«

»

May 03 2013

Print this Post

Snapshot: Caribbean mobile/cellular spend update 2013

This is a 2013 update to our mobile/cellular spend Snapshot, to determine the extent to which a person’s monthly spend on mobile/cellular services has changed across the English-speaking Caribbean.

In May 2012, we provided a snapshot of the likely monthly spend for mobile/cellular service based on pre-defined baskets of services, which updated our May 2011 assessment. In this post, we again examine mobile/cellular prices across the English-speaking Caribbean to determine the extent to which monthly spend has changed since our last review a year ago.

Methodology

Calculation of the monthly spend for mobile/cellular service in the region has been guided by the approach set out in the Revised OECD Telecommunications Price Comparison Methodology (2006).  The methodology specifies three service baskets, based on the volume of voice calls, text and multimedia messages as shown in Table 1.

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

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

Our calculation of monthly spend across the Caribbean used the prepaid rates advertised by the two largest mobile/cellular operators per country, where applicable, and single operators, where there is still a monopoly in the market. Table 2 lists the operators and countries included in our assessment. The rates used in our calculations were sourced from the operators’ websites, as at 1 May 2013.

List of mobile operators

Table 2: Countries and mobile/cellular operators included in 2013 snapshot (Source: ICT Pulse)

Monthly spends were calculated in the local currency and then adjusted to United States Dollars (USD), using currency exchange rates as at 1 May 2013.

2013 monthly spend results

For all baskets of usage, the lowest monthly spends, as of May 2013, would be experienced in Jamaica, where the amounts ranged from USD 4.69 per month for Low Volume (LV) users, USD 10.72 per month for a Medium Volume (MV) users, to USD 22.93 per month for High Volume (HV) users. On the other hand, the highest monthly spend across all baskets was recorded in the Cayman Islands, where amounts ranged from USD 23.23 to USD 107.08 per month.

Figure 1:  Monthly spend on mobile/cellular service in select Caribbean countries as at May 2013 (Source: ICT Pulse)

Figure 1: Monthly spend on mobile/cellular service in select Caribbean countries as at May 2013 (Source: ICT Pulse)

Some additional observations:

  • Across the region, LV users would spend on average USD 13.90 per month, and several countries are within ±USD 2.00 of that amount – Grenada (USD 11.95), Anguilla (USD 13.48), Saint Lucia (USD 13.96), Saint Kitts & Nevis (USD 14.47), Antigua and Barbuda (USD 14.77), and Saint Vincent and the Grenadines (USD 14.94).
  • On the other hand, MV users across the region would spend on average USD 32.45 per month, however, it is only Saint Kitts & Nevis (USD 30.52), Anguilla (USD 31.48) and Saint Lucia (USD 32.93) where the calculated monthly spends are close (±USD 2.00) to that amount.
  • Finally, for HV users, their average monthly spend across the region would be USD 66.99, but no country is within USD 2.00 of that amount.

How do the 2013 results compare with our earlier snapshots?

Since May 2012, there have been noticeable changes in the monthly spends across the three baskets of services as shown in Figure 2.  Ten of the 16 countries reviewed experienced some change in prices, which resulted in changes in monthly spend dropping by as much as 18% in Jamaica, and increasing by almost 20% in Guyana. Across the group of countries the change in spend ranged from a net decrease of 0.21% for the HV basket of services, to a net increase of 0.48% for the LV basket of services.

Figure 2:  Percentage change in the monthly spends between May 2012 and May 2013 in select Caribbean countries (Source ICT Pulse)

Figure 2: Percentage change in the monthly spends between May 2012 and May 2013 in select Caribbean countries (Source ICT Pulse)

However, since our first assessment in May 2011, the changes in monthly spends across the three baskets of services have been even more dramatic. Fourteen of the 16 countries reviewed experienced some change in prices, as shown in Figure 3, and in 10 out of the 16 countries, an increase in monthly spend would have occurred.

Figure 3:  Percentage change in the monthly spends between May 2011 and May 2013 in select Caribbean countries (Source ICT Pulse)

Figure 3: Percentage change in the monthly spends between May 2011 and May 2013 in select Caribbean countries (Source ICT Pulse)

Changes in monthly spend across the three baskets of services between May 2011 and May 2013:

  • decreased between 0.2% (British Virgin Islands) and 16% (Jamaica), and
  • increased by as little as 0.6% in the Cayman Islands, to almost 20% in Guyana.

Across the entire group of countries and over the last two years, and on average, there would have been a net increase in monthly spend ranging between 1.24% and 2.02% across all baskets of services.

Final remarks

First, although relatively nominal in most instances, it is interesting to note that mobile/cellular rates have been increasing across the Caribbean. More importantly, the increases are occurring in countries where there is competition – i.e. where there are at least two players in the market – and not in the countries where monopolies still exist and consumers have no choice of providers.

A much-touted justification by economists for introducing competition is the lower prices that would result. Although that might be the case when competition begins, that appears to be no longer true in several Caribbean countries, many of which liberalised their telecoms sectors over 10 years ago.

Second, in this assessment, the greatest decrease in monthly spend was recorded in Jamaica. However, in May 2012, Jamaica, similar to most countries examined, had realised increases in monthly spend (between 2% and 3%) since 2011. Since our May 2012 snapshot, and due  amendments in the Jamaica telecoms legislation, the regulator, the Office of Utilities Regulation, established interim mobile termination charges, which decreased the charges payable between the carriers by up to 45%. In turn, LIME in particular, quickly reduced its rates, which was subsequently mimicked by Digicel, and so is reflected in reductions in monthly spends that have now been calculated. (Note:  We published a number of posts last year on the interconnection contentions that were occurring in Jamaica. See Has Digicel been outmanoeuvred by the OUR?; Will the Jamaican regulator be successful in implementing interim interconnection rates?; and Will the proposed amendments to Jamaica’s Telecoms Act improve LIME’s competitiveness?, for further details.)

Third, currency exchange rates have remained relatively constant since May 2011. Hence, they would not have been a significant contributor to the changes in monthly spend that have been reported.

Finally, it is again emphasised that it is easy to overlook the seemingly small changes in monthly spend, and even the actual rates you are paying, but they do add up. As was noted in last year’s snapshot:

…the impact of those changes might not be readily apparent when dealing with smaller figures. For example a 10% increase in a calling rate of $0.10, is $0.11, which might easily be overlooked. However, the same 10% increase in the amount spent per month, say $50.00, is $55.00, which adds $60 to your bill per year!

 

Stay tuned for our 2013 update of the affordability of mobile/cellular service later this month!

_____________

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-caribbean-mobilecellular-spend-update-2013/