On August 17, 2024, Legislative Decree No. 1627 (“DL 1627”) was published in the Official Gazette “El Peruano” within the framework of the powers delegated by Law No. 32089.
DL 1627 empowers the Ministry of Transportation and Communications (“MTC”) to apply a special mechanism for the direct assignment of radio spectrum at the request of interested companies to provide public telecommunications services through 5G technology or higher at national level.
(i) General considerations for the direct assignment mechanism
Once the band that allows the massive use of 5G technology has been identified, the MTC will contract the studies for the valuation of the band and the mandatory investment commitments that will be required. Likewise, the MTC will verify if the band identified for the provision of services with 5G or higher has enough spectrum availability through a stage of expressions of interest submitted by the companies that want to take advantage of the special mechanism of direct assignment.
Interested companies must comply with the requirements set forth in DL 1627 to access such mechanism, such as a letter of guarantee in favor of the MTC, guaranteeing the seriousness of their participation and accepting the conditions of the call, as well as the subscription of the concession contract with the resulting assignments. The letter of guarantee also guarantees the eventual participation of the interested company in the process called by PROINVERSION referred to in the following paragraph.
(ii) Determination of the availability of the radio electric spectrum
In case the MTC verifies the restriction in the availability of the radio electric spectrum, it will terminate the application of the direct assignment mechanism and will inform PROINVERSION so that it may proceed with the necessary actions for the awarding of the spectrum under the rules that regulate the promotion of private investment.
(iii) Application of the direct assignment mechanism
If there is spectrum availability in the band, once the companies that have access to this special mechanism have been defined, the MTC will proceed to determine the final locations in the band. Then, the MTC and the operating companies will sign the concession contracts to which the totality of its spectrum in the corresponding band will be associated. If the company has a pre-existing assignment, this is valued for the purposes of the new assignment to be granted, as well as for the determination of its mandatory investment commitments.
(iv) Conditioning of pre-existing assignments
Operators with pre-existing assignments in the band that have opted not to participate in the special direct assignment mechanism may access the conditioning of their assignment for a better use of the spectrum. The conditioning implies the modification in the location of pre-existing assignments that do not access this special mechanism, maintaining the validity of the concession contracts to which they are linked. The assignments will be grouped in continuous spectrum blocks, whose final locations will be established together with the new assignments. Neither the concession period nor the bandwidth modification will be extended. At the operator’s request, its conditioned assignments may be related in a single concession contract.
For its acceptance, a letter of guarantee in favor of the MTC is required in order to guarantee the company’s participation in the conditioning mechanism.
Likewise, DL 1627 has amended article 58° of Legislative Decree No. 702 (Telecommunications Law) to establish that, by a regulation with the rank of law, a mechanism of retribution to the State may be contemplated for the granting of concessions with spectrum assignment, based on technical and economic criteria based on the availability of the resource.
Finally, a term of 120 working days has been granted for the issuance of the regulation of DL 1627, which will expire on February 17, 2025.
For further information, please contact María del Rosario Quiroga (rquiroga@estudiorodrigo.com), Andrea Morelli (rmorelli@estudiorodrigo.com), Luis Fernando Roca (lroca@estudiorodrigo.com) and/or Adriana Chavez (achavez@estudiorodrigo.com).
