Peru: ip telephony and the Internet

This case study has been prepared by Arturo Briceno <abriceno@spri.com> of Strategic Policy Research <http://www.spri.com>, with the collaboration of Juan Carlos Bisso <jbisso@osiptel.gob.pe> and Agustina Guerrero <agustina@baedigital.com.ar> “Peru: IP Telephony and the Internet” forms part of a series of telecommunication case studies produced under the New Initiatives programme of the General Secretariat of the International Telecommunication Union (ITU). The telecommunication case studies project is directed by Dr. Ben A. Petrazzini <Ben.Petrazzini@itu.int>, telecommunication policy consultant of the ITU Strategies and Policy Unit. Other cases – including studies on IP telephony in China, Colombia and Thailand, – can be found on the website <http://www.itu.int/iptel>.

1Introduction

“APLIO” is an apparatus that facilitates the transmission of telephone calls via the Internet, using the Internet Protocol (IP) suite.¹ While both the calling and called parties must have a telephone line and active Internet connection, a computer is not necessary. Rather, APLIO allows the caller to use an ordinary telephone. The telephone is plugged into the APLIO device, which itself is plugged into a standard telephone jack. Thus, any telephone subscriber who also has Internet access can make long distance and international calls via IP telephony. At the time of the complaint, however, RCP was only authorized to provide value-added services, Internet access being one of them. It had no legal authorization to offer long-distance or international telephone service.

Several months after the complaint was made, OSIPTEL issued a ruling stating that no licence was required for marketing the APLIO device, and that RCP, like other bodies marketing the same equipment, was not contravening any regulations or the terms of any existing licences by doing so. In addition, marketing the equipment could not be deemed to be equivalent to providing the long-distance telephone service.

At this time, the subject of IP telephony was the focus of heated discussions in various forms outside telecommunication circles. A pronouncement from a state body, in this case OSIPTEL, was necessary since even limited awareness of this new service was giving rise to all sorts of comments. Some opinions emphasized the tariff advantages for the user, who would now have a much cheaper alternative to traditional long-distance telephony. Others discussed the subject of quality in voice transmission and the possibility of putting switched telephony in its place, while others ventured to discuss the legality or otherwise of offering such a service in Peru.

Even though the ruling issued by OSIPTEL in the APLIO case gave an early hint of the direction which state policy might follow on the matter of IP telephony in the future, TdP successfully pursued a legal strategy to nullify its effect. This prevented the establishment of a legal precedent on the matter. Regrettably, therefore, the various opinions about IP telephony are still circulating a year later, and there is no expectation of an explicit, formal pronouncement from any telecommunication authority in the near future.

In spite of this, the situation has changed somewhat since the time the complaint was made, in that there are now numerous other companies offering voice over IP (VoIP) services, or planning to do so soon.² A large group of those firms are new licence holders for long-distance or local telephony. Thus, although the subject has not been defined in legal terms, the companies have opted to play it safe by obtaining licences to provide the service. The emergence of many new licensees, especially for long-distance telephony, has been made possible by the Ministry of Transport and Communications’ sensible policy of granting licences since the full liberalization started in August 1998. Under the new license policy adopted since then, practically any applicant can obtain a long-distance licence without incurring substantial monetary or transaction costs.

TdP’s monopoly in local and long distance telephony ended officially in August 1998. However a set of TdP’s dilatory practices have effectively delayed the beginning of the operation of new local and long-distance carriers. For instance, the first new long distance carrier began operation more than a year after liberalisation of the market. Local exchange carriers are still delaying their network deployment until the interconnection charge for local termination/operation is lowered from its current rate of 2.9 US cents a minute. As of May 2000, OSIPTEL, which has stated that it will issue an interconnection mandate, will set the new rate for local interconnection.

The subject of IP telephony relates closely to other aspects of the Peruvian telecommunication market. For this reason, a more detailed analysis of IP telephony in Peru is required, including the accelerated development of telecommunications in recent years, the appearance of new players in the market – Internet service providers (ISPs), new long-distance competitors, etc. – legal aspects, and the regulatory framework. Appendix A to this study covers more general aspects of telecommunications in Peru.