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Jul 08 2011

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Snapshot: State of telecoms in the Caribbean region

As part of our Snapshot series, the state of telecoms – fixed-line, mobile, and Internet – in the English-speaking Caribbean as at 2010 is examined.

This Snapshot uses publicly available telecoms statistics collected by the International Telecommunications Union (ITU) from its member countries. The exercise examines fixed-line, mobile and fixed broadband subscription teledensities in the English-speaking Caribbean as at 2010.

It is highlighted that although the ITU has established clear definitions for all of the indicators it collects, the member countries supply the data to the organisation. It is therefore not clear the extent to which the ITU attempts to corroborate or validate the information provided.

Fixed-line service

The introduction of competition in telecoms sectors over the last ten years has resulted in a marked and consistent decline in fixed-line connections in most English-speaking Caribbean countries. Prior to liberalisation, fixed-line service was generally limited to urban areas, and new connections took months, if not years, to be realised. In Figure 1, which shows the number of fixed-lines subscribers per 100 inhabitants as at 2010, 12 of the 14 countries have fewer than 55 fixed-lines per 100 inhabitants, and experienced a decline of between 5% and 46% within the last 10 years.

Figure 1: Fixed-line penetration in select Caribbean countries as at 2010 (Source: ITU, IMF, CIA)

It is important to highlight that a major contributing factor to the steady reduction in fixed-line connections could be the fact that customers have been cancelling their fixed-lines, especially their household telephones, and are using their mobile phones exclusively. Many reasons exist for this phenomenon, including:

  • the limited access to and availability of the fixed-line service, as opposed to mobile service
  • the ease with which spending can be controlled, since traditionally the fixed-line service was post-paid, but prepaid mobile calling plans are a standard option
  • the status of mobile phone ownership
  • the portability of mobile phones, which offers a number of distinct advantages over the ordinary telephone, which can only be used at a fixed location.

Mobile service

The introduction of low-cost mobile service in the early 2000s has revolutionised the telecoms landscape across the Caribbean region by considerably improving access to and availability of telecoms services. This has resulted in very high rates of mobile phone ownership, as reflected in Figure 2. No country in the sample group has less than 60 mobile subscriptions per 100 of the population, and a maximum of 184.7 mobile subscriptions per 100 of the population has been reported in Antigua and Barbuda.

Figure 2: Mobile penetration in select Caribbean countries as at 2010 (Source: ITU, IMF, CIA)

Mobile teledensity figures over 100% are generally considered positive indicators of customer choice and the level of competition that exist in a country. However, some regional experts are concerned that this occurrence is more indicative of deficiencies in the market, such as high costs of calling between different networks, and the absence of number portability, i.e. the ability to keep one’s mobile phone number should one change mobile providers (Caribbean 360). While these deficiencies might obtain in most Caribbean countries, high teledensity figures do not truthfully reflect the situation on the ground. For example, they do not indicate:

  • the number of persons who do not have mobile subscriptions, e.g. due to lack of access, poverty or personal choice
  • the impact of customer spending power, to purchase and maintain more than one mobile subscription, especially since prepaid subscriptions tend to predominate in the region
  • the average monthly revenue per customer a provider receives, which can be quite low for persons with two or more mobile phones, and especially if they all use prepaid calling plans.

Interestingly, even in developed countries where mobile calling rates are actively regulated and number portability exists, teledensity rates over 100% are still generally the norm. In these countries, it has been estimated that there is a market for mobile chipsets embedded within a wide range of devices (including homes, vehicles, medical equipment and smart meters) of between three to five times the number of mobile handsets that are in use today.

Fixed broadband service

In the English-speaking Caribbean, and as reflected in the post, Snapshot:  Internet speeds and prices in the Caribbean, most providers are offering, at a minimum, domestic Internet service of up to 1 Mbps, and have phased out Internet dial-up. Hence the focus tends to be on fixed (or wired) broadband services, which for data collection purposes and as at March 2010, the ITU defines as dedicated connection to the Internet at downstream speeds equal to, or greater than, 256 kbit/s, using DSL”.

Figure 3 presents the number of fixed broadband subscriptions per 100 of the population. All of the countries report broadband teledensities under 50 subscriptions per 100 inhabitants, and 11 of the 13 have fewer than 30 subscriptions per 100 inhabitants. However, when compared with OECD countries, where most broadband teledensities are under 40 subscriptions per 100 inhabitants, some of the subscription levels in the region, especially in Dominica, seem unusually high. With regard to Dominica, its fixed broadband teledensity is considerably greater than its fixed-line teledensity, but both services would generally  use the same network, so it appears that an inconsistency indeed exists.

Figure 3: Broadband penetration in select Caribbean countries as at 2010 (Source: ITU, IMF, CIA)

Although the focus in the region is still on fixed broadband, the cost and logistics of deploying such networks might limit their continued expansion. However, both Digicel and LIME have recently launched pre-4G mobile services (see EDGE, WiMAX, 3G or 4G: what’s the difference?), which would offer more cost-effective and efficient rollout options than fixed (wired) broadband. More importantly, this technology could satisfy the growing demand for broadband speeds and capacity within the region, especially in areas where ADSL or fixed-line networks might not be available.

Further, when the future of the Internet is considered, mobile phones will still be the device through which a broad range of services will be accessed and used. Consequently, industry experts are emphasising the need for wireless high-speed broadband, which should be available under 4G, in order to carry the services that will become mainstream in the coming years.

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About the author

Michele Marius

Michele Marius has a wealth of experience in the telecoms and ICT space, which has been gained in the Caribbean, Southeast Asia and the South Pacific, and in the public and private sectors. She is the Editor and Publisher of ICT Pulse.

Permanent link to this article: http://www.ict-pulse.com/2011/07/snapshot-state-of-telecoms-in-the-caribbean-region/

5 comments

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  1. Hallam Hope

    A timely post which could lead into discussion on what the new environment of 4G will mean. I expect Barbados to have 4G competition this year and the immediate issues would be affordability, quality of broadband etc. As usual the urban areas are expected to get attention and the rural areas neglected initially. But the question is what will it mean for access to the Internet for low income citizens?

    I find that researchers such as us are far ahead of the public and political directorates in terms of ICT Policy planning. Academia with Hopeton Dunn an exception also tends to be below the policy radar.

    Hallam Hope
    Barbados

  2. Nigel Cassimire

    Great blog! The comment about Dominica’s apparent inconsistency with the fixed broadband penetration statistic did not specify whether cable TV providers were taken into account. My recall is that Dominica has longstanding cable TV services so it’s worth mentioning whether they figure into the broadband Internet acess reckoning.

    1. Michele Marius

      Thanks for the comment, Nigel!

      Re the discrepancy of Dominica’s fixed broadband penetration, I am seeing some other figures for Dominica’s internet penetration (of which fixed broadband should be a subset) at 11% as at 2010. However, as you rightly noted, Dominica has had a longstanding (and possibly well developed) cable TV service, which could also be carrying Internet broadband. In that regard, I would hope for a bit more consistency in the data that country makes available, since the 47% (broadband) and 11% (Internet) are vastly different…

  3. Joseph

    Thank you for a well organised blog. I would like to suggest that one of the issues which exist in the Caribbean Internet Infrastructure industry is the constant talk of fixed broadband.

    I would agree that the future of internet connectivity rests on mobile devices and mobile phones. However I would expect a minimum of 1meg download speed.

    Also, given the proliferation of mobile subscribers in the region, the adoption of business models to take advantage of this would seem to be very thin on the ground if we were to compare the region to Africa.

    BTW, would you be aware of any country by country internet infrastructure data? I would also like to know if there are any digital literacy figures on a country by country basis with a definition of the same.

  4. kamutula

    It would be interesting to see a comparison between household and business uptake of both mobile and landphone subscription.

    I mention because, I would expect businesses would invariably take up both in same proportion. Households, on the other hand, would be consistent with the findings. If this be the case then, the findings thus shown could well be skewed by business subscribers.

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