development.
- Controlling useoftheradio spectrum anddrawing upandapproving theNational
Frequency Allocation Plan.
- Managing thesystem forthecontrol andmonitoring ofandresearch intotheradio
spectrum.
- Drawing upandapproving technical specifications forapproval oftelecommunications
equipment andapparatus andissuing thecorresponding certificates ofapproval. It
maydelegate authority forthenecessary measurements andteststospecialized bodies
orlaboratories.
- Compiling theNational Telecommunications Services register.
- Carrying outtheinspection andsanctions responsibilities laiddown intheLaw.
- Proposing forapproval thepercentages forradio fees,taxes andcharges laiddown
intheLaw.
- Automatically annulling concessions orauthorizations granted fortelecommunications
services when theowners oftheserights donotoperate thesaidservices onanongoing
basis orwithin thetime-limits provided intheregulations.
- Applying andensuring compliance withtheTelecommunications Law, itsregulations
andother related provisions.
- Delegating itsresponsibilities andauthority toOSIPTEL.
According totheTelecommunications LawandtheOSIPTEL Regulations, Supreme Decree
No.62-94-PCM published on5August 1994, OSIPTEL hastheauthority toregulate, control, remedy,
punish andsettle disputes within itssphere ofcompetence.
OSIPTEL issolely responsible forthefollowing :S/NGBT/W/3/Add.35
Page18
- Establishing regulations governing theconduct ofoperators onthebasisofequity, non-
discrimination, impartiality andfreeandfaircompetition.
- Fixing rates andinterconnection charges forpublic telecommunications services,
establishing rules fortheirapplication andmonitoring compliance withthem.
- When itdeems appropriate, establishing theguidelines, criteria and/or restrictions for
enterprises holding concessions forcarrier services when negotiating international
operational agreements, inparticular withregard toaccounting ratesamong enterprises,
andtoensure compliance withthem.
- Specifying thetechnical, economic andlegalstandards forinterconnection contracts,
approvingsuchcontractsandamendmentstheretoand,whereappropriate,automatically
orattherequest ofaparty issuing orders forinterconnection.
- Within itscompetence, laying down thestandards forquality inthesupply ofpublic
telecommunications services.
- Monitoring: (i)levels ofquality andefficiency inthesupply ofpublic
telecommunications services, including relations between enterprises andusers; (ii)
compliance withthetechnical standards forinterconnection andtherightofoperators
tohaveaccess tothenetwork; (iii)theareas ofresponsibility among theoperators;
(iv)fulfilmentofthecommitmentsundertakeninconcessionagreements;(v)compliance
withother provisions related tomatters under itsresponsibility.
- Giving apreliminary opinion onmodel concession agreements.
- Assessing whether ornottheoperator isfulfilling hisobligations under theconcession
agreement.
- Approving theconditions ofuseforthesupply ofpublic services.
- Settling disputes among operators attheadministrative level.
- Establishing procedural rules tobeapplied byoperators inorder tomeettheclaims
ofusers.
- Establishing general rules under which OSIPTEL candealwithcomplaints byusers
iftheyhavebeenrejected bytheoperators.
- Managing theTelecommunications Investment Fund (FITEL). Establishing the
regulations andrules governing itsfunctioning incoordination withtheMinistry of
Transport, Communications, Housing andBuilding, inaccordance withtherural
telecommunications development policy established bytheMinistry.
- Where appropriate, establishing plans, guidelines, criteria and/or accounting systems
thatmustbeapplied bytheoperators inconformity withtheirrespective concession
agreements where appropriate, obliging theoperator toprovide certain
telecommunications services through oneormore divisions, branches orsubsidiaries.
- Applying against theholders ofconcessions andindependent operators ofpublic
telecommunications services, aswellastheusers ofsuchservices where necessary,S/NGBT/W/3/Add.35
Page19
thepenalties laiddown inthelawforviolation oflegalorcontractual regulations within
theareaofcompetence ofOSIPTEL.
Itsnon-exclusivefunctionsincludearbitrationofdisputesamongoperators,advicetotheMinistry
ofTransport, Communications, Housing andBuilding withregard tothegranting ofauthorizations,
permits orlicences, when sorequested bytheMinistry, andensuring thesatisfactory standardization
andapproval oftelecommunications equipment andapparatus, incoordination withtheMinistry of
Transport, Communications, Housing andBuilding.
3. Howmany levels ofgovernment (e.g., national, regional, state, local) haveresponsibility for
regulationaffectingbasictelecommunications?Pleaseidentifyanddescriberelevantlevelsofgovernment
authority. Arethereanyprocedures enabling suppliers toresolve questions ordisputes theymayhave
ortoappeal adecision withtheregulatory body concerned? Ifso,please describe.
Theareaofjurisdiction oftheMinistry ofTransport, Communications, Housing andBuilding
andOSIPTEL covers thewhole ofPeru.
Asmentioned above, OSIPTEL isresponsible forsettling disputes among suppliers andfor
thispurpose itissues regulations onthesettlement ofdisputes, which allow fortheestablishment of
ordinary associate bodies forthesettlement ofsuchdisputes andprovide procedures fortheconciliation,
administrative andpossible judicial stages.
Frequency allotment orassignment
4. What aretheprocedures, requirements andcriteria applied fortheallotment orassignment
ofradio frequencies?
TheMinistry ofTransport, Communications, Housing andBuilding isresponsible for
administering, assigning andcontrolling theradio frequency spectrum and,ingeneral, forevery aspect
concerning theradio spectrum.
TheMinistry administers theradio frequency spectrum according totheNational Frequency
Assignment Plan, which istheregulatory technical document showing thetables fortheallotment of
frequencies totelecommunications services, together withthegeneral technical rules governing use
oftheradio spectrum.
TheNationalFrequencyAssignmentPlanisdrawnupandapprovedbytheMinistryofTransport,
Communications, Housing andBuilding.
Useoftheradiospectrumissubjecttoaconcessionorspecialauthorizationforthecorresponding
telecommunications service, after therequirements laiddown intheGeneral Regulations ofthe
Telecommunications Lawhavebeencomplied with.
Holders ofconcessions orauthorizations mustpayanannual feeforthecommercial exploitation
oftelecommunications services amounting toone-half percent(0.5%) ofgross turnover invoiced and
earned annually.
5. Doforeign telecommunications suppliers receive national treatment under these procedures
andcriteria?
Yes,foreign suppliers receive thesame treatment asdomestic suppliers.S/NGBT/W/3/Add.35
Page20
Numbering andidentification codes
6. What aretheprocedures, requirements andcriteria usedtoassign numbering andidentification
codes?
InitsNational Telecommunications Plan,theMinistry ofTransport, Communications, Housing
andBuilding provides forallthebasictechnical plans suchastheRouting Plan, theTransmission Plan,
theSynchronization Plan, theSignalling Plan, theNumbering Plan, theTariff Plan andthe
Telecommunications Service Quality andSafety Plan.
Themaincriteria aretosimplify therouting principles, tokeepdigital analysis atmanageable
levels, toachieve amore comprehensive andpowerful system ofcodes soastosimplify theiruse.
7. Doforeign telecommunications suppliers receive national treatment under these procedures
andcriteria?
Yes,foreign suppliers receive thesame treatment asdomestic suppliers.
Standards, typeapproval andequipment attachment
8. What types ofmandatory standards areinplace?
Itistheresponsibility oftheMinistry ofTransport, Communications, Housing andBuilding
tofixandapprove thetechnical specifications forthetypeapproval oftelecommunications equipment
andapparatus, taking intoconsideration thetechnical standards oftheInternational Telecommunication
Union (ITU), andalsotoissue therelevant approval certificates.
9. When astandard isunder review oranewstandard isbeing developed byyourstandards
authority, isthereanopportunity forpublic review andcomment priortoitsadoption? Mayforeigners
participate inthisprocess? Maytheprivate sector participate inthedevelopment ofstandards? If
so,how?
Under theGeneral Telecommunications Law, telecommunications standards arepublished in
theOfficial Journal forcomments andremarks byinterested persons andthepublic generally.
Mechanisms alsoexistforthepossible holding ofpublic hearings toreview published standards.
There arenorestrictions ontheparticipation offoreigners intheprocedures mentioned inthe
preceding paragraph.
10. What equipment issubject totypeapproval? Isself-certification allowed? Hasyourgovernment
concluded mutual recognition agreements fortelecommunications equipment certification? Arethey
required forforeign-produced equipment?
Article 63oftheTelecommunications Lawprovides thatallequipment orapparatus tobe
connected toanetwork inorder tosupply anytypeofservice musthavethecorresponding typeapproval
certificate granted bytheMinistry ofTransport, Communications, Housing andBuilding.
ThePeruvian Government hasnotconcluded anyagreement onthecertification of
telecommunications equipment.
According toArticle 35oftheTelecommunications Law, private individuals havetheright
topropose theregulation ofnewservices.S/NGBT/W/3/Add.35
Page21
11. Howistheability toattach terminal equipment tothenetwork regulated? What restrictions
arethere onterminal equipment thatmaybeattached tothenetwork?
Inaccordance with Article 16oftheTelecommunications Law, Supreme Decree
No.013-93-TCC, published on28April 1993, terminal equipment tobeusedintelecommunications
end-services maybeacquired freely byusers fromtheentity supplying theservice oranyother entity
provided thattheoptimal conditions forconnection tothenetwork aremet.
Thedefinition ofequipment thatconstitutes partofcarrier services andofterminal equipment
ispending.
12. Maybasictelecommunicationssuppliersconnectedtothepublicnetworkusetheirownswitches?
Thepolicy isthatinterconnection ofnetworks andservices iseffected among suppliers who
holdtherelevant concession. Ifthisisnotthecase,itistermed connection. Asupplier oflocalcarrier
services basically provides themeans ofinterconnection.
Basic telecommunications suppliers mayusetheirownswitches.
13. Does thegovernment require network-based suppliers topermit theattachment of
customer-supplied terminal equipment?
Asalready mentioned, Article 16oftheTelecommunications Lawspecifies thatterminal
equipment tobeutilized maybefreely acquired byusers fromtheentity providing theservice orfrom
anyother entity, provided thattheconditions foroptimal connection tothenetwork aremet.
Interconnection
14. Ingeneral, howisinterconnection regulated inyourregime? What aretheregulations applied?
Inaccordance with Article 7oftheTelecommunications Law, theinterconnection of
telecommunications networks andpublic telecommunications services isofpublic andsocial interest.
OSIPTEL isresponsible forregulating allaspects ofinterconnection.
Suppliersinterestedininterconnectionmayfreelynegotiatetheconditionsoftheirinterconnection
technical project, taking intoaccount technical aspects, thelocation oftheinterconnection point, the
quality oftheinterconnection, access charges, sanctions andpenalties interalia.
Ifthesuppliers donotreach agreement, attherequest oftheparties orexofficio OSIPTEL
maydecide upontheaspects thatwerenotagreed, theprovision oftheinterconnection infrastructure
maybegiven tothesupplier whooffers thebestfinancial terms, availability ofsupply andquality
ofservice.
Theregulations applicable inPeruaretheTelecommunications Law, theGeneral Regulations
oftheTelecommunications Lawandtheregulations issued byOSPITEL inthisarea.
15. Doyourregulations require network-based suppliers toprovide interconnection forother basic
telecommunications network orservices suppliers? Ifso,please describe.S/NGBT/W/3/Add.35
Page22
Article106oftheGeneralRegulationsoftheTelecommunicationsLawstatesthatinterconnection
among public telecommunications networks isofpublic andsocial interest andisthusmandatory.
Interconnection isanessential pre-condition foraconcession.
Article 108oftheRegulations states thatinterconnection ofpublic telecommunication services
mustbemade inaccordance withtheprinciple ofequal access, according towhich operators ofpublic
telecommunicationsservicesmustbeinterconnected,afterreachingagreementonthetechnical,financial,
tariff, market services andother aspects, subject tothesame criteria foralloperators ofservices of
thesame typewhomake arequest. Thepublic telecommunications network doesnotnecessarily have
tobeinterconnected withtheprivate telecommunications networks. Interconnection among private
networks isnotallowed.
Article 109oftheRegulations states thatinterconnection agreements mustbeinwriting and
must becompatible withtheprinciples ofimpartiality, non-discrimination andequal access. They
mustbeimplemented according totheterms andconditions negotiated ingoodfaithbetween theparties.
Interconnection contracts aresubject totheprovisions oftheTelecommunications Law, itsRegulations,
special regulations, thebasic technical plans intheNational Telecommunications Plan, andthe
requirements laiddown byOSIPTEL.
Interconnection contracts should include thefollowing details:
1. Interconnection capacity andestimates forthefuture sothatsignals traffic among the
networks isofreasonable quality;
2. Thenetworks 'connection points;
3. Dates andduration oftheinterconnection;
4. Characteristics ofthesignals transmitted orreceived, including thearrangements for
routing,transmission,synchronization,signalling,numbering,tariffs,qualityofservice
andsafety oftelecommunications;
5. Guarantees bybothparties onmaintaining thequality ofservices supplied through
interconnected networks;
6. Tariffs andfinancial terms fortheinterconnection, taking intoaccount costs anda
reasonable margin ofprofit;
7. Dateortime-limit forrevision oftheterms ofthecontract.
Attherequest ofeither oftheparties, OSIPTEL maytakepartinthenegotiations inorder
toassist inreaching anunderstanding andagreement. Themeasures necessary toensure thattheparties
meetthetime-limits laiddown must alsobeadopted.
Asmentioned above, local, domestic orinternational carrier service suppliers provide themajor
partoftheinterconnection infrastructure. Carrier services mayuseswitched ornon-switched networks.
16. Isinterconnection between leased circuits andpublic datanetworks permitted?
According toPeruvian legislation, interconnection isthejoining oftwoormore networks that
aretechnically andoperationally compatible andbelong tooneormoreholders ofconcessions forpublic
telecommunications services withtheobjective ofcarrying communications signals among them.S/NGBT/W/3/Add.35
Page23
Leased circuits arenotdeemed tobepublic telecommunications services butaform of
exploitation ofcarrier services.
17. What aretherulesandregulations regarding thepricing ofinterconnection? Areinterconnection
charges setinrelation toanyprinciples (e.g. cost-oriented)? Isthere arequirement tosubmit
interconnection charges toaregulatory body forapproval? Arethese charges inthepublic domain?
Arethesame interconnection charges applied toallsuppliers requesting interconnection orarethey
negotiated onacase-by-case basis? What requirements orobligations existtopublish, make publicly
available, ortosupply details ofinterconnection agreements toregulatory authorities?
Thepolicy isthatsuppliers wishing toconclude aninterconnection agreement freely negotiate
thetechnical andfinancial terms relevant totheirinterconnection technical project andtransmit itto
OSIPTEL forapproval.
Access charges must bebased oncosts plusamargin ofprofit.
Access charges mayinclude thefollowing:
- One-off access charges;
- monthly maintenance charges; these maybepaidbythesupplier ofthelocalcarrier
service;
- traffic charges foruseofeachnetwork belonging toeachofthesuppliers thatare
interconnected.
Regarding supply oftheinterconnection infrastructure, suppliers maysubmit theirterms to
auction withaviewtodeciding upon theinterconnection infrastructure thatoffers thebestfinancial
terms, themost satisfactory delivery timeandthebestquality.
Ifthesuppliers cannot reach agreement, OSIPTEL mayfixtheaccess charges attherequest
ofaparty orexofficio .
Itisalsoprovided that,ifasupplier concludes aninterconnection contract withaccess charges
thataremore favourable thanthose fixed inprevious contracts, themore favourable charges will
automatically beextended tosuppliers whohadalready signed interconnection contracts.
Interested persons mayrequest information oninterconnection fromexisting suppliers andfrom
OSIPTEL.
Competitive safeguards
Whatkindsofsafeguardsdoesyourregimehaveagainstanti-competitivepracticesofmonopolies
ordominant suppliers insituations where theymaycompete withother firms tosupply certain basic
telecommunications inthedomestic market? -intheinternational market?
Article 6oftheTelecommunications Lawprovides thattheStateshallpromote freecompetition
(libre competencia) inthesupply oftelecommunications services, regulate themarket inawaythat
ensures itsnormal operation, monitor theeffects ofmonopoly situations, prevent restrictive practices
andagreements duetothedominant position ofaparticular enterprise orenterprises inthemarket.
TheState alsopromotes theinvolvement ofusers oftelecommunications services infixing charges
andinthesupply andmonitoring oftheservices.S/NGBT/W/3/Add.35
Page24
OSIPTEL isresponsible forensuring faircompetition inthetelecommunications market and
forthispurpose itlaysdown regulations governing theconduct oftheoperators onthebasis ofthe
principles ofequity, non-discrimination, impartiality andfreeandfaircompetition.
19. Doyourregulations distinguish between dominant andnon-dominant supplier? Ifso,what
arethedetails andhoware"dominant" and"non-dominant" defined? Arethere anysafeguards
concerning suppliers whohavemonopoly ordominant control ofaccess tocertain market ornetwork
segments?
Theterm"abuse ofadominant position" isunder study andthedefinition ofcriteria forits
identification ispending.
Asalready mentioned inconnection withLawNo.26285, localfixed-voice telephone services
anddomestic andinternational long-distance carriers aresubject tolimited competition untilJune1999.
20. Isthere anindustry-wide anti-trust policy and/or anytelecommunications-specific anti-trust
policy? What aretherules andregulations regarding mergers andacquisitions?
LawNo.26285,publishedon12January1994,providesforgradualterminationofthemonopoly
oflocal fixed-voice telephone public telecommunications services anddomestic andinternational
long-distance carrier services byestablishing aperiod oflimited competition during which theseservices
willbeadapted toafreecompetition (libre competencia) regime. Diffusion services, various forms
ofmobile telephone services, pagers, public pay-phones, value-added services andlocalcarrier services
arenotincluded within thescope ofthisLaw.
Peruvian legislation doesnotcontain anyregulations onfreecompetition (libre competencia)
inrelation toamalgamations ormergers ofenterprises. There areregulations, however, oncollusion
practices orabusive practices onthepartofanenterprise withadominant position.
21. Arethere anysafeguards concerning basic telecommunications suppliers alsoengaged inthe
manufacturing oftelecommunications equipment? Ifso,please describe thecontent andworking of
these safeguards.
No.
Pricing-related measures
22. What istheroleofthegovernment oranyrelated agency withregard toestablishing prices
(e.g., tariffs, access charges, accounting rates) orpricing policy? Forexample, doesthegovernment
setprices oraccounting rates, directly orindirectly (e.g., price cutsorrateofreturn controls), ordo
basic telecommunications suppliers determine these themselves? What requirements orobligations
doesthegovernment setregarding prices charged bymonopoly/dominant suppliers? -orothersuppliers?
According toArticle 67oftheTelecommunications Law, Supreme Decree No.013-93-TCC
published on28April 1993, enterprises holding public telecommunications service concessions may
freely fixtheirtariffs provided thattheydonotexceed theprice capssetbyOSIPTEL. Thelatter
isresponsible fordrawing-up andapproving theapplicable system ofprice caps.
OSIPTEL maydecide nottosetpricecapswhen competition among enterprises results infair
prices totheuser'sbenefit. Article 68oftheLawstates thatthefixing ofprices forthesupply of
value-added services isfreeandisregulated bysupply anddemand.S/NGBT/W/3/Add.35
Page25
23. DoestheGovernment require tariffapproval ornotification and,ifso,whataretheprocedures?
What requirements regarding cost-accounting areputinplace toensure transparency?
OSIPTEL setspricecapsand,provided thattheydonotexceed thecapsset,suppliers ofservices
arefreetofixtariffs.
Forfixedlocalvoice telephone services anddomestic andinternational long-distance telephone
callsthepricecapsareweighted averages and,inaccordance withthetariffreadjustment programme,
therearequarterly revisions. Thesupplier mustpublish thenewtariffs tobeapplied before theyenter
intoeffect inawidely readnational newspaper.
Thetariff readjustment programme istaken intoaccount inthecorresponding concession
agreements andisexpressed insoles (Peru'snational currency) atFebruary 1994 ratesinthemonth
ofDecember eachyearuntil1998. Themodel isaformofpricecapandtakes intoaccount anannual
productivity figure of2percent; itisindexed totheconsumer price index formetropolitan Lima
andisexpressed inthecurrent rateofsoles. Thereadjustment programme permits theprogressive
elimination ofcross-subsidies.
Article 37oftheTelecommunications Lawprovides that,inaccordance withtheprinciple of
impartiality, companies supplying telecommunications andholding concessions orauthorizations to
supply twoormore telecommunication services simultaneously areobliged tokeepseparate accounts
fortheiractivities.
24. Towhatextent istheprinciple ofnon-discrimination applied inpricing policy? E.g., isatariff
package suchasavolume discount targeted foraspecific group allowed and,ifso,whataretheterms
andconditions applied? What arethecriteria usedtoarrive atdifferent accounting rates? Aresome
ofthese criteria required ordefined bythegovernment?
Article 8oftheGeneral Regulations oftheTelecommunications Law, Supreme Decree
No.06-94-TCC published on18February 1994, specifies thataccess totheuseandsupply of
telecommunications services issubject totheprinciple ofnon-discrimination, therefore, enterprises
supplying suchservices, according toavailable supply, maynotdenytheservice toanynatural orlegal
person whomeets theconditions laiddown fortheservice.
Yes,thereispriceflexibility andthepossibility ofgiving volume discounts toaspecific group.
Inaddition, Article 6ofOSIPTEL 'sRegulations, Supreme Decree No.62-94-PCM published
on5August 1994, establishes thatthefollowing aresome oftheexclusive responsibilities ofOSIPTEL:
(a) Toestablish regulations governing theconduct ofoperators onthebasisofprinciples
ofequity, non-discrimination, impartiality andfreeandfaircompetition;
(c) where appropriate, toestablish guidelines, criteria and/or restrictions forenterprises
holding concessions forcarrier services when negotiating international operational
agreements, inparticular withregard toaccounting ratesamong enterprises, andto
ensure compliance withthem.
According toITUregulations, accounting rates arebased oncosts. Annex CtoITU
recommendation D.140 onguidelines forthebilateral negotiation ofaccounting ratesandinternational
telephone rateswastherefore approved thisyear. TheLatin American Tarification Group (TAL) does
notyethaveanapplicable costmodel.S/NGBT/W/3/Add.35
Page26
Nevertheless, under thetariffreadjustment programme, theaverage weighted charge perminute
forinternational telephone callsinsolesattheFebruary 1994rateshows aprogressive decrease from
3.934 to2.035 forDecember 1998, representing adecrease of48percent.
Atpresent, thedominant supplier hasfreely negotiated accounting ratesfortelephone traffic
withvarious countries.
25. Doanybasic telecommunications suppliers getinvolved insetting industry-wide tariffs?
Asmentioned above, OSIPTEL 'sBoard ofGovernors iscomposed ofsixmembers, three of
whom areappointed bytheGovernment andtheother three represent suppliers ofcarrier services,
suppliers ofend-services andusers respectively.
26. Onwhat basis areprices (e.g. tariffs, access charges, accounting rates) determined? What
concepts areapplied regarding costs? Isthereageneral principle applied regarding allocation ofcosts?
Iscost-oriented pricing ofbasic telecommunications usedorrequired bythegovernment? Ifnot,do
basic telecommunications suppliers usecost-oriented pricing?
Tariffs arebased onapricecapmodel. Thetariffreadjustment programme forlocal, domestic
andinternational fixed-voice telephone services includes anannual productivity factor of2percent,
deducted from thepercentage variation intheconsumer price index formetropolitan Lima.
Access charges forinterconnection arebased oncosts plusareasonable margin ofprofit.
27. Arethere anyrules specific tothepricing ofanewservice?
Seetheresponse toquestion 22.
Rights ofwayfortheconstruction ofinfrastructure
28. Arebasic telecommunications services suppliers permitted tobuild theirowninfrastructure
orfacilities? Ifso,what aretheprocedures andcriteria forauthorization tobuild infrastructure or
facilities? What aretheprocedures, criteria, limitations orqualifications applied withrespect tothe
granting ofortheavailability ofrights ofwayfortheconstruction ofinfrastructure orfacilities?
Article 18oftheTelecommunications Lawstates thatthesupply ofcarrier services or
teleservices, when theyareofapublic nature, implies thepossibility ofoccupying orutilizing public
property. Forreasons ofnecessity orpublic orsocial interest, theState may, onitsownbehalf or
onthatoftheholder ofaconcession whosorequests, impose mandatory obligations orexpropriate
inorder toinstall services, inaccordance withtherelevant legislation.
According toArticle 19oftheTelecommunications Law, Supreme Decree No.013-93-TCC
published on28April 1993, when networks fortheconduction oftelecommunications services have
togothrough anurban areaorareas ofhistorical, artistic orcultural interest, theymustbeplaced in
conduits thatarenotvisible, preferably underground.
29. Isnationaltreatmentextendedtoforeignbasictelecommunicationsuppliersundertheseprocedures
andcriteria?
Yes.S/NGBT/W/3/Add.35
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Inconnection withproperty, Peru'sPolitical Constitution provides thatwithin 50kms.ofthe
frontier foreigners maynotinanycircumstances directly orindirectly purchase orownmines, land,
woodland, water resources, fuelorenergy sources whether individually orasacompany, onpenalty
oftransfer oftherights thusacquired totheState.
Newtelecommunications services
30. Please describe anygeneral regulatory processes orprocedures thatapply todealing withthe
introduction of"new" telecommunications services. Prior toanyrelevant regulatory procedure having
beencompleted, isitnotpossible forsuchnewservices tobesupplied?
TheMinistryofTransport,Communications,HousingandBuildingdrawsupthedraftregulations
onanewtelecommunications service, taking intoaccount thecomments ofOSIPTEL, andsubject to
thelatter'sapproval transmits them totheExecutive forapproval intheform ofaSupreme Decree.
TheExecutive issues adeclaration stating thatthere isanewtelecommunications service for
incorporation intheGeneral Regulations oftheTelecommunications Law. Subsequently theMinistry
draws upthemodel concession agreement forthenewservice andtransmits ittoOSIPTEL foran
opinion, following which theMinistry, representing thePeruvian State, signs thecorresponding
concession agreement withthesupplier applying fortheconcession.
Itisnotpossible tosupply anewservice ifithasnotbeenregulated andgiven aconcession,
authorized orregistered inadvance, whichever isappropriate.
31. When anewservice becomes possible oravailable, whodetermines thestatus ofthenewservice,
(whether itisbasic orvalue-added) andunder whatprocedure andtime-frame?
TheMinistry ofTransport, Communications, Housing andBuilding isresponsible forthis.
Asalready mentioned, value-added services donotrequire aconcession andtheirtariffs are
free. Theonlyrequirement isregistration bytheoperator intherelevant register oftheMinistry of
Transport, Communications, Housing andBuilding.
Itispossible topropose anewservice totheMinistry ofTransport, Communications, Housing
andBuilding. Inthisconnection, Article 4oftheGeneral Regulations oftheTelecommunications
Lawprovides thattheMinistry maylaydown theprocedure forpublic hearings provided forin
Articles 5,17,24and137ofthesaidRegulations.