LIMA, Oct 29 (Reuters) - Chilean telecoms company Entel hopes to significantly expand its small slice of Peru’s fast-growing cellphone market after buying Nextel’s local unit, but it does not foresee waging a price war to do so, an executive said.
Entel, Chile’s biggest cellphone operator, took over a nearly 5 percent share of Peru’s cellphone market when it snapped up a Nextel subsidiary from NII Holdings last year for $400 million.
“We aspire to have a very large share of the market,” Nino Boggio, a manager of Entel’s Peruvian subsidiary, told Reuters in an interview on Wednesday.
“Hopefully we manage to have a share similar to those of current operators,” he said.
Peru’s wireless market is now dominated by two carriers. Spain’s Telefonica provides 55 percent of cellphone lines through its unit Movistar, and Mexican magnate Carlos Slim’s company, America Movil, controls another 40 percent with its brand Claro.
“That means a big opportunity for Entel,” said Boggio. “The Peruvian market has been highly concentrated with the presence of two operators ... there is a high level of dissatisfaction.”
Boggio said Entel will spend $1.2 billion over five years to grow its presence in Peru, where solid economic growth over the past decade has broadened the middle class and fueled consumption.
Entel’s venture into neighboring Peru is the first time it has taken its wireless brand abroad.
The company offered a series of low-priced plans when it first started operating in Peru, and Movistar and Claro responded by cutting their fees.
But Boggio said Entel’s strategy is to offer “fair prices” to build clients over the long-term in Peru, where there are now more than 30.6 million cellphone lines.
“Our intention is not to start a price war but to make our prices reflect the service we’re offering,” he said.
Entel has enjoyed double-digit revenue growth in recent years, with sales of over $3 billion in 2013. (Reporting By Marco Aquino, Writing by Mitra Taj; Editing by Bernard Orr)