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Puerto Rico’s reliance on internet services increasing during pandemic

The COVID-19 pandemic, which since mid-March has upended the lives of most people in Puerto Rico, has also brought with it a shift in traditional work environments that now generate a greater demand for telecommunications services, specifically internet connections.

That was one of several conclusions included in a study commissioned by advertising agency Wunderman Thompson, entitled “Ahead or Behind the Curve? Puerto Rico’s Telecommunication Market.”

The study conducted by research firm Abexus Analytics found that “more areas of the economy will continue to shift their operations to a digital environment. Such tendency will add new business opportunities for telecom companies, as more robust and expensive telecom services will be demanded.”

Given that expectations are that e-commerce will grow almost 25% in Puerto Rico this year, telecom companies should prepare for shock-therapy due to the unexpected surge in demand for services, the study confirmed.

That jump could have been higher, the study said, but Puerto Rico’s younger population — which is the most connected — is smaller in size when compared to older generational groups, including the so-called Baby Boomers, who tend to resist using technology for certain activities.

“To the extent that the quarantine has been prolonging, perhaps those generational barriers have been shrinking because the new normal depends essentially on the internet. If there were people holding back from entering the online world to do things like banking and education, that number should be decreasing,” said Eduardo Burgos, COO of Abexus Analytics.

Some 300 people participated in the study conducted in April, who confirmed that internet is the most important of the available telecom services for them, over traditional telephone and wireless alternatives. Participants represented a cross-section of generations in Puerto Rico.

“We’ve continued polling after that, and we’ve been able to see that more people are increasing the capacity of their internet plans, increasing bandwidth,” said Adrián Alós, CEO of Abexus Analytics.

“One number that we expect to change is that the importance given to the internet should be on the rise. On the other hand, internet speeds have likely slowed down some because if we’re all at home at the same time, we have to share bandwidth and the experience now may be different pre-pandemic. However, telecom companies have been able to handle the surge in traffic well,” Alós said.

During the current COVID-19 crisis, telecom infrastructure has become the main support mechanism to keep the economy afloat. Telecom, along with other vital services has become a new priority for local, state and the federal government, the study concluded.

“The COVID-19 crisis will force several industries to transition to a higher degree of digital processes in their day-to-day operations. Retail will have to increase its share of internet sales, central government and municipal institutions will need to accelerate their transition e-government [agencies, courts and legislative systems], advanced services will grow dramatically, and traditional jobs will be displaced due to the automation associated with the digital economy,” according to the study.

Puerto Rico’s telecom sector had a GDP of almost $2.2 billion in fiscal 2018 and is the ninth largest sector in the local economy, the study confirmed.

Author Details
Author Details
Business reporter with 30 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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