Puerto Rico’s wireless market is gearing up for another year of growth, fueled by the explosion of 4G Long Term Evolution (LTE) digital technology that promises faster and better services. The demand that should be associated with LTE will drive companies to do everything they can to expand the technology’s reach, industry executives told News is my Business.
LTE came into the scene during the latter half of 2011, when AT&T and Claro became the first carriers to begin deploying it in the San Juan metro area. Open Mobile is also expected to join the party early this year, as this media outlet first reported in October 2011.
Claro President Enrique Ortiz de Montellano said “consumers will experience fixed and mobile Internet speeds of up to 100 megabits per second with Claro.”
Two other industry players, T-Mobile and Sprint, also have plans to continue boosting speeds, based on HSPA+ and other technologies.
Josué González, marketing director of Open Mobile, said Puerto Rico’s wireless industry “will be interesting” this year, because there are still five operators in the market, “which is good for the consumer, who already have the best rates in the Americas. The bang for the buck that Puerto Rican consumers have is important.”
“But this year, we’re going to continue seeing a focus on who will give the most value to the customer, not necessarily the most inexpensive service,” he said. “It will be about service, service, service.”
The fact that there will be three LTE networks available this year puts Puerto Rico ahead of many other countries, particularly in Latin America, and “makes the island one of the first places in the world where there are three functioning networks.”
“That may go unnoticed, but the truth is that Puerto Rico will become one of the few places in the world offering the fastest Internet access,” he said. “This represents economic benefits as well as more access opportunities for customers.”
Mobile marketing will boom
AT&T predicted that smartphones and mobile barcodes will spur innovation and sales in the marketing world this year.
In September, AT&T commissioned an online survey of 501 marketing or advertising professionals working at U.S.-based companies, who said mobile tools and smartphones will take center stage in their marketing efforts this year. Mobile applications, barcodes, banner ads, mobile web and text messaging features will all play key roles in the strategies to be deployed this year.
“With the growing popularity of smartphones and the increasing dependence on mobile devices, it’s only natural that marketing executives want to turn up the volume on their mobile strategies next year,” said Chris Hill, Vice President, Advanced Mobility Solutions, AT&T Business Solutions.
According to the CTIA Wireless Association, 250 million Americans now have mobile phones, including more than 3 million in Puerto Rico. For marketers, this provides a rich platform to reach audiences on the go, transforming the marketing industry. And this trend is not showing any signs of slowing in 2012.
Pyramid predicts local market growth
Industry analyst Pyramid Research predicted Wednesday that the island’s telecom market will wrap up 2011 with $2.23 billion in service revenue, up 2.1 percent over the $2.22 billion raked in the previous year.
Moving forward, the research firm said the overall market will grow at a 3.2 percent annual rate through 2016, reaching total revenue of $2.6 billion.
“Over the same period, we believe VoIP and mobile data will be the fastest-growing segments,” Pyramid said noting that while the former will grow at an annual rate of 19.9 percent, the latter will expand at a rate of 17.6 percent.
“The mobile voice segment, traditionally the greatest revenue generator in the Puerto Rican telecom market, will maintain its status as the top revenue generator over the forecast period,” the research firm said. “It will, however, lose ground to other revenue lines such as mobile data, whose participation in the revenue pie will almost double from 15.12 percent in 2011 to 29.04 percent in 2016.”
Meanwhile, revenue from the paid-TV segment will show “more moderate growth rate” over the forecast period — at 4.1 percent annually — “as subscribers, affected by the challenging economic conditions, downsize the value of their service packages to more basic bundles and more affordable prepaid offerings.”
Claro’s Montellano, who in November said the company’s Internet-based paid television service, ClaroTV will go live this quarter, said its arrival as a new player in the cable television arena will “end their monopoly, which has set back this industry’s development in Puerto Rico.”