Connecting Rural Communities: How IPT is Transforming Peru's Digital Landscape

In an exclusive interview with TowerXchange, Alessandro Defilippi, Chief Technology and Information Officer at Internet Para Todos (IPT), delves into Peru's telecom tower market dynamics, ahead of TowerXchange Meetup Americas 2024. Defilippi emphasises IPT's pivotal role in enhancing connectivity, with a commitment to connecting millions of rural Peruvians and transforming towns into smart cities. He also hints at IPT's plans for expansion across Latin America. IPT was initiated by Telefonica and Meta (formerly Facebook) and is backed financially by BID Invest and CAF and operates a unique model.

Since its establishment in 2019, the company has made significant strides in expanding its network infrastructure, boasting 3,800 towers and 2,600 4G sites. This extensive network now provides 4G coverage to 3.8 million people across 18,000 towns. With a total investment of US$100mn in network infrastructure and quality enhancements, the company is marking its fifth year of operation in 2024.

Alessandro Defilippi will further elaborate on these topics during the panel discussion "TowerXchange Tech Talks | How technology can improve towerco operations" at TowerXchange Meetup Americas 2024.

According to regulator OSIPTEL, the Peruvian telecom industry faces a critical need for 36,695 new cellular base stations by 2025, a target which will be missed. New towers will only be possible through renewed investment. Additionally, forthcoming 5G spectrum licences are anticipated to include provisions for rural connectivity, aligning with regional trends. Despite challenges, local carriers such as Entel, Movistar, and Claro are intensifying investments in bolstering their 4G networks, with initiatives like Entel's recent RAN sharing agreement with Telefónica's Movistar showcasing collaborative solutions. Despite pandemic-induced economic shifts and political turmoil, Peru's telecom sector remains resilient, with tower companies steadily growing.

The market continues to show dynamism, and in April 2024, IHS completed the sale of subsidiary IHS Peru, S.A.C, to affiliates SBA Communications corporation. Initiatives like Telefónica's Internet Para Todos (IPT) project further underscore the industry's commitment to bridging connectivity gaps and providing solutions for Latin American markets.

Peru has around 36 million people and four major mobile network operators: Telefonica, Claro, Entel, and Bitel. While there are other players in internet services, these four operators dominate the telecom market. They work under a regular model, collaborating with companies like ours to deploy infrastructure and utilise passive infrastructure for their equipment. Market share among these operators has shifted over time. While Telefonica used to lead, the market is now more evenly distributed. The Peruvian telecom industry primarily targets urban markets, leaving rural areas underserved. This is where IPT saw an opportunity to not only connect rural areas but also create a viable business case for it.

Our main goal is to connect 6 million Peruvians in rural areas where even 2G service is lacking. We provide 2G, 3G, and 4G services under the name "Internet Para Todos." which means internet for all, for your non-Spanish speaking readers. Operating as a neutral host, we handle planning, engineering, deployment, and operation of rural telecom infrastructure. We collaborate with operators like Entel, Telefonica, and Claro to reach rural areas through a shared infrastructure model. Our vision is to continue expanding connectivity aiming to transform the served towns into smart cities.

IPT employs several strategies to achieve this. One key aspect is infrastructure sharing, where we share both passive and active infrastructure mainly using RAN Sharing to reach remote communities. We also utilise a smart capex model, investing capital where we foresee a high return on investment. Our in-house automation platform plays a crucial role in managing assets and performing routine maintenance. By automating processes, we ensure efficient coverage of the 18,000 towns targeted for connectivity.

In Peru, a regulatory model was established several years ago, allowing companies like IPT to deploy infrastructure without owning spectrum. IPT collaborates with other companies that possess spectrum, leveraging their infrastructure for expansion. This regulatory framework facilitated IPT's growth and was adopted by two other companies, albeit smaller ones. IPT engages with regulatory authorities to address challenges in rural areas, advocating for adjusted fees to support network expansion and investment. In Peru, a common project allocates a portion of spectrum fees for infrastructure deployment, crucial for enabling new operators to enter rural markets.

Our first and foremost goal is to deploy this passive infrastructure. That will allow our 4G deployment over that infrastructure. Using RAN Sharing it's shared among operators, but more importantly, it's tailored to meet their specific needs. We engage in joint capacity planning with operators in each town, ensuring that our project aligns with their profitability goals because, ultimately, they'll be paying for the service we provide.

Understanding their needs is crucial for us to design the infrastructure effectively. This involves not just deploying passive infrastructure, but also providing ancillary services like electricity, fencing, or civil works if necessary. Once the passive infrastructure is in place, we move on to the active part of the project. We install the necessary equipment, integrate it with the existing network, conduct rigorous testing, and ensure seamless integration with the operator's systems.

IPT has developed a full automation platform that collects real-time data from the network. By leveraging AI and machine learning algorithms, we analyse network behaviour and predict potential issues before they occur. This proactive approach allows us to perform routine maintenance and ensure the highest network availability, essential for profitability in rural areas.

I see a promising future for rural connectivity in Peru. With projects like ours, we aim to connect the 6 million Peruvians currently lacking access. Unlike urban areas, where operators have a clear business case, rural regions often get overlooked. That's where we step in, filling a crucial gap in the market. Our goal is ambitious but achievable: to connect 6 million Peruvians within the years. However, our vision extends beyond just providing 4G service.

We aim to transform these towns into smart cities, offering a comprehensive platform for development. This involves collaborating with various companies to implement essential systems like water monitoring, security, health, and education. In essence, we're not only bringing connectivity; we're empowering these communities to thrive in the digital age. Efforts are underway to replicate the IPT model in Colombia and expand across other Latin American countries.