We have achieved lower rates and improved access to telecoms services… now what?
The state of telecoms in the Caribbean has changed drastically over the last 10 to 12 years. In most countries we now enjoy significantly lower rates, increased access to and better quality of services, but is that all we should expect? Where next should we set our horizons?
In the mid- to late 1990s when many Caribbean countries were beginning to realign their economies from being primarily agriculture-based to promoting investment and services, it was realised that the then current state of telecoms was severely damaging to those efforts. To say service was bad would not do the situation justice. At the time, telecoms service was provided in exclusive monopoly environments, and some of the consequences included:
- Calls, especially international calls, were very expensive. Those were the days when calling the US or UK cost over USD 2.00 per minute, and calls further afield were considerably more.
- Mobile phones were virtually non-existent, but for those who could afford, they were still prohibitively expensive, and coverage and service quality were poor.
- The fixed-line telephone was a no-frills, very basic service. Extras such voicemail, call waiting, caller ID, etc were not promoted and might not even have been available.
- It was difficult to get a telephone connection outside of major towns and cities, as build out of the network was poor. Hence there were waiting lists of several months, even years, in order to get a telephone line at one’s premises.
- Internet access was very basic, primarily dial-up, and was expensive and unreliable.
In a nutshell, access and use of telecoms services back in the day were luxuries that most could not afford, and for those that could, there was a wide disparity between the prices charged and the service offered. More importantly, however, was the considerable difference evident in the prices and services offered in the Caribbean and those available in developed countries which had opened their telecoms sectors to competition and regulation.
The need to increase our comparative advantage over other countries to attract investment was a key driver of the liberalisation efforts that have occurred in the region. Through opening up our telecoms sectors to competition, we had hoped to realise among other things, more affordable rates, more choice in the services available, improved quality, and increased availability of services. Critical to that undertaking was the strong political will within governments of the region to drive the process by
- enacting appropriate legislation
- negotiating with incumbent providers to end exclusive monopolies
- establishing independent regulators to oversee sector development
- strongly advocating lower rates, more choice, improved availability of service and quality.
Over the last 10 years, we have witnessed dramatic changes in telecoms in the individual countries and in the region as a whole, and most of the goals that we had envisaged at the outset have been achieved. Although the enabling frameworks were established in most countries, the introduction and dramatic impact of low cost mobile, such as from Digicel, on availability, prices, as well as service take-up, must also be acknowledged.
Hence, technically speaking, we have improved our comparative advantage as it relates to telecoms – prices and services are more comparable to those in developed countries – but has the reform been enough to increase our competitiveness? The short answer is no.
Since we began to address the deficiencies in our telecoms sectors to improve our international competitiveness, the world has changed considerably. Telecoms is now considered a utility, not just a lifestyle extra: use is ubiquitous, access is expected. As a result, its contribution to a country’s comparable advantage, in and of itself, might not be as significant as it used to be.
In this new context, telecoms is merely a platform for realising an Information Society or a Knowledge-based Society. To once again distinguish ourselves, we must be prepared to be innovative and to focus on the higher end of the ICT sector, where systems, services and applications are developed and implemented. Examples of areas that could be considered include cloud computing, mobile applications, virtualisation, and Business-as-a-Service opportunities.
The position that is being advocated is not new. In past years and as a quick win, many countries focussed on the lower end of the ICT value chain, such as data and call centres. In exchange for significant concessions and allowances, those businesses usually promised to employ sizable amounts of lower skilled labour, but frequently did not deliver and were quick to relocate if more attractive offers could be secured.
The key, therefore, is for countries to look higher up on the ICT value chain, and to promote the take-up, use and integration of ICTs into society. Governments, as the largest employer and purchaser of goods and services in most countries and the machinery that all citizens must interact with, are excellently placed to drive ICT development and acceptance in their respective countries. ICTs can improve productivity and information availability in critical areas of our economies, but more importantly, they can be tools to generate investment, which in turn will directly affect our ability to compete globally.
Do you agree with this post?
Having achieved our initial goals in telecoms, where or what areas should Government now focus its efforts?