Summary
Puerto Rico has some of the highest rates of teledensity, mobile penetration and Internet usage in Latin America. However, despite being a US territory, Puerto Rico lags well behind the USA in terms of fixed-line and broadband penetration. This is partly because local fixed-line telephony has stagnated in a market largely dominated by the incumbent Puerto Rico Telephone Company (PRTC).
That dominance is unlikely to change in the short term as the PRTC was acquired in 2007 by the largest wireless company in Latin America, Mexico's America Movil. In contrast, with six network operators, the mobile (cellular/wireless) market has been experiencing robust competition and growth. Although America Movil's Claro recently took the lead from AT&T Mobility in terms of subscriber numbers, AT&T regained the top position by late November following its acquisition of Centennial Communications.
In addition, with an emerging VoIP sector, a growing broadband market, and a healthy cable and satellite TV sector, the growth and convergence of digital media looks promising. Nevertheless, all telecommunication sectors experienced a slow down following the global financial crisis and Puerto Rico's recovery is forecast to be slower than other countries in the region.
Market highlights
At the beginning of 2010, Puerto Rico's unemployment rate had fallen to 16.5%, the highest level since 1931 during the Great Depression. The economic downturn was felt in the telecommunications sectors, yet the industry, in particular the mobile and data sectors, weathered the crisis far better than other industries.
In late 2009 US telco giant AT&T Inc completed its acquisition of Centennial Communications Corp following approval by the FCC. As a consequence of the acquisition, AT&T now owns Centennial's fixed-line operations in Puerto Rico as well as its mobile operations under the Claro brand. The entry of heavyweight AT&T into the Puerto Rican fixed-line sector is expected to significantly increase investment in the sector during 2010 and 2011.
The AT&T acquisition of Centennial allowed AT&T to supplant Claro as the mobile market leader having lost that position to Claro in 2007.
The mobile companies continued to deploy 3G network and some were preparing for 4G upgrades. For instance, in early 2010 AT&T Mobility announced it had deployed HSPA 7.2 technology across its 3G network. The upgrade is expected to pave the way for the future deployment of LTE (4G) technology, which AT&T has revealed it intends to start deploying in 2011.
In 2009, there appeared to be a reversal, at least temporarily, in the declining cable TV subscriber numbers witnessed throughout the past decade.
Despite concerns that thousands of households were unprepared for digital TV, the analogue switch-off in June 2009 appeared to pass without any obvious widespread issue in the Puerto Rican TV markets.Lawrence Baker
March 2010
Data in this report is the latest available at the time of preparation and may not be for the current year.
