A 2013 update of the extent to which Internet broadband speeds are affordable across the Caribbean.
Since May 2011, and following from our most recent Snapshot of Internet speed and pricing, we have been regularly assessing how affordable Internet broadband service is across the Caribbean. In this post, we are updating our findings, and discussing the changes that have occurred since our last review.
Approach
In our most recent Snapshot: Internet speeds and pricing update 2013, we examined the variation of Internet download speeds and monthly pricing for select Internet plans across a number of Caribbean countries. Specifically and focusing on a sample of Internet Service Providers (ISPs), we:
- determined the best monthly rates for an Internet service plan with an advertised download speed of 2 Mbps
- identified the best Internet plan by advertised download speed for up to USD 60.00, and
- compared the monthly rates for a 2 Mbps Internet plan against those recorded in 2011 and 2012.
Having examined monthly pricing, this review focuses on the affordability of those Internet plans. The prices captured in the Internet spend exercise were compared against estimated monthly income, for which per capita Gross Domestic Product (GDP) figures, sourced from the International Monetary Fund and United Nations, have been used as a proxy. The resulting ratios, which have been expressed as percentages, indicate the proportion of a person’s income that would be spent on the stated plan, and hence indicates the extent to which it might be affordable to the average consumer.
How affordable is Internet service in 2013?
In 2013, there is still a wide variation across the Caribbean region in the proportion of a person’s monthly income that could be spent on Internet service. Figure 1, shows the percentage monthly income that could be spent on an Internet service plan with an advertised download speed of 2 Mbps. The proportion of income consumed varies from 1.6% in the Cayman Islands, to 31.72% in Belize and 12.3% in Saint Vincent and the Grenadines. The average proportion of a typical monthly income that could be expended on a 2 Mbps plan among the countries assessed, excluding Belize (which would skew the results), is 4.9%.
Figure 1: Portion of monthly income as a percentage consumed by a 2 Mbps Internet plan in select Caribbean countries as at May 2013 (Source: ICT Pulse)
It is again highlighted that the ISPs operating in Guyana that were included in last week’s Internet speed and pricing snapshot do not offer 2 Mbps Internet plans, hence the country has not been included in this assessment. Additionally, and on a separate note, Suriname has requested that it be included in the Snapshots, and information on Internet broadband service pricing was supplied to facilitate consideration in this exercise.
For an Internet plan with an advertised download speed of up to 4 Mbps, only 10 of the 17 countries offer such a plan, as shown in Figure 2. The impact of this plan ranged from as little as 2.7% of the typical monthly income in the Cayman Islands, to approximately 51.6% of the typical monthly income in Belize. On average, the proportion of monthly income that a 4 Mbps plan would consume, excluding Belize, is about 7.7%.
Figure 2: Share of monthly income as a percentage consumed by a 4 Mbps Internet plan in select Caribbean countries as at May 2013 (Source: ICT Pulse)
With regard to Internet plans with advertised download speeds of 8 Mbps, only 9 of the 17 countries provide such an option. Figure 3, shows percentage of monthly income such a plan would consume in those nine countries.
Figure 3: Portion of monthly income as a percentage consumed by an 8 Mbps Internet plan in select Caribbean countries as at May 2013 (Source: ICT Pulse)
For the countries included in Figure 3, an 8 Mbps plan would cost between 3.1% and 92.5% of the typical monthly income, in the Cayman Islands and Belize respectively. The average across that grouping, excluding Belize, is 9.5%, which excludes the countries listed below Jamaica.
How has affordability changed since May 2011?
Over the last two years and across all of the countries reviewed, with the exception of Suriname (which is a new entry), there has been some change in the portion of monthly income that a 2Mbps Internet plan would consume, as reflected in Figure 4. Between 2011 and 2013, the most significant changes were registered: in Dominica, where the portion of monthly income spent would have decreased by -8.1%; Saint Lucia, where that percentage dropped by -4.9%; and Barbados, where the percentage dropped by -3.2%.
Figure 4: Comparison of share of month income consumed by an Internet plan with an advertised download speed of 2 Mbps between May 2011 and May 2013 (Source: ICT Pulse)
Conversely, only three countries registered an increase in the portion of monthly income that would be spent on 2 Mbps plan over the same two-year period. The most significant increase, +0.7%, occurred in the British Virgin Islands, followed by Trinidad and Tobago at +0.5%, and Antigua and Barbuda at +0.1%.
On the other hand and between 2012 and 2013, the most significant changes have been increases in the portion of monthly income that would be spent on 2 Mbps plan. These increases occurred in Saint Lucia (+3.4%), Dominica (+3.2%) and Anguilla (+1.2%). Only one country registered a decrease in the the same period: Dominica, at -0.8%.
Parting thoughts…
Over the two years in which we have been examining the impact of Internet broadband service against the monthly income of the typical Caribbean citizen, there are signs that Internet service is becoming more affordable. In Table 1, which shows the proportion of monthly income spent on a 2 Mbps Internet plan, averaged across the Caribbean (excluding Belize and Guyana), that figure has almost halved since our first assessment in 2011.
Table 1: Share of monthly income spent on an Internet plan with an advertised download speed of 2 Mbps averaged across the Caribbean between 2011 and 2013 (Source: ICT Pulse)
Many of the countries assessed did experience some rate reductions over the last two years, as reflected in our Snapshot: Internet speeds and pricing update 2013. However, in some instances, especially between 2012 and 2013, the improvement in affordability should be attributed instead to an increase in the per capita GDP, which has been used to approximate monthly income, rather than a to an actual reduction the rates charged
Hence recognising the ever-increasing Internet broadband speeds that are being rolled out globally, there is still scope for Internet rates in the Caribbean to continue to decrease, and for transmission speeds to increase. Unless or until that happens, the region may find itself still challenged to fully harness the Internet and to realise a more inclusive medium in which all of its citizens can equitably participate.
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Very interesting and informative article. Excluding Belize, a 2 Mbps plan consumes the highest share (and well beyond the average of 4.9%) of monthly income in St. Vincent and the Grenadines (SVG). I am wondering if the main contributing factor in SVG is related to relatively higher prices for internet services in general or to a significant disparity in the per capita GDP figures used? On a somewhat separate but related note, I am thinking it should make similar useful awareness to do an exercise like this for electricity costs to consumers across the Caribbean.
Hi Len,
Internet rates for a 2 Mbps plan in Saint Vincent and the Grenadines has not changed over the period of the review. The only other factor, which is affecting affordability is the per capita GDP, which is being used as a proxy for income, and has been changing year on year.
Your Data on Bahamas Internet is off. You will find that the Bahamas market has the lowest price per Mbps in all of the Caribbean and the highest average speeds including all countries south of the Caribbean. In fact the only countries in the Western Hemisphere with higher speeds are USA and CA.
David,
Thank you for your comment.
Do note that the methodology regarding our review of Internet speeds and pricing is in our post, Snapshot: Internet speeds and pricing update 2013, and not our affordability snapshot.
Cable Bahamas was included in the assessment, based on information publicly available on the company’s website. Please be reminded that the focus of the exercise is on RESIDENTIAL service only. Under the “REVON” service line, Internet plans with advertised download speeds ranging from 15 Mbps to 50 Mbps are all that have been listed, as of 27 May 2013.
Hence please indicate where on the Cable Bahamas website the data pertaining to Internet broadband service to residential customers can be found that support your position. I am open to making the necessary adjustments.