Publication Date: December 2023
Report Pages: 119
Analyst: Henry Lancaster
Puerto Rico has a small telecom market which in recent years has been deeply affected by a combination of economic mismanagement and natural disasters, including two hurricanes which landed in late 2017 and an earthquake which struck in January 2020. These disasters caused considerable destruction of telecom infrastructure, which in turn led to a marked decline in the number of subscribers for all services. Compounding these difficulties have been a long-term economic downturn which encouraged many people not to resume telecom services after these were restored. After some delay, the FCC in late 2019 issued an order relating to the release of funds to help rebuild telecom infrastructure.
Although Puerto Rico is a US territory it lags well behind the mainland US states in terms of fixed-line and broadband penetration. This is partly due to high unemployment rates (and consequently low disposable income) and poor telecoms investment in a market largely dominated by the incumbent Puerto Rico Telephone Company. This dominance was augmented after the company was acquired by the largest wireless operator in Latin America, América Móvil, in 2007.
The acquisition by Liberty Global of the remaining cable TV operator Choice Cable, completed in mid-2015, created a monopoly player in this sector. Liberty Cablevisión (renamed Liberty Communications of Puerto Rico in 2020), now wholly-owned by Liberty Global’s LLA division, is in a stronger position to capitalise on scale, and so provide improved services based on greater investment and on the use of technology based on the DOCSIS3.1 standard. Liberty Communications has also become better placed in the bundled service market following LLA’s acquisition of AT&T’s wireless and wireline units in Puerto Rico.
The mobile market has been impacted by several mergers and acquisitions over the last few years. In early 2017 Sprint and Open Wireless agreed to merge their networks in a bid to offer better market competition by increasing their scale and combining spectrum holdings. The T-Mobile US acquisition of Sprint Communications was approved in April 2020, and LLA’s acquisition of AT&T’s Puerto Rican and US Virgin Islands operations was finalised in October 2020.
The activities of large multinational telcos such as América Móvil, T-Mobile US, and LLA, continue to impact the Puerto Rican market. Operators have secured spectrum in the 600MHz and 3.5GHz bands, thus enabling them to expand the reach of LTE services and launch services based on 5G.
The growing number of submarine cables landing in Puerto Rico is helping to drive down the cost of telecom services, creating a demand for streaming content from abroad. The uptake of cloud-based applications for both business and individuals is also creating a heightened demand for affordable services.
BuddeComm notes that the outbreak of the Covid-19 pandemic continues to have a significant impact on production and supply chains globally. Since 2020 the telecoms sector, to various degrees, has experienced a downturn in mobile device production. It was also difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G has been postponed or slowed down in some countries.
On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, has offset such pressures. In many markets the net effect will continue to be a steady though reduced increased in subscriber growth.
Although it is challenging to predict and interpret the long-term impacts of the pandemic, these have been acknowledged in the industry forecasts contained in this report.
The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.
Aeronet Wireless Broadband, AT&T, Blackburn Networks, Puerto Rico Telephone Company (Claro), América Móvil, Ericsson, Everynte, Liberty Cablevisíon, Liberty Latin America (LLA), Liberty Puerto Rico, Liberty Mobile PR, OneLink Communications, T-Mobile Puerto Rico, Open Mobile, Sprint PCS, Choice Cable, WorldNet Telecommunications
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