One of Peru’s major wireless carriers is looking for partners in Ottawa’s telecom sector to support the rollout of the South American nation’s largest 3G networks. Representatives from Nextel Peru, the third-largest mobile operator in that country, were in Ottawa this month to meet with local firms and explore potential business relationships.
During the two-day visit, Nextel officials also toured facilities at DragonWave Inc., EION, TenXc, and the University of Ottawa. “We view these initiatives as good introductions to markets and new customers,” said Greg Friesen, vice-president of product development at DragonWave Inc. “(Nextel Peru) is a strong target of ours.”
Nextel Peru spent US$125 million upgrading to a 3G network, becoming the first subsidiary of U.S.-based NII Holdings to do so. Since its beginnings in the Peruvian market in 1998, Nextel’s two-way digital radio technology has made its product popular in corporate and government circles, giving the company a dominant position within this niche market.
“(Nextel Peru) has a very large subscriber base. They are well-known for their push-to-talk technology, and they’re rolling out huge expansions in their 3G wireless network within Peru. They look like a company on the rise in many ways,” said Nabil Seddigh, president of Ottawa-based Solana Networks.
DragonWave Inc. and Solana Networks were two of 16 businesses that had a 20-minute meeting with representatives from Nextel Peru.
Although they did not announce any specific plans for the future, Nextel Peru’s representatives indicated the Ottawa visit could lead to the exploration of areas including 4G technology, wireless and RF front-end solutions, as well as e-learning for Nextel staff.
Nextel is also in the midst of capitalizing on the corporate mobile applications space, having subcontracted its hardware and network solutions to Huawei earlier this year.
The growing economy in Peru makes it a popular emerging market for Canadian companies to invest in. It is estimated that Canadian investment in Peru is valued at US$2.8 billion. During a time when many countries’ economies were contracting, Peru’s economy expanded by 1.1 per cent in 2009, and it’s estimated to increase by 6.9 per cent in 2011, according to Canada’s trade commission service in Peru.
Thanks to an estimated growth of 13 per cent between 2010 and 2014 in Peru’s ICT market, there are opportunities aplenty for Ottawa companies. Both the private and government sectors have played an equal role in the growth of the market.
According to Canada’s trade commission service in Peru, many niche markets have developed within the private sector, including education, geomatics, and health care. The government sector is spurring growth with public-private partnerships.
Opportunities exist as the Peruvian government expands and improves infrastructure and technology for prisons, airports, hospitals, as well as the country’s air force. The government has also initiated FITEL, a series of rural broadband projects intended to bring broadband connectivity to 4,000 communities in Peru.
Mr. Seddigh said that network expansion makes Peru a sustainable market.
“The market in Peru is a good one … with a very strong penetration in wireless. All of these wireless networks will be expanding from 2G to 3G and 4G, providing more and more data services. So the opportunity is a good one, and I think it is going to be sustained for quite a few years,” Mr. Seddigh said.
Technological compatibility is also what is drawing some to South America; a company can roll out a product line in one country, and then reintroduce it in several different South American markets.
“We recognize that we don’t have to do any technological advancements … to go into a lot of these countries. So the cost of entry from an internal perspective is a lot less than if we went into the Asian market or European market,” said Paul Stevens, vice-president of business development for Kavveri Technologies Inc.
With the first introductions complete, the government of Ontario’s ministry for economic development and trade is planning an ICT mission to Lima in September, which will allow Ottawa companies to further explore investment and business opportunities in Peru. – By Greg Markey