Puerto Rico’s wireless sector has been stagnant since 2011, with five carriers fiercely competing for their wedge of a market that reflects an 89 percent penetration rate — well below many jurisdictions in the Americas.
Challenging conditions, such as a significant population drop during that period and the island’s profound economic problems, is motivating one of the providers, T-Mobile, to get fully behind its “Un-carrier” strategy to “capture every single customer in Puerto Rico and have them on the T-Mobile network,” said Jon Freier, executive vice president, of field sales & operations for T-Mobile US, who is here this week meeting with employees and visiting stores.
“Puerto Rico is a very competitive market and we’re proud to have made it even more competitive since the Un-carrier launch,” he said of the strategy introduced a year ago. “Compared to other U.S. markets, the Puerto Rican consumer is very technologically oriented and educated. It’s fast paced and dynamic, even more than the U.S.”
Through the “Un-carrier” strategy, T-Mobile has taken it upon itself to break down traditional wireless approaches by eliminating contracts, increasing broadband data to available customers, and offering free streaming of some of the most popular mobile apps, among other benefits to lure clients from the competition.
“Our team has done a tremendous job, focusing on customer needs, and has liberated more than 25,000 clients in [Puerto Rico] in only one year,” he told members of the press following a “town hall” meeting with employees at the Puerto Rico Convention Center.
However, the approval of an increase in the sales and use tax to 11.5 percent from 7 percent that is expected to go into effect July 1, is not helping matters for individual carrier growth, said Freier, flanked by Jorge Martel, general manager of T-Mobile’s local operation.
“We believe that imposing new taxes will hinder the creation of new jobs and negatively impact Puerto Rico’s economic development. Any new tax structure must allow us to continue investing and generating jobs like we have done,” he said, adding that in the last year, the carrier has invested more than $150 million in network upgrades islandwide.
Looking ahead, the company is pursuing plans to increase its network footprint by 8 percent, adding 64 new wireless sites by the end of the year to expand its LTE signal to 90 percent of the island’s population, said Martel, adding “this is one of the markets where we’re investing the most.”
T-Mobile Puerto Rico created 150 new jobs last year and 55 so far this year, and “would like to continue growing, we’re really worried that Puerto Rico doesn’t have a long-term strategy that encompasses economic growth. Once again, we need to do quick fixes. We’re worried about the B2B taxes and are looking closely at consumer demand to see how the 11.5 percent will affect them.”
The government’s new tax measures will force T-Mobile to “be more cost-efficient on our approach to the market. And we will continue to run a successful operation as long as there is a healthy business environment,” Freier said.
“We are in constant communication with the local government and we make sure they know that we have increased jobs over 20 percent in the past year, invested solidly in the economy and with ‘Un-carrier’ helped consumers and small businesses,” said the executive in charge of 3,200 stores and 35,000 employees in the U.S. mainland and Puerto Rico.
“We ask for a fair treatment from the government in terms of taxes so that we may continue to maintain our investment in the island,” he said.
In Puerto Rico, T-Mobile competes against Claro, Open Mobile, Sprint and AT&T.