Peru’s government ought to bring down the cost of mobile telephony spectrum to enable the entry of a new operator in the market, GSM association 3G Americas director for Latin America and the Caribbean, Erasmo Rojas, told BNamericas.

“Operators said that the initial price for mobile spectrum in Peru is too high. Operators entering a new market have significant costs at the beginning of the operation. This is why we believe that the government could reduce the price of the mobile spectrum to enable the entry of a new company,” Rojas said.

The government attempted to award 25MHz of spectrum in the 1,900MHz band last year. However, the tender did not attract any bidders. The minimum bidding price set at the time was US$14.8mn.

Rojas said that a new operator would need to deploy nationwide infrastructure – which requires a sizeable investment above and beyond the amount paid for spectrum – to be in a position to compete with existing operators.

“With the launch of mobile telephony services by Nextel, Peru now has three mobile operators with nationwide operations. This is a difficult scenario for a new operator looking to enter the market, also taking into account the already high penetration of mobile services in the country,” he said.

The government is confident that it will finally attract a fourth mobile telephony operator this year, according to previous press reports.

State agency for promoting private investment ProInversin is working to launch a new bidding process this year. However, the timeline for the process has yet to be defined.

In last year’s failed tender process, ProInversin had decided to extend the bidding timeline as the two prequalified companies – Kuwaiti firm Hits Telecom and local telco Americatel – declined from presenting economic offers due to the lack of financing as a consequence of the global economic crisis.

Peru’s current operators are Movistar of Spain’s Telefnica (NYSE: TEF), Nextel of NII Holdings (Nasdaq: NIHD) and Claro of Amrica Mvil (NYSE: AMX).

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