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FITEL fund supports Peruvian rural broadband

Peru's Universal Service Fund is launching a campaign to bring broadband to the country's rural backwaters. Designed ultimately to be taken over by an operator, the campaign is intended to benefit 1.5 million Peruvians in more than 3,500 isolated localities...

Peru's Universal Service Fund (FITEL) is launching a campaign to bring broadband to the country's rural backwaters. Designed ultimately to be taken over by an operator, the campaign is intended to benefit 1.5 million Peruvians in more than 3,500 isolated localities.

FITEL has designed a project called "Provision of voice and data services through broadband for rural localities in Peru - broadband in isolated localities" (BAS). The project will be ultimately auctioned to an operator deploying broadband infrastructure to offer public telephony, residential telephony and access to internet under a 20-year licence. The project has national coverage, and will benefit approximately 1.5 million inhabitants located in 3,539 isolated rural localities distributed in 24 departments or regions.

FITEL is endowed with 1% of gross revenues billed and earned by telecoms operations in Peru. FITEL finances telecommunications projects in rural areas and those places considered to be of preferred social interest through subsidies given to a private operator. After the technical requirements of a project are specified, subsidies are awarded through public tenders. The subsidy is awarded to an operator that asks for the lower subsidy to undertake the project and meet the requirements.

As of 2007, the fund has been under the charge of the Ministry of Transport and Communications (MTC). In this sense, the current project is related to the politics of the sector defined by the Ministry and, at the same time, responds to the requirements of other sectors that need telecoms services and infrastructure. The BAS project will be jointly funded by resources from FITEL and the operator(s) that win(s) the tender subsidy. In turn, the estimated subsidy may be approximately US$ 51 million. Payment of the subsidy will be carried out by several instalments during the first five years of the operation.

The project has also been designed with an approach geared to technological convergence in order to give multiple services over a platform of satellite broadband. Nevertheless, another type of technology can be used as long as the operator complies by providing the following services to the 3,539 localities: 867 telecentres (cabinas), 2,776 payphones and 462 facilities for residential telephony.

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