Telecommunications Policy 36 (2012) 560–570

Contents lists available at SciVerse ScienceDirect

Telecommunications Policy
URL: www.elsevier.com/locate/telpol

Critical factors for the expansion of broadband in developing

countries: The case of Peru
Peter Yamakawa a,n, Gloria Cadillo b, Rubén Tornero c
a
Vice President for Research, ESAN University, Alonso de Molina 1652, Monterrico Chico, Lima 33, Peru
b
Lawyer—Interconnection Issues, OSIPTEL, Calle de la Prosa 136, San Borja, Lima, Peru
c
Principal Supervisor, OSIPTEL, Calle de la Prosa 136, San Borja, Lima, Peru

a r t i c l e in f o abstract

Available online 12 April 2012 Many studies have been made on the diffusion and development of broadband,
Keywords: however there are few published studies on the critical factors for advancing broadband
Broadband services in developing countries. Thus, the purpose of this paper is to understand and
Developing countries identify the critical success factors for the development of broadband services in a
Peru developing country context, using the case of Peru. In this regard, this study uses data
Critical factors collected from interviews with Peruvian telecommunications professionals, policy
Actor analysis makers and regional telecommunication experts, which is supplemented by official
reports and statistical data to determine the critical success factors for broadband in
this country. The four factors derived are; (i) expand the availability of infrastructure,
(ii) define a national broadband policy that aligns the interests of stakeholders, (iii)
develop effective competition in the broadband market, and (iv) stimulate the demand
for broadband services. Through a MACTOR analysis the authors found that the
objectives of sharing infrastructure, the further deployment of infrastructure and the
development of competition in the market for broadband services are those that
generate the most divergence between actors. Additionally, the MACTOR analysis
determined that no disagreement existed for the objectives related to demand
stimulation. Thus, four proposals are offered for the development of Peruvian broad-
band. The results are relevant for academics and policy makers interested broadband
development in developing countries and for rural areas of developed countries.
& 2012 Elsevier Ltd. All rights reserved.

1. Introduction

Broadband is a technology that is increasingly being recognized for its positive effects on the economic development of
countries (Bauer, Gai, & Kim, 2002; Crandall, Lehr, & Litan, 2007; European Commission, 2006; Lehr, Osori, Gillet, & Sirbu,
2006). However, more affluent countries tend to have more resources to utilize broadband services (Garcı́a-Murillo, 2005;
Jakopin & Klein, 2011). Nevertheless, there are indications that broadband provides developing countries with an
important stimulus for growth (Qiang, Rossotto, & Kimura, 2009) that brings with it the ability to create new business
opportunities, access to knowledge and to deliver health and education services (Kim, Kelly, & Raja, 2010).
A number of studies identify factors that explain the differences in the development of broadband across countries such
as social, economic or regulatory reasons (Petrović, Gospić, Tarle, & Bogojević, 2011; Trkman, Blazic, & Turk, 2008) or

n
Corresponding author. Tel.: þ 51 1 3177200.
E-mail addresses: pyamakawa@esan.edu.pe (P. Yamakawa), gcadillo@osiptel.gob.pe (G. Cadillo), rtornero@osiptel.gob.pe (R. Tornero).

0308-5961/$ - see front matter & 2012 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.telpol.2012.03.004
 P. Yamakawa et al. / Telecommunications Policy 36 (2012) 560–570 561

identify the key factors that favor the development of broadband for example technology competition, investment costs,
pricing and user readiness (Cava-Ferreruela & Alabau-Muñoz, 2006; Turk, Blazic, & Trkman, 2008). While others in turn
compare countries to find patterns to achieve a better understanding of the strategies and policies used by countries for
the development of broadband (European Commission, 2001; Frieden, 2005; Kim et al., 2010; Paltridge, 2010; Wu, 2004).
In terms of examples, many studies feature the successful developments of broadband with the cases of Korea, Japan,
Canada, Denmark and the United States, (Frieden, 2005; Industry Canada, 2010; Kim et al., 2010; Wu, 2004). There are also
analyses of the differences of emphasis placed by the respective governments for prioritizing broadband and supporting its
growth (Bouras, Giannaka, & Tsiatsos, 2009; Wu, 2004). However, these cases may have limited relevance for developing
countries as relative economic status creates different sets of priorities for the respective policy makers to address (Yoon &
Chae, 2009) and the factors which are conducive to broadband growth may not exist in developing countries (Kim et al.,
2010).
There are an increasing number of publications on broadband development in developing countries that highlight
factors such as infrastructure deficiencies (Fosu, 2011; Katz, 2009), fragile policy and institutional development
(Karunasena & Deng, 2012; Kshetri, 2008; Lin, Fofanah, & Liang, 2011), weak market regulation and competition (van
Gorp & Maitland, 2009) and underdeveloped demand stimulation or technology adoption (Brannstrom, 2012; Gospic &
Bogojevic, 2010).
Hence Peru, as a developing country, has a low broadband penetration rate of 3.27 percent (Supervisory Agency for
Private Investment in Telecommunications (OSIPTEL), 2010). This is one tenth of Sweden’s rate and in Latin America, Peru
only ranks ahead of Bolivia. However, the Government of Peru is aware of the importance of broadband technology and it
has embarked on a program to further develop this industry (Ministerio de Transportes y Comunicaciones, 2010).
Given that this work that has just started, it is timely to investigate the critical success factors (CSF) that would enable
Peru’s telecommunications industry to develop further. In order to discover these factors this study used the following
questions: (i) how has broadband in Peru developed (specifically detecting the barriers that slow down progress), (ii) what
contributed to the development of broadband in other countries (successful experiences and experiences in the region),
and (iii) what are the views of national and international experts on forming policies for the development of broadband.
From the answers, it was possible to identify the CSF for the development of broadband in Peru and to analyze the
relationships of the industry actors in terms of the factors.
Therefore, the paper has been organized as follows. The next section characterizes and discusses broadband in
developing countries and Peru. Section 3 provides the research methodology used for collecting and analyzing the data.
Section 4 presents the findings; first presenting the CSF found followed by the MACTOR analysis of actor interplays. Section 5
is a discussion of the findings and four proposals resulting from them. Section 6 is the conclusion.

2. Broadband in developing countries and Peru

In Peru, as its telecommunications regulations contain no definition of broadband, high-speed internet is commonly
called broadband. Similarly, as there is no universal definition of broadband (Howick & Whalley, 2007), for many people
broadband internet is generally considered to be a technology that provides faster than dial up speeds (Majumdar, Carare,
& Chang, 2009), enables people to send and receive emails, to surf the web, to download music, images and videos, to
participate in web conferencing and to perform activities such as accessing tele-education and tele-medicine (Howick &
Whalley, 2007). For the purpose of this investigation broadband will be defined as a service capable of transmitting data at
high speeds and allowing the use of interactive applications and to access the type of online activities referred to above.
Broadband’s growth effects are stronger in developing countries than in developed countries (Qiang, 2010) with
developing countries being technology followers benefiting from lower costs and technological leapfrogging (Andrés,
Cuberes, Diouf, & Serebrisky, 2010; Gospic & Bogojevic, 2010). Moreover, broadband provides the opportunity for
productivity improvements for firms (Majumdar et al., 2009), it provides aggregate spillover effects into the economy
(Qiang, 2010), it provides for new public services delivery options (Kim et al., 2010), its expansion creates new jobs (Katz,
2009) and its deployment speeds up economic development (Bogojevic, Gospic, & Petrovic, 2010). New broadband
technologies, such as 3–4 G and wireless are being suggested as an answer for developing countries due to weak
competition in their markets, limited numbers of fixed lines and fragile infrastructures (Fosu, 2011; Galperin, 2005;
Tanguturi & Harmantzis, 2007). Additionally, e-commerce in developing economies face barriers usually absent in
developed States (Yoon & Chae, 2009) in part due to the infrastructural and institutional barriers found in developing
countries, but also from consumer resistance and the digital divide (Bogojevic et al., 2010; Kshetri, 2008; Lau, Aboulhoson,
Lin, & Atkin, 2008).
Just providing improved access to a broadband service is not sufficient to ensure that the technology will be used
(Trkman et al., 2008). The broadband adoption literature provides insight into what Garcı́a-Murillo and Rendón (2009)
referred to as the problems of adoption in terms of people’s awareness and knowledge, their patterns and reasons for use,
access to skills, opportunities and resources and the nature and effects of costs (Brannstrom, 2012; Dwivedi & Irani, 2009;
Garcı́a-Murillo & Rendón, 2009; Hollifield & Donnermeyer, 2003; Lin et al., 2011; Tookey, Whalley, & Howick, 2006; Turk &
Trkman, 2012).
562 P. Yamakawa et al. / Telecommunications Policy 36 (2012) 560–570

Latin America is a continent with a limited wired infrastructure (Katz, 2009) and an uneven pattern of access to services
(Garcı́a-Murillo & Rendón, 2009). Thus, governments of the region are preparing policies and plans to address these
deficiencies (Gómez-Torres & Beltrán, 2011) with some progressing e-government initiatives (Lau et al., 2008).
Peru’s recent telecommunications policies have been focused on shifting from a State monopoly to a competitive
market; beginning with the creation of a telecommunications regulator Supervisory Agency for Private Investment in
Telecommunications in 1991. This was followed by the privatization of the amalgamated State telephone companies in
1994, sold to a consortia led by Spanish telecom Telefonica, which then enjoyed a 5 year period of limited competition
(Mariscal & Rivera, 2005). The telecommunications market opened up in 1998 and this was followed by strong growth in
mobile penetration, with the entry of a few new operators (Ministerio de Transportes y Comunicaciones, 2010). Broadband
in Peru is provided through fixed lines and mobile connections utilizing a fiber backbone. Fiber connections are limited in
Peru, with the coastal regions and only three highland cities currently being serviced. Further, regulatory intervention is
problematic. Peru is one of the few countries in the world where there is no ex-ante competition policy via the control of
market structures and therefore the business concentrations in the telecommunications sector are not subject to
assessment. Few ex-post competition investigations have been undertaken by the regulator and no interventions have
been made (Supervisory Agency for Private Investment in Telecommunications (OSIPTEL), 2010). There are also examples
of fragmented responses and missed opportunities across recent broadband projects (Comisión del Plan de Banda Ancha,
2010). Thus, the Peruvian broadband market remains highly concentrated and features relatively high prices compared
with others in the region (Comisión del Plan de Banda Ancha, 2010).

3. Methodology

This paper began with a review of the literature on global and Latin American broadband, official documents and
government websites to answer the study’s questions (i) and (ii). The authors used the technique of expert interviews to
provide further data to answer question (iii) and a system analysis tool to interpret the industry actor’s interplays. This
study uses primary data gathered from interviews, with reference to data from the literature and document reviews to
derive the CSF for Peru’s broadband development and to identify the interplay of the industry’s actors in relation to the
factors through an actor analysis.

3.1. The critical success factor method

Rockart (1979) presented the concept of critical success factors as ‘‘the limited number of areas in which results, if they
are satisfactory, will ensure successful competitive performance for the organization’’ (Rockart, 1979, p. 85). Caralli (2004)
adds that these factors are important for the organization to achieve its mission and if they are not present it is unlikely
that the goals of a project or policy implementation will be achieved (Pollard & Cater-Steele, 2009). To derive Peru’s
broadband CSF the authors followed Caralli (2004) process, presented as Fig. 1.

Documents Interview notes

Activity Statements

Affinity Groups Affinity Groups Affinity Groups

Supporting Supporting Supporting Supporting Supporting

Themes Themes Themes Themes Themes

CSF CSF

Fig. 1. Stages of derivation of the CSF.

Source: Caralli, 2004.
 P. Yamakawa et al. / Telecommunications Policy 36 (2012) 560–570 563

Table 1
Expert respondents.

Country Background Position Experience (years)

Peru Private industry Director regulation 420

Peru Private industry Manager of regulatory relations 410
Peru Private industry Director of network planning 410
a
Peru Private industry General manager 410
a
Peru Government Director regulation 410
Peru Government Head of development projects 410
a
Peru Government General manager 420
a
Peru Government Manager technology research 415
Peru Government Head of telecommunications projects 415
a
Peru Government Coordinator 410
Peru Civil society Broadband consultant 415
Peru Civil society Telecommunications consultant 410
Peru Academia Professor of telecommunication studies 420
Columbia Government Coordinator of external and client relations 410
Brazil Government Coordinator – regulatory group – national broadband plan 410
Mexico Government Decentralization coordinator and sub secretary for communications 410

a
Member of the Peruvian Broadband Commission.

During late 2010 and early 2011 in-depth interviews were designed and conducted with sixteen local and international
experts from the telecommunications sector, government and academia. The local experts were selected from
telecommunications firms, key State agencies, civil society stakeholders and academics in the field according to their
levels of industry experience, seniority, and their relative power or influence in the industry. Some of the respondents were
members of the Broadband Commission of Peru. For a wider perspective, officials from Mexico, Brazil, and Colombia who
were working on broadband development plans for their countries were interviewed. All of the experts had over 10 years
of experience, some having 20 years or more and hold range of technical and managerial qualifications. Table 1 provides
details of the expert respondents.
The respondents were interviewed in unstructured one and a half hour sessions, which focused on gaining information
regarding the respondent’s organization and role, relations with other industry actors and indications of future prospects
for industry development. The interviews provided a substantial volume of information which was organized by affinity
and thematically analyzed using precautions such as triangulation to reduce bias and improve validity (Maxwell, 2008) by
confirming data using official reports and statistics. The data enabled the researchers to fully assess the broadband
situation in Peru, allowing for the derivation of four critical factors. The data also provided the necessary actor and
industry information to undertake the MACTOR analysis.

3.2. The MACTOR analysis method

In order to make better sense of the implications of the CSF an additional analysis was undertaken of the
interrelationships of the main broadband actors. MACTOR is an acronym for a method developed by Godet (1996), which
determines the relative power and influences of key actors in a market, which uses software to facilitate the analysis.
MACTOR analysis can be used independently or in conjunction with the other system analysis tools and while the software
is simple and accessible, it has limitations especially regarding the input data. For example, when actors are reticent to
reveal their strategic intentions, assumptions of their behavior have to be used. This and the ease of generating lots of data
can divert the researcher’s attention away from producing quality results (Godet, Durance, & Gerber, 2008).
MACTOR analysis requires a sequence of steps that can be described in three stages where; (1) the industry actors and
strategic objectives are identified, (2) the data is entered into the software, by converting the qualitative data into proxy
values according to prescribed procedures, thereby producing a range of outputs and, (3) an analysis of the third order data
is used to make recommendations or proposals (Godet et al., 2008). While some of the MACTOR results will be obvious
Godet et al. (2008), suggest that unexpected or counter intuitive results provide the researcher with a clearer picture of
how the system functions. The MACTOR software produces a number of tables and charts as the sequence of steps
proceeds.

4. Findings

4.1. Critical success factors for broadband in Peru

Table 2 shows the results of the critical success factor method that were obtained. The four CSF were each derived from
a set of supporting themes and are either a supply or demand intervention type.
564 P. Yamakawa et al. / Telecommunications Policy 36 (2012) 560–570

Table 2
The critical success factors for the development of broadband in Peru.

Supporting themes Critical success factors Intervention

type

Develop new high-capacity infrastructure. 1. Expand the availability of infrastructure Supply

The sharing of infrastructure in areas with existing stock.
The release, redistribution and provision of spectrum.

A signal for the market players is required. 2. Definition of national policy for the Supply
development of broadband
Improve stakeholder of each other.
Sectoral coordination in search of synergies.

Improve the supply of services. 3. Development of effective competition Supply

Provide the best rates, access speeds and quality.
Enable improved services.

Reduce barriers to PC ownership and access. 4. Stimulating demand Demand

Improve prices and speeds for the consumer.
Progress innovation and value creation business models through the provision of
services and regulatory flexibility.
Improved content and applications availability.

The CSF are general in nature and all feature in the broadband literature over the last decade or so. Of more relevance
are the sets of supporting themes. These provide some key indicators for Peru by pointing to the issues of; increasing the
stock of high capacity infrastructure, improved sharing of current infrastructures and increased spectrum availability; a
policy that binds the industry and seeks stakeholder cooperation; competition reform that delivers improved access,
service quality and prices; and lastly, to improve broadband demand, adoption programs.

4.2. Actor relations and behaviors

The above CSF reveal that Peru’s broadband development relies on the actions of the industry actors. These actors have
diverse objectives some of which are not necessarily aligned with Peru’s CSF. To identify the actor’s interplays in terms of
the factors a MACTOR analysis of the industry was undertaken.
Adhering to the method outlined in Section 3.2 the authors first identified the Peruvian broadband actors, their
interests and objectives using the data collected from the interviews, the experts’ opinions and document examination.
Table 3 provides information on each actor, their role and its relationship to the CSF.
The next part of the MACTOR analysis is the setting of the strategic objectives (SO). As the goal of this MACTOR analysis
is to interpret the interplay of the actors in terms of realizing the Peruvian CSF, the authors chose strategic objectives based
on the supporting themes that had been identified through the CSF process (see Table 2). Accordingly, the strategic
objectives are described by terms such as infrastructure expansion and infrastructure management, costs and prices,
quality, access to equipment and ease of use, thus linking them to an appropriate CSF. The objectives were verified by
reviewing the data gathered from the experts and published reports, acknowledging that differing actor perspectives had
been received. The MACTOR strategic objectives are contained in Table 4.
Data is then entered into the MACTOR software, producing output in the form of data tables and figures. To keep the
focus on quality results, only the important third order data that is used to make the proposals will be provided here.
Expressed as the 3MAO matrix, this third order data positions the actor in terms of agreement and disagreement with the
strategic objectives. The data is presented in Table 5.
The results illustrate a pattern of actor agreement with the demand orientated objectives and indications of actor
disagreement over the supply orientated objectives. Table 5 shows that the objectives which have high disagreements are
infrastructure expansion and frequency assignment (SO1) and Shared Telecom Infrastructure (SO2) with the non
telecommunications sector actors (A3 and A5) being in disagreement. These objectives are related to the first CSF —
Expand infrastructure, a supply intervention. The objective, management of fiber optics (SO4) has a high disagreement
value given by the telecommunication firms (A1 and A2). Effective competition (SO8) only has disagreement from the
Dominant firm (A1), with objective (SO10) the enforcement of regulation, having disagreement from the telecommunica-
tion firms (A1 and A2). The high agreement objectives, develop more content and applications (SO6), reduce equipment
costs (SO5) and best value speed and prices (SO9) relate to CSF 4 — stimulate demand. There are four strategic objectives
that record no disagreement. These also relate to the fourth CSF — stimulate demand. The content and application
provider actor (A7) has no preferences with respect to the strategic objectives.
The software creates spatial maps of the third order data, which assist the identification of convergences and
divergences between the actor’s interests. The significance of the degree of convergence or divergence in the maps is
indicated by the proximity of the actors. These maps are useful for identifying the relativity of common actor interests
through the positions of the actors; indicating potential alliances or conflicts.
 P. Yamakawa et al. / Telecommunications Policy 36 (2012) 560–570 565

Table 3
Actors in the Peruvian broadband industry.

Code Actors Strategic roles Relation to CSF

A1 Dominant firm This actor is responsible for the provision and supply of Expand the availability of infrastructure
broadband services nationwide. Their role is based on pricing
and conditions for access to retail and wholesale broadband.
Stimulating demand

A2 Challenger firm Challengers are responsible for the provision and supply of Expand the availability of infrastructure
broadband services through generating competition. This actor
represents companies that vie in the market for wired and
wireless internet against the dominant firm.
Development of effective competition
Stimulate demand

A3 Other sector firms This actor can provide shared access to its infrastructure, Expand the availability of infrastructure (e.g.,
especially fiber parallel to gas pipelines or using high tension electrical utilities, roadway duct & gas pipeline
power lines. These are companies in other sectors whose infrastructures)
behavior affects the market for broadband,
A4 State This actor has the task of defining regulatory policies to Expand the availability of infrastructure
telecommunications promote development of and competition in the
sector telecommunications market. Their task should seek to align
interests between stakeholders to achieve these objectives
Definition of national policy for the development of
broadband.
Development of effective competition
Stimulating demand

A5 Other State sectors This actor is the other State entities that do not belong to the Expand the availability of infrastructure.
telecommunications sector but have the scope to influence the
strategic objectives proposed. Policies or compliance of these
entities crucial to preventing barriers affecting the competitive
process and rising compliance costs. These include entities and
regulators in energy (electricity pylons & fiber optics), mining
(fiber optic & gas pipelines), transport (new roads projects),
municipal governments (bureaucratic barriers to the
deployment infrastructure, fear of harm to the health of non-
ionizing radiation).
Definition of national policy for the development of
broadband (as it requires inter-sectoral coordination
between organs of State).
Development of effective competition
Stimulating demand

A6 Broadband users This actor demands services with good price/speed/quality Expand the availability of infrastructure (expansion of
features. For this, broadband should have a sufficient number of network coverage and capacity)
advantages that are attractive to the user and which encourage
adoption.
Development of effective competition (increase
supply)
Stimulating demand

A7 Content and This actor provides relevant content and applications that Stimulating demand
application create value and innovation to change existing business
providers and models, create efficiencies, and assist to make broadband a
developers generator of value to the user
A8 Equipment providers This actor provides technological equipment (last generation) Expand the availability of infrastructure
and opportunities for data convergence to allow a more
efficient delivery of services and advantages to its customers.

In Fig. 2, where the greater the distance the greater the divergence, content and application providers and developers
(A7), equipment providers (A8) and users (A6) are loosely clustered in the center of the figure, suggesting a potential
alliance. A tighter cluster of the non telecommunication actors (A3) and (A5) at the bottom center-right indicates little
divergence between the two, but the distance from the rest of the industry indicates some lack of involvement or
influence. The Dominant firm’s (A1) position at top far-right indicates divergence from the rest of the actors. The analysis
of convergences showed the non telecommunication actors (A3) and (A5) also apart from the other actors, again implying
little affinity with the industry.
The software provides further output of the convergence and divergence of the actor’s positions with respect to each
pair of actors. The data for divergence is presented as Fig. 3.
The analysis of the third order divergence data in Fig. 3 shows a level of strongest divergence between the State
telecommunications sector (A4) and the Dominant firm (A1) suggesting tension between the two actors interests. Fig. 3
566 P. Yamakawa et al. / Telecommunications Policy 36 (2012) 560–570

Table 4
Strategic objectives associated with the Peruvian broadband CSF.

Code Strategic objectives CSF relationships

SO1 Expand Telecom infrastructure and new frequency assignments. Expand the availability of infrastructure.
Define national broadband policy.

SO2 Shared Telecom Infrastructure. Define national broadband policy.

SO3 Develop the national infrastructure of Peru. Expand the availability of infrastructure.
Define national broadband policy.

SO4 Management model of fiber optics. Expand infrastructure availability.

SO5 Reduce equipment costs (PC/modem/smart phones) Stimulating demand.
SO6 Develop more content and applications that stimulate new business models. Stimulating demand.
SO7 Undertake user training for awareness and skill development Stimulating demand.
SO8 Effective Competition. Development of effective competition.
SO9 Best value — speed/price Stimulating demand.
SO10 Enforcement of regulation for improved quality of service. Stimulating demand.

Table 5
3MAO agreements and disagreements of actors to the strategic objectives.

Actor Strategic objectives

SO1 SO2 SO3 SO4 SO5 SO6 SO7 SO8 SO9 SO10

A1 3.5 3.5  2.4  2.4 3.5 2.4 2.4  4.7 2.4  2.4
A2 3.1 3.1 3.1  2.1 3.1 2.1 2.1 3.1 4.2  1.0
A3  1.4  4.1 0.0 0.0 0.0 1.4 1.4 0.0 0.0 0.0
A4 5.4 5.2 5.2 3.4 5.2 5.2 3.4 5.2 3.4 5.2
A5  2.8  1.8 0.0 0.0 0.0 0.9 0.9 0.0 0.0 0.0
A6 1.7 1.7 2.6 0.0 2.6 3.5 2.6 1.7 3.5 1.7
A7 0.0 0.0 0.1 0.0 0.1 0.1 0.1 0.1 0.1 0.1
A8 1.7 0.0 1.7 0.0 1.7 1.7 1.7 1.7 1.7 1.7

Total agreements 15.3 13.6 12.7 3.4 16.3 17.2 14.7 11.8 15.3 8.7
Total disagreements  4.1  5.9  2.4  4.5 0.0 0.0 0.0  4.7 0.0  3.4

A2

A1
A6

A8
A4

A7

A3
A5

Fig. 2. Map of the third order divergences between actors.

 P. Yamakawa et al. / Telecommunications Policy 36 (2012) 560–570 567

A6
4

7.8
A5 A7
22
5.8
A8 4.5 5.4 4.8
7.3
0.6
A1
7.5
1.4
1.4
6.7
15.4

6.3
A2 5.9
1.5 A4

5.9

7.9

A3

Weakest divergences
Weak divergences
Moderate divergences
Strong divergences
Strongest divergences

Fig. 3. Graph of the third order divergences between actors.

also shows weak divergences across the rest of the actors suggesting the need for a common frame of reference for
industry engagement. The analysis of convergence showed that the State telecommunications actor had strongest
convergence with the Challenging firm and also with users. These are obvious results because, (1) the State
telecommunications sector’s regulatory role should put it in alignment with users and (2) in its competition promotion
role, the State telecommunications actor interests should align with the Challenging firms’.

5. The formulation of proposals

The final step in the MACTOR method is the development of recommendations or proposals.
The MACTOR data in Table 5 suggests that the strategically important content and application providers and developers
are relatively isolated in the system. This is a counter intuitive result as this actor is significant for the future attractiveness
of broadband; where through its actions demand is stimulated, which in turn stimulates the supply of connections.
The pattern of actor positions in Fig. 2 reveals that the users (A6), content and application providers and developers
(A7) and equipment suppliers (A8) have less divergence indicating a potential future partnership, but it is weak enough to
indicate that some form of facilitation could be needed. Meanwhile, the State continues to develop its own applications
and content through the National Office of Electronic Government and Information Technology and the Ministry of
Education (National Office of Electronic Government and Information Technology, 2010). However, the few procedures for
the interaction between agencies to achieve any e-government synergies (National Office of Electronic Government and
Information Technology, 2010) is in part explained by the weak convergence between other State actors (A5) and State
telecommunications (A4). This suggests improved coordination is needed, but progress is likely to be impeded by the
institutional weaknesses found in Peru.
The results showed that the State telecommunications actor (A4) and the Dominant firm (A1) have considerable
divergence and other analysis revealed moderate convergence. The Dominant firm is reliant on the State actor as the
regulator — hence there is a convergence. While the divergence observed in Fig. 3 is most probably due to the perceived
impacts of regulatory reform that would interfere with its Dominant position in the market. The different levels of
intensity of relations between each of the telecommunication firms and the State telecommunications actor can be
explained by regulation potentially weakening the near monopoly position that currently exists; disadvantaging one,
568 P. Yamakawa et al. / Telecommunications Policy 36 (2012) 560–570

while assisting the other. An opportunity to address the market competition may exist through the network expansion and
increasing the number of lines or through the release of additional radio spectrum to provide additional wireless and
3–4 G options. It is possible for the State to consider public private partnerships to extend fiber or to facilitate
infrastructure sharing options, thereby involving private capital whilst generating additional funds through a spectrum
auction (Qiang, 2010). This would be an opportunity for the State telecommunication sector to change the relationship
dynamic with the telecommunication firms while continuing with the expansion of the fiber backbone as planned.
To maximize the potential of unused infrastructures, the lack of involvement with the industry by the non
telecommunications actors (A3) and (A5) is an impediment. The other sector firm actor (A3) can play a critical role, as
owners, to improve the sharing of existing infrastructures, while the other State sector actor (A5) involvement is necessary
to obtain a unified and coordinated approach from the State, especially from the energy and transport agencies.
The analysis showed there is no actor disagreement with the strategic objectives related to demand stimulation. Thus,
Peru can consider introducing digital literacy programs, promoting the benefits of the Internet, providing computer skills
training and reducing the costs of computers. However, these programs must be fit for purpose, understand the dynamics
of adoption and account for cultural and gender differences (Brannstrom, 2012; Howick & Whalley, 2007, Lin et al., 2011;
Tookey et al., 2006). Further, the rural nature of Peru’s underserved areas may present problems of adoption. The literature
points to rural areas presenting particular problems such as the lack of businesses using the internet, the difficulty of
accessing training, agricultural enterprises being traditionally low internet users, financial reasons and the lack of family
members in the home using the internet (Tookey et al., 2006; Turk & Trkman, 2012). Similar reasons exist in Peru.
Conversely, statistics indicate that Peruvians are amenable to internet use, for while broadband penetration is low at 3.27
percent, internet usage is comparatively high at 27.7 percent in 2009 (World Bank, 2010). This is attributed to the
existence of internet cabinas — small privately operated public access kiosks (Fernandez-Maldonaldo, 2008). Further
research needs to be undertaken to examine the perception and characteristics of internet use in the cabinas to inform
future adoption strategies in the areas where broadband is to become available.
Given the above discussion the following proposals are raised;

1. Actively promote the incubation of ICT applications and content development, with a State agency responsible for
fostering e-government outcomes. Having a coordinating agency is particularly relevant for Peru due to the weak
convergences of State actors and the history of fragmented responses to broadband development.
2. Use the analysis of the actor interplays to inform a process for effective competition development in the wholesale
market of broadband that further enhances competition in the retail market. This is particularly important for Peru so
that problems with alternative infrastructure utilization, interconnection and network access can be mediated
providing improved speeds and quality to users.
3. Develop the infrastructure of broadband through the strengthening and enforcement of the existing plans for national
backbone development. Peru’s market led approach has not effectively delivered coverage across the country and as
Bauer (2010), Gospic and Bogojevic (2010), Jeanjean (2010) and Qiang (2010) contend it is timely for governments to
consider interventions or partnership solutions.
4. Stimulate demand through the development of digital literacy programs and the strengthening of measures to facilitate
PC ownership or access. Peru will need to ensure that these programs are well coordinated, take into account the rural
nature of the population and respond to the requirements of new users who have the opportunity to be connected to
broadband in the future.

6. Conclusion

This paper presents the critical success factors for developing broadband in Peru and particular attention was paid to
the interplay between the actors in the system. The analysis of the industry’s strategic objectives by the MACTOR software
found that the actor’s interactions present some barriers to progress. Importantly, the State has yet to show a unified
approach to broadband development. Other Latin American countries have placed responsibility for broadband with
the office of the President to ensure there is sufficient authority and to signal broadband’s importance to the country
(Gómez-Torres & Beltrán, 2011); something that Peru may also wish to consider. To achieve broadband development in
Peru and to strengthen each of the CSF stronger linkages between organizations are required. The challenge for Peru is to
implement measures which affect organizations from different sectors, both public and private, when they are articulating
different organizational objectives. The MACTOR analysis determined that the objectives of sharing infrastructure, further
deployment of infrastructure and the development of competition in the market for broadband services are those that
generate the most divergence between the actors. Based on the MACTOR analysis four proposals are offered to progress
Peru’s broadband development. The research also found a lack of a national policy for the development of broadband in
Peru and without one it may be difficult to achieve the coordination required to meet the CSF outcomes.
Finally, this study has certain limitations. A limited number of respondents are responsible for the data from which
form the basis of the CSF and MACTOR analysis. Further, the study is qualitative in nature. The data was sourced primarily
 P. Yamakawa et al. / Telecommunications Policy 36 (2012) 560–570 569

from interviews augmented by official reports and statistical data and although precautions were taken bias cannot be
fully removed.

Acknowledgments

The authors would like to acknowledge the helpful advice of the three reviewers of this article and Gareth Rees who
assisted the authors to produce this English language version of their research.

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