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Technology

Internet, mobile phones and television: national inequality

In Peru, a country with more than 31 million inhabitants, the population's access to communications technology is unequal, be it computers, smartphones, or Internet with access to different instant messaging applications, social media or video broadcasts. Urban areas, particularly Lima and some other coastal cities, have the greatest access to these kinds of technologies.

At the national level, for example, 36% of households have access to a computer and 32.9% to fixed-line Internet, according to the National Institute of Statistics and Informatics (INEI, as per its Spanish acronym). These figures fall away in rural areas, where just 5.5% of households access a computer and 1.3% can access the Internet.

The pattern is the same for access to cable television services provided by the main telecommunications companies: Telefónica, Claro and DirecTv. In Lima 41.4% of households have access to programming from overseas, whereas the figure in rural areas is only 9.9%.

However, inequality between urban and rural areas almost disappears when you verify Internet access through a mobile phone. According to INEI, 82.6% of inhabitants in Metropolitan Lima access this service via mobile phones, whilst this figure in rural areas is close to 71.2%.

Telecommunications market

Peru’s leading company in the telecommunications is Telefónica, best known for its Movistar brand. This Spanish–owned company arrived in Peru in the 1990s during a time of major international expansion. Today it has a significant presence in the national market, through its Internet services, cable television, and mobile line and fixed telephone lines.

According to the state regulator OSIPTEL (the Supervisory Agency for Private Investment in Telecommunications), Telefónica currently has a 38% share of the mobile telephony market. This company is followed by América Móvil Perú (Claro), with 32%; Entel, (the Peruvian subsidiary of the eponymous Chilean company), with 16.3%; and the Vietnamese company Bitel, one of the last operators to arrive in Peru (2014), with 13.5% share of the total market.

These companies are also responsible for the national distribution and sale of different smartphone brands including Apple (USA), Huawei (China), and Samsung (South Korea). No one single company dominates smartphone market; for example, in 2017 the leading brand was Samsung (22% of the total), following by Huawei (21%), and Apple (13.6%).

These figures show there to be almost no market concentration for mobile telephone equipment. This is not the case for the fixed-line and cable television markets, where, according to OSIPTEL’s statistics, Movistar has a clear domination, with a 74.5% and 51.6% market share respectively.

Technology giants and net neutrality

In addition to these big telecommunication companies in Peru, some of the world’s largest technology companies, such as Google and Microsoft, have offices in Peru. Facebook and Amazon only have subsidiaries in Latin America. The first operates in Lima through a headquarters dedicated to the sale of products and services over the Internet, as well as technical and professional advice on the Internet, and the sale of advertising. The second one is focused on marketing technology products.

In recent years, telecommunication companies have established a close business relationship with these technology and social networking giants through so-called Zero rating, a much criticized commercial practice used by operators such as Telefónica, Claro, Entel or Bitel to offer free or discounted Internet content for applications such as Facebook, Instagram, WhatsApp, and YouTube.

Zero rating has been questioned in the United States and in Europe because it violates net neutrality. It allows preferential treatment for companies such as Facebook and Google at the expense of emerging innovation companies, ultimately affecting the citizen's freedom of information. It also limits Internet access to only a small number of options, threatening the right to browse freely.

Zero rating became popular in Peru in 2014 with the arrival of Bitel. This company was one of the first to offer as part of its Internet data packages free and unlimited access to Whataspp, the world's leading messaging application. Subsequently, Telefónica, Claro, and Entel also began to include free navigation access to other popular applications as part of their packages.

Up to 10 applications with zero rating are currently offered, from the popular Facebook, Twitter, Instagram applications, to streaming services such as Netflix, or the real-time transit tool Waze, among others.

In 2015, a debate began the arrival in Peru of Facebook’s application free basics to Peru, an initiative that allows access to a limited number of restricted web pages free of charge. This business, also known as Internet.org, was questioned by civil society groups for violating the principle of net neutrality. To date, only users of Entel, Bitel and Claro can access the service.

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