Gaither MBP poll reveals continuing demise of landline phones in Puerto Rico. [INSIGHT]

Only 21% still clings to landlines, as mobile growth continues; Claro’s ultra-fast fiber may reverse that, and then some

Wow, is this unexpected or what? Everyone who is following the dramatic decline of landline telephones in Puerto Rico expects that at some point the drop will stop.

But it hasn’t, and the number is now down to a shocking 21% of all households, according to this week’s Gaither International, WOSO Radio, CARIBBEAN BUSINESS poll in which 23,800 people were interviewed for a highly representative sample of local residents.

Think about that for a moment. When the Puerto Rico Telephone Co. was privatized in 1998, landlines constituted most of the island’s network. It was the company’s core business, for which it had invested billions of dollars in underground cabling and fiber-optic infrastructure going back decades.

To be sure, landline-phone use still reigns supreme everywhere else—you know, businesses, government agencies, schools, hospitals, etc. (the institutional market).

And even in homes, the infrastructure is still used by people who connect to DSL (digital subscriber line) high-speed Internet through Claro, today’s incarnation of the former Telefónica, now the company with the largest Internet-connection market share.
But as big as Claro is in that segment, most homes that have dropped their landline phones are not DSL customers, and those phone lines are, therefore, sitting idle.

The big reason for landlines’ abandonment, of course, is the massive adoption of cellphones, a segment Claro also leads.
“Puerto Rico is going through the same trend we see globally, in the substitution of the technology used for the basic voice service,” Claro Marketing & Communications Director Ileana Molina Bachman told CARIBBEAN BUSINESS.

It is a trend, added Puerto Rico Internet Society President Eduardo Díaz, that may very well be reversed in the coming years as Claro accelerates the installation of the much-anticipated FTTH (fiber-to-the-home) technology, a process that is well under way.
“Speed is a function of the distance between your home and the curbside where Claro has its fiber network,” Díaz explained. “What they’re doing is connecting fiber from that curb to a box near the home to shorten that distance substantially, and from there, the copper cable that reaches the home is able to carry tremendous speeds,” which Claro plans to use to sell not just the fastest Internet connection in Puerto Rico, but also Claro TV to compete with paid cable.

FTTH will also enable the company to recover much of the lost business in landline phones by coming up with exciting new smartphone-like features, and perhaps gaming and remote-control capabilities.

“Claro is setting the pace of advanced technology in Puerto Rico by investing in technology such as fiber, so we may enable access to every service that requires high bandwidth and stability,” Molina added.

MBP poll

Gaither was able to survey as many as 23,800 people, face-to-face, reducing the sample’s error margin to plus or minus 0.5 percentage points, by deploying the firm’s proprietary and recently announced MBP method, short for Media Brand Profiles, which consists of hundreds of scientific, representative surveys each and every month—in this case, asking respondents: “Do you have a landline phone in your home?”

“Currently, more than 80% of local residents report owning a mobile phone, and this number increases every year,” said Gaither Vice President Beatriz Castro.

Gaither found that the older the respondents, the likelier they were to still own a landline phone at home. Those 55 and older (34%) were likelier than those 35 to 54 (21%) and even more than those 18 to 34 (15%).

“Interestingly, respondents with middle and high income levels are likelier than those with low incomes to have a landline phone. When it comes to paying two bills, one for mobile and another for the landline phone, people with low incomes have opted out of landlines,” Castro added.

For more information at http://www.caribbeanbusinesspr.com