This case is about ECONOMY, ENTREPRENEURSHIP, IT
PUBLICATION DATE: January 01, 1998
Privatization of Telecommunications in Peru (Sequel) Case Solution
When the government of Peru president Alberto Fujimori embarks on an ambitious privatization plan, it inevitably concerned the run-down telephone network of his country. With a miserly average of only 2.5 telephone lines present for every 100 men, Peru, in the mid-1990s, had the lowest phone “density” in Latin America; installment of a new line took years, except via a booming black market in present lines. But the privatization committee which starts to plot the function of both the present local and long distance telephone monopolies, understands that it faces formidable barriers to change: namely, a threateningly strong military set-up; an influential cellular phone operator with his own plan; existing unions, and dubious legislators who must approve a constitutional amendment to allow privatization to go forward.
This instance is about the political management of privatization. Case users must see the possible clashes, the aim wanted, and the most useful approaches. The sequel describes the early success of the privatization process, after the phone system’s sale Telefonica, to the Spanish telephone giant. HKS Instance Amount 1404.1
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