1. The Peruvian telecom market
Investor presentation
Lima, November 20st 2008
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Informe final. Setiembre 2007

2. Agenda
• The Peruvian telecom market
• Economic overview
• Industry overview
• Trends
The Peruvian telecom markets in the Latin American context: a “glocal” perspective.
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Investor presentation. Lima, October 10th 2008

3. Economic overview
Consistently stable growth
Peru vs. Latin America. Key economic indicators 2005-2007
12%
10%
8%
GDP real 6%
+5,9%
growth (%) 4%
2%
0%
N
C
C
B
A
P
o
P
h
B
e
o
a
c
a
U
E
g
C
v
S
V
P
o
n
u
u
M
r
E
n
r
e
a
G
r
r
H
c
l
l
i
i
s
r
n
u
o
e
a
x
20%
15%
Inflation (%) 10%
+6,6%
LatAm 5%
2005-07 avg
2005-2007 0%
2007
N
C
C
B
h
o
o
P
A
P
c
e
B
a
U
E
a
a
C
g
V
o
P
u
n
u
E
n
e
H
a
M
r
r
s
c
G
r
r
l
l
i
i
s
n
o
r
u
é
a
x
Source: World Bank, IMF, Central Banks
The Peruvian telecom markets in the Latin American context: a “glocal” perspective.
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Investor presentation. Lima, October 10th 2008

4. Desarrollos recientes
Crecimiento consistente de las inversiones
Perú. Inversiones 2002-2007e
(US$m, % sobre PBI)
TCC1: +17%
25 000 23% 25%
Impulso
20 000 20% especialmente
18% 18% 20% fuerte en los
15 000 18% 18%
últimos 2 años
10 000
15%
5 000
0 10%
2002 2003 2004 2005 2006 2007e
US$ miles m % sobre PBI
1 Tasa de crecimiento anual compuesta (TCC %) para el período
Fuente: BCRP, MEF
The Peruvian telecom markets in the Latin American context: a “glocal” perspective.
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Investor presentation. Lima, October 10th 2008

5. Agenda
• The Peruvian telecom market
• Economic overview
• Industry overview
• Trends
The Peruvian telecom markets in the Latin American context: a “glocal” perspective.
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Investor presentation. Lima, October 10th 2008

6. Industry overview
Consistent growth, mobile and broadband services drive
growth
Mercado telecom Perú Indicadores operativos 2T08
US$ 3 835m
Ingresos por servicio Magnitud Densidad
(2,9% de PBI)
2005-2008e (US$m, % TCC) operativa de mercado
TCC % 05-08 % del total
504
Telf fija 1% 13% 2,7m líneas 10%
515
256
Telf pública
239 -3% 6% 184 mil líneas 7 x cada mil hab.
823
Telf móvil 44% 53%
2 046 18,2 m líneas 66%
Larga 185
distancia 231 9% 6% 1 542 m min 84 min/mes
Internet 129
40% 8% 797 mil suscriptores 3%
masivo 299
Datos & 106
23% 5% 16,9 mil enlaces n.a.
internet corp 178
127
TV paga 20% 5% 861 mil suscriptores 3%
199 2005
64 2008e
Otros 32% 4% n.a. n.a.
129
Fuente: SIT A. Latina Ingresos totales 2008e del mercado telecom Perú
The Peruvian telecom markets in the Latin American context: a “glocal” perspective.
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Investor presentation. Lima, October 10th 2008

7. Desarrollos recientes
Crecimiento consistente de las inversiones telecom
Perú. Inversiones telecom 2002-2006
(US$m, % sobre ingresos telecom)
TCC: +15%
500 20% Superior
17% 17%
17% a estándar
400 15% 15% A. Latina:
15%
300
~12-15%
200
10%
100
0 5%
2002 2003 2004 2005 2006
Inversiones telecom I / ing telecom (%)
1 Tasa de crecimiento anual compuesta (TCC %) para el período
Fuente: Osiptel, BCRP, estimaciones propias
The Peruvian telecom markets in the Latin American context: a “glocal” perspective.
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Investor presentation. Lima, October 10th 2008

8. Industry overview
Market concentration
Peru & Latin America. Market share, by telecom service 2007 (%)
1% 1% 3%
33% 36%
51%
98% 39%
Fixed 22% Mobile
61%
26% 28%
L atA m P eru L atA m P eru
0,3% 0,4% 13%
4%
48%
80%
99%
Broadband 26% Pay TV 82%
26% 15%
5%
L atA m P eru L atA m P eru
TEF TMX / AMX Other
Source: TIS Latin America
The Peruvian telecom markets in the Latin American context: a “glocal” perspective.
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Investor presentation. Lima, October 10th 2008

9. Industry overview
Consistent growth, but still room for further expansion
Peru vs. Latin America. 2007
Penetration Peru & Latin America
(%) (% of GDP)
8%
69
%
Bol
6% Par
CentralAm
% of GDP
56% LA 4% Chi
4% Bra Mex
Ecu
Ven
Col Uru
Per (3%) Arg
15
2%
% 2,6 6,4
10% % %
2% 3%
0%
Fixed Mobile Broadband Pay TV 2,000 8,000 14,000
Average LatAm Per capita GDP (US$ PPP)
Source: TIS Latin America
The Peruvian telecom markets in the Latin American context: a “glocal” perspective.
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Investor presentation. Lima, October 10th 2008

10. Industry overview
Regulation agenda (1 of 2)
1. Competition
a.Pricing deregulation in LD (Automatic subscriber segment).
b.Mobile operator obligations for number portability
c. Revision of interconnection charges (capacity charge).
d.New maximum pricing for leased lines (going into effect).
e.Changes in the Quality Rules Manual (new indicators and administrative sanctions have
been included).
f. Infrastructure expansion: coordination with local governments to simplify administrative
activities.
g.Policy changes driven by the Peru-US FTA: infrastructure sharing, LLU, interconnection
among others
h.Minimize number of regulated services (“desclasificación”)
i. Voice over IP
The Peruvian telecom markets in the Latin American context: a “glocal” perspective.
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Investor presentation. Lima, October 10th 2008

11. Industry overview
Regulation agenda (2 of 2)
1. Universal access
a. Promote the development of a national backbone and broadband services.
b. Promote technological innovation
c. Payment of fees (“canon”) and contribution to FITEL according to minimized
classification of services
d. Obligations to the Emergency Communications System.
The Peruvian telecom markets in the Latin American context: a “glocal” perspective.
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Investor presentation. Lima, October 10th 2008

12. Agenda
• The Peruvian telecom market
• Economic overview
• Industry overview
• Trends
The Peruvian telecom markets in the Latin American context: a “glocal” perspective.
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Investor presentation. Lima, October 10th 2008

13. Trends
Convergence technology, regulatory, commercial:
everything over IP
In 2010, la mayoría de los operadores globales
habrá concluido su migración hacia un mundo de convergencia.
Source: Pyramid Research
The Peruvian telecom markets in the Latin American context: a “glocal” perspective.
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Investor presentation. Lima, October 10th 2008

14. Trends
Key takeaways
The Peruvian telecom markets in the Latin American context: a “glocal” perspective.
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Investor presentation. Lima, October 10th 2008

15. Trends
Convergence strategies. Mobile telephony in LA
Revenue from “data” representing
approx 14% of total
Revenue from “data” representing
approx 12% of total
TEF y AMX (11 countries)
Only TEF (2 contries)
Only AMX (2 countries)
None (2 countries)
Deployment of 3G networks
Source: TIS Latin America
The Peruvian telecom markets in the Latin American context: a “glocal” perspective.
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Investor presentation. Lima, October 10th 2008

16. Trends
Convergence strategies. Fixed telephony in LA
Convergence in services,
Telefónica and Telmex
drive competition
TEF y TMX (8 countries)
Only TEF (0 countries)
Only TMX (1 country)
None (8 countries)
Triple play package
Triple play package
Fuente: SIT América Latina, análisis propio
The Peruvian telecom markets in the Latin American context: a “glocal” perspective.
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Investor presentation. Lima, October 10th 2008

17. Trends
Convergence strategies. Mobile telephony in Peru
Now What comes next?
Broadband
mobile
Smartphone
devices
Texting
Voice
Time
Fuente: www.movistar.com.pe; www.claro.com.pe
The Peruvian telecom markets in the Latin American context: a “glocal” perspective.
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Investor presentation. Lima, October 10th 2008

18. Trends
Convergence strategies. Fixed telephony in Peru
Now What comes next?
Convergence
tecnologhy
Convergence
in services
Broadband
Voice
Time
Fuente: www.telefonica.com.pe; www.telmex.com.pe
The Peruvian telecom markets in the Latin American context: a “glocal” perspective.
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Investor presentation. Lima, October 10th 2008

19. Industry overview
Key takeaways
• The last few years have been quite favorable for the economy and the telecom sector in
Peru.
• Service coverage and penetration rates have grown considerably and in a sustained
manner. This is reflected in revenues. The highest growth services are broadband and
mobile telephony, in that order.
• Despite the growth of recent years, the penetration rates in Peru are still low, resulting in
a high degree of inequality, particularly between Lima and the rest of the country.
• Strong growth in the industry is foreseen over the next few years due to sustained
economic growth of the country, technological convergence (giving rise to disruptive
services: VoIP), and government policy promoting universal access and competition.
• Such growth will come through convergent business models developed by operators and
promoted by the government.
• The arrival of these business models under the umbrella of a national broadband
development model will contribute to the reduction of the digital gap in Peru, thus
bringing about further development of the country.
The Peruvian telecom markets in the Latin American context: a “glocal” perspective.
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Investor presentation. Lima, October 10th 2008