Puerto Rico: Amid Challenging Economic Conditions, M&A Activity Increases and Competition Intensifies

Puerto Rico is one of the most developed telecom markets in Latin America, with service penetration rates above the regional average and technology adoption trends highly influenced by the mainland US market. With a challenging economic context ahead, we expect the Puerto Rican telecom market will experience very moderate growth throughout the forecast period, mainly driven by the mobile and fixed data segments. We project that from 2015 to 2020, telecom and pay-TV service revenue will increase at a 1.7% CAGR, from $2.3bn in 2015 to $2.5bn in 2020.

Scope

• The Puerto Rican telecom market generated an estimated $2.3bn in telecom and pay-TV service revenue in 2015, 0.7% up on the previous year as a result of the island’s difficult economic environment. With a challenging economic context ahead, we expect the telecom market to experience very moderate growth though the forecast period, expanding at a 1.7% CAGR between 2015 and 2020, mainly driven by the mobile and fixed data segments.

• Competition in the Puerto Rican telecom and pay-TV market has intensified over the past five years, resulting in a wave of mergers and acquisitions that has significantly reduced the number of players in the fixed and pay-TV segments.

• Claro is currently the largest telecom player on the island, responsible for nearly 34% of the total revenue in the market in 2015. The Pan-America operator currently offers mobile and fixed communications services as well as pay-TV services.

• Puerto Rico closed 2015 with an estimated 3.2m active mobile subscribers and a penetration rate of 92.2%, below the Latin American average (115.3%). As we move forward, we project that Puerto Rico’s mobile subscriber base will continue expanding during the 2015-2020 period at a 0.8% CAGR.

• Puerto Rico closed 2015 with a voice-line penetration of the population of 24.4%. Fixed broadband penetration of the population stood at 17.8% at the end of 2015, one of the highest in the region.

• Puerto Rico reached 694,400 pay-TV accounts and a household penetration rate of 56.5% at the end of 2015, above the Latin American average (42.1%). Liberty Global is currently Puerto Rico’s largest pay-TV service provider, followed by DTH/satellite operators DIRECTV, now part of AT&T, and Dish Puerto Rico, with estimated shares of 32.1% and 28.3%, respectively.

Reasons to Buy

Facilitates service providers, mobile operators, tower operators, equipment manufacturers/vendors, investment banks, management consulting companies, industry associations, and regulators, to gain a context of the Puerto Rican telecom services market, to align business strategies.

Understand Puerto Rico’s telecommunications regulatory framework, and how it will evolve over the next 18-24 months.

Assess Puerto Rico’s fixed telephony (including VoIP), broadband, mobile voice and data, and pay-TV market size.

Investigate current and forecast trends in Puerto Rico’s fixed telephony (including VoIP), broadband, mobile voice and data, and pay-TV markets.

Gain insight on Puerto Rico’s telecom and pay-TV market competitive landscape, examining key trends in competition and service providers’ performance, revenue market shares and expected moves over the next five years.

Identify and assess the near-term opportunities for operators, vendors and investors in Puerto Rico’s telecommunications and pay-TV markets.