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May 08 2013

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Snapshot: How affordable is mobile/cellular service in the Caribbean in 2013?

This is a 2013 update to our mobile/cellular affordability Snapshot – to get some insight into the proportion of a person’s monthly income that might be spent on mobile/cellular service, and how that might have changed in the last two years.

Last week, we published our 2013 snapshot of the likely monthly spend for mobile/cellular service based on pre-defined baskets of services, and compared those results with figures reported over the last two years. In this post, and similar to what was done last year, we will be examining how affordable mobile/cellular services is across the English-speaking Caribbean for the average consumer, and again  comparing those results with our findings from 2011 and 2012.

Methodology

In our 2013 update of mobile/cellular spend across the English-speaking Caribbean, we used three distinct baskets of mobile/cellular services, as shown in Table 1, to conduct that assessment, which is based on the Revised OECD Telecommunications Price Comparison Methodology (2006).

Table 1: Service baskets used in mobile spend calculations (Source: OECD)

Table 1: Service baskets used in mobile spend calculations (Source: OECD)

The key results of our examination of mobile/cellular spend, based on the rates advertised for prepaid service across the region, as at May 2013, were:

  • LV users spend on average USD 13.90 per month.
  • MV users typically spend USD 32.45 per month.
  • HV users, their estimated monthly spend is USD 66.99.
  • The lowest monthly spends were experienced in Guyana, where the amounts ranged from USD 4.69 to USD 22.93 per month.
  • The highest monthly spend for all baskets was recorded in the Cayman Islands, where amounts ranged from USD 23.23 to USD 107.08 per month.

This assessment of the affordability of mobile/cellular service offerings was determined by comparing monthly spends against estimated monthly income, based primarily on the latest estimated per capita Gross Domestic Product (GDP) available from the International Monetary Fund (IMF) for 2013. For countries that do not appear to have a relationship with the IMF (British Virgin Islands, Cayman Islands, and Turks and Caicos Islands), per capita GDP data for 2011 from the United Nations was used. The resulting ratios, which have been expressed as percentages, indicate the proportion of a person’s income that would be spent on mobile services. The higher those percentages are, the less affordable the particular basket of mobile/cellular services might be to the average consumer.

How affordable is mobile/cellular service in May 2013?

The affordability of mobile/cellular service varied considerably across the region, and as shown in Figure 1 below, became more dramatic from the LV basket to the HV basket of services. With regard to the LV basket, the smallest proportion of a person’s monthly income would most likely be spent in the Cayman Islands at 0.48%, whilst conversely, the same basket of services would likely consume approximately 4.62% of a person’s monthly income in Belize.

Figure 1:  Portion of monthly income spent on mobile/cellular service as of May 2013 for select baskets of services (Source: ICT Pulse)

Figure 1: Portion of monthly income spent on mobile/cellular service as of May 2013 for select baskets of services (Source: ICT Pulse)

The Cayman Islands and Belize remained at the lower and upper ends for both the MV and HV baskets. A MV basket of service would account for approximately 1.14% of the average Caymanian’s monthly income, but in Belize, it would be around 10.70%. Similarly, for a HV basket of service, the average Caymanian would spend approximately 2.23% of his/her monthly income, whilst in Belize, the monthly spend would account for 21.91% of a person’s monthly income.

Across the group of countries assessed, the average share of a typical monthly income spent on:

  • a LV basket of service, is 1.45%
  • a MV basket of service, is 3.39%
  • a HV basket of service, is 7.09%.

Is mobile/cellular service more affordable in 2013 than in 2012 or 2011?

Since 2012, there has been some change in the portion of monthly income spent on mobile/cellular service in all of the countries assessed, as shown in Figure 2. An increase in the share of monthly income between May 2012 and May 2013 ranged from 0.01% in Anguilla and the British Virgin Islands for a LV basket of services, to 1.04% in Guyana for a HV basket of services. Similarly, a decrease in the share of monthly income ranged from -0.02%, in Barbados and Turks and Caicos Islands for a LV basket of services, to -2.36% in Belize for a HV basket of services.

Figure 2:  Percentage change in the portion of monthly income spent on mobile/cellular services between May 2012 and May 2013 in select Caribbean countries (Source ICT Pulse)

Figure 2: Percentage change in the portion of monthly income spent on mobile/cellular services between May 2012 and May 2013 in select Caribbean countries (Source ICT Pulse)

Across the Caribbean region, and for each basket of services, there would have been a net decrease in the portion of monthly income spent on mobile/cellular services between May 2012 and May 2013. This decrease would be in the region of: 0.39% for a LV basket of service; 1.44% for a MV basket of service; and 2.60% for a HV basket of service.

Between 2011 and 2013, the changes in the impact of spend on mobile/cellular services on a person’s monthly income, are arguably more apparent (Figure 3). Net increases between the period under review ranged between 0.01% in Anguilla and the British Virgin Islands for a LV basket of service, to 0.56% for a HV basket of service in St. Kitts and Nevis. On the other hand, decreases in the share of monthly income ranged from -0.08% in Dominica and Trinidad and Tobago for a LV basket of service, to -3.54% in Belize for a HV basket of service.

Figure 3:  Percentage change in the portion of monthly income spent on mobile/cellular services between May 2011 and May 2013 in select Caribbean countries (Source ICT Pulse)

Figure 3: Percentage change in the portion of monthly income spent on mobile/cellular services between May 2011 and May 2013 in select Caribbean countries (Source ICT Pulse)

Similar to our 2012/2013 comparison, net decreases in the portion of monthly income spent on mobile/cellular services would also have occurred across the entire group of countries between 2011 and 2013. The decrease ranged from -1.11% for a LV basket of services and 3.17% for a MV basket of services, to 6.22% for a HV basket of services.

Final thoughts…

One of the points highlighted in our 2013 mobile spend snapshot was the fact that monthly spends, and as a result rates for mobile/cellular services, appear to be increasing across the Caribbean region, and specifically, the countries that were assessed. However, our examination of spend against income, using per capita GDP as a proxy, suggests that in most countries, the changes in rates that have been occurring are being absorbed by increasing incomes. As a result, the portion of monthly income spent on mobile/cellular service between 2011 and 2013, decreased in at least 10 of the 16 countries assessed.

Having said this, it is important to emphasise, as has been done in previous snapshots, that the spend and affordability assessments that have been conducted are limited to mobile/cellular services only – voice, text messaging and multimedia messaging. It does not include Internet service, mobile broadband, fixed-line telephone service, or subscriber/cable TV, and so in many instances, would not reflect the full telecoms bill borne by the average customer or household.

Hence, it is advisable, in the first instance, to decide which basket of service (Table 1) might best equate to your usage. Thereafter, using Figure 1, determine whether or not, or the extent to which, you should be concerned about the share of monthly your income that you might be spending on mobile/cellular services only. Finally, do consider the wider context of your telecoms use and engagement. Although there is a greater prevalence of pre-paid mobile/cellular subscribers the Caribbean, for which this assessment might be immediately relevant, post-paid mobile/cellular customers might be effecting higher spends than their pre-paid counterparts. Hence it is still useful to consider your spend in relation to income, to determine the extent to which you can indeed afford the level of service to which you have become accustomed.

 

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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/2013/05/snapshot-affordable-mobilecellular-service-caribbean-2013/