GigaOM on the Road: Wireless Peru

Cusco, Peru — When I decided to take a week to trek the Andes in Peru, I didn’t expect to spend too much time behind a computer. A broadband connection, rampant signs of a rapidly developing cellular market and one quick photo was all that took to coax me online.

Like many other developing economies, Peru is bypassing the whole copperline and going completely wireless. A brutal price war between Telefonica and American Movil’s local subsidiaries is helping more and more Peruvian’s go wireless. The signs of this mobile war are visible even in the remotest villages.

I caught a glimpse of this hand-painted Claro sign — the flashy red cell phone brand pushed by Carlos Slim’s Mexican wireless carrier America Movil — on a wall in the rural Pisac village in Peru. Even a quiet street corner in a tiny village in Peru is the backdrop for a growing fight for cell phone subscribers across the country. Many residents in this town don’t have running water, but that doesn’t mean its safe from America Movil’s reported $200 million effort to sell wireless service in the country.

Peru only had 6.75 million cell phone users as of June, according to the country regulator Osiptel, which means only around 24% of the country’s inhabitants were cell phone users at that time.

But that number has been growing rapidly over the past few years. In 2004 15% of Peruvians were using cell phones, and at the end of 2005 that number was at just 20%.
Already over four million of Peru’s subscribers are signed up with Telefonica’s local brand, Movistar Peru. Claro has the rest, despite having launched in October 2005. (Claro, the brand, is also being used by America Movil Brazil and Chile.) Carlos Slim bought Telecom Italia Mobile’s Peru arm last August for EUR 407 million to get a running start in Peru.

America Movil is on a spending spree, looking to grow the Peruvian wireless market and potentially beat Telefonica. Check out the company’s slick commercial. In many other countries in Latin America the two companies are also battling for subscribers.

But America Movil seems particularly aggressive in Peru, in both cities and rural areas. Outside of the Lima airport the company tacked a massive billboard for Claro’s blackberry service, and in the downtown city of Cusco an upscale Claro store was selling the latest cell phone models. And this photo I took shows off some of Claro’s grass roots marketing efforts.

Alright, so I shouldn’t be working on a vacation, but sometimes the perfect image just jumps out.