British telecommunications provider Virgin Mobile will become Peru’s first mobile virtual network operator in the first quarter of 2016.
Peru’s communications ministry announced it has granted a 20-year license to Virgin Mobile in anticipation of the coming into effect of a law which allows for mobile virtual network operators (MVNO) to operate in Peru.
Unlike traditional telecom companies, MVNOs do not own the networks their clients use for phone calls, text messages and internet services. Instead they sell services to customers using space from other companies’ networks rented at wholesale prices.
“Virgin Mobile plans to invest about $30 million in the first quarter of 2016,” said Gonzalo Ruiz, president of Peru’s telecommunications authority OSIPTEL. “It will increase the competitiveness of the sector with new offers.”
As Peru’s communications ministry finalizes the legislation allowing for MVNOs, which was originally scheduled to publish this month, Virgin Mobile will look to sign service contracts with each of Peru’s existing telecommunications companies. The company will also begin training a local sales force to execute its marketing plan for the Peruvian market.
“We will enter with prepaid voice and data products, but focused on good service for young audiences,” Virgin Mobile Latin America chairman Phillip Wallace told El Comercio. Wallace added that his company looked to win 3% to 4% of the Peruvian market.
“We are ambitious. We had that same goal for Mexico, Brazil and Colombia, where we already do very well. We are by far the largest mobile virtual network operator in Latin America.”
In addition to targeting young consumers with products tailored to social media and instant messaging apps, Virgin Mobile has launched aggressive campaigns to entice users to transfer their existing phone numbers from other services.
The arrival of Virgin Mobile, whose slogan in Latin America is “No contract, better service,” is expected to put downward pressure on pricing while improving service at Peru’s current telecommunications companies.
While Peru had one of the region’s least competitive telecommunications markets five years ago, the law allowing MVNOs as well as another making it easier for users to keep their phone numbers while transferring services are expected to make the country one of the region’s most competitive.
Since entering the market in 2013, the Chilean Entel and Vietnamese Bitel have taken market share away from the established players, Telefonica and Claro.
Sources
Quinto operador de telefonía móvil entraría antes de marzo del 2016 (Andina)
Virgin Mobile invertirá US$ 30 millones en I trimestre y lanzará nuevas ofertas (Andina)
Concesión para operaciones de Virgin Mobile será por 20 años (El Comercio)
¿Qué falta para que Virgin Mobile opere en el Perú? (El Comercio)
Virgin Mobile se convirtió en el quinto operador móvil del Perú (El Comercio)
Con ingreso de Virgin Mobile habrá impacto en menores tarifas (El Comercio)
View Comments (2)
I am 100% in favor of more competition in Peru. My experiences with Claro is that they could care less about customer service - especially to an expat/gringo. I then tried Novistar/Telefonica and they would not honor their guarantee on the battery of the phone.
After 5 months, the battery would not hold a charge and they told me this was NOT covered under warranty. I had no one that understood Spanish to decipher the fine print of the contract - so I was disappointed again. No use filling out a complaint using the Libro de Reclamaciones, as I have realized that big companies do not have to follow the rrules with Indecopi.
I like thee business savy of Richard Branson and his companies. I will buy the no contract plan when it becomes available. Thanks Colin for your continued outstanding reporting for us expats/gringos here in Peru.
Virgin Mobile don't arrived here in Brazil yet; despite, they have an agreement with Telefonica/Vivo to do it since 2014. By the way, you all forgot about Virgin Mobile Chile, it's the first operation of the company in the Latin America!