World Dialogue on Regulation

According to a Dow Jones report, Peru's telecommunications regulator Osiptel said that it would not intervene in Telefonica Moviles’ purchase of BellSouth Peru.

"The acquisition of BellSouth by Grupo Telefonica represents an act of horizontal concentration," Osiptel said in a newspaper advertisement.

With the purchase, Telefonica has about 73% mobile market share in Peru.

"Existing legislation in Peru doesn't explicitly establish control on acts of horizontal or vertical concentration in the telecommunications market, so the mentioned operation doesn't legally require the previous approval of Osiptel," the agency stated.

Osiptel said it will try to "prevent, correct and/or sanction" any possible regulatory violations.

"I get the sense that Osiptel is scared of the telecommunications companies," Congressman Yonhy Lescano said, adding that the nation's constitution prohibits monopolies or "dominant positions."

The second largest mobile operator is TIM Peru, with a 22% market share, according to the government. It is a unit of Telecom Italia Mobile. Nextel, a unit of NII Holdings, has about 5% of the market.

TIM Peru's general manager, Sergio Bartoletti, said that Peru's regulatory structure does not define what levels of concentration are allowed. He said that this lack of regulatory clarity would make it difficult to make more investments.

Intelecon Research & Consultancy Ltd. 15/11/2004