New Regulator Head Faces Political Challenges

The new chief of Peru's telecoms regulator Osiptel, Guillermo Thornberry, faces political obstacles to the implementation of new policies, according to a former head of the watchdog.

Thornberry, who took up his post last week, told business daily Gestión that for the telecoms sector to continue to grow, Osiptel must be able to maintain its independence from other regulating bodies. The agency falls into the hierarchal structure of the transport and communications ministry MTC.

But the Osiptel chief must work with a board of directors, providing political challenges for Thornberry, according to former Osiptel director and president of consultancy Alterna Peru, Liliana Ruiz.

"He can have an agenda which he wants to achieve, but without the support of the others he won't be able to do it," Ruiz told BNamericas.

Another big challenge facing Osiptel is how to avoid confrontations between industry players and politicians, such as what happened last year with the renegotiation of the concession contract of fixed line incumbent Telefónica del Perú.

Congress attempted to eliminate fixed monthly charges that account for around 25% of the company's operating revenues, according to corporate ratings firm Fitch Ratings.

The issue of number portability is also on the horizon for the regulator, after the MTC announced a study recommending its implementation by 2010.

The principal need of the Peruvian telecom market is a sustained boost in the level of competition in order to lower rates for users and increase investment, Ruiz said."

Posted to the site on 14th February 2007