Snapshot: ITU findings on fixed broadband prices and affordability in the Caribbean 2012

Continuing with our review of the 2013 edition of “Measuring the Information Society” published by the International Telecommunications Union, this post examines fixed broadband prices and affordability in the Caribbean.

In its latest release of Measuring the Information Society, the International Telecommunications Union (ITU) examined Internet broadband prices worldwide. In addition to allowing comparisons across countries, these prices also speak to the extent to which the average consumer might find fixed broadband services affordable, and consequently, their likely take-up in individual countries. In this post, and based on the data published by the ITU on Caribbean/CARICOM countries included in its review, we will be examining fixed broadband prices and affordability across the region.

The ITU’s approach

In order to examine the extent to which fixed-broadband service is affordable, the ITU used as its baseline a post-paid fixed-broadband plan, with a minimum download speed of 256 kbit/s and a monthly usage of at least 1 GB. For broadband plans for which the data cap was less than 1GB, the excess per MB rate to top up to the 1GB minimum was added to the monthly subscription price. These prices were then considered against the Gross National Income per capita (GNI p.c.) of the countries being assessed, which can be used as proxies for the average income of an individual in the respective countries. The results are expressed as percentages, and suggest the affordability of fixed-broadband services in the countries under review.

For this exercise, the ITU included 16 Caribbean/CARICOM countries as listed in Table 1.

Table 1:  Caribbean/CARICOM countries included in the 2012 review of fixed-broadband prices and affordability (Source: ITU)
Table 1: Caribbean/CARICOM countries included in the 2012 review of fixed-broadband prices and affordability (Source: ITU)

Results

Figure 1 shows the likely monthly subscription for a 1 GB plan as a percentage of GNI per capita in 15 of the 16 Caribbean countries. Cuba has been excluded from the graph because its result, 386.9% of GNI per capita – the worst performing country out of the 169 examined – would adversely skew the graph.

Figure 1: Pricing for a 1GB fixed broadband data plan with a minimum transmission speed of 256 kbit/s as a percentage of GNI per capita in select Caribbean countries (Source: ITU)
Figure 1: Pricing for a 1GB fixed broadband data plan with a minimum transmission speed of 256 kbit/s as a percentage of GNI per capita in select Caribbean countries (Source: ITU)

Nevertheless, the countries for which the baseline data plan would represent the smallest amount relative the GNI per capita were: Trinidad and Tobago at 1.0%, followed by the Bahamas at 1.6% and Saint Kitts and Nevis at 3.5%. On the flipside and in addition to Cuba, a 1GB fixed broadband was determined to be most expensive in Haiti, where it represented 81% GNI per capita, followed by Belize at 16.3% GNI per capita.

It is interesting to highlight that the countries reported to have the lowest and highest prices as a percentage of GNI per capita are not necessary the same countries when the prices themselves are compared, as shown in Figure 2. Again, Cuba is not shown, as its price is considerably higher an all of the other Caribbean countries and would distort the graph.

Figure 2:  Pricing for a 1GB fixed broadband data plan with a minimum transmission speed of 256 kbit/s in select Caribbean countries (Source: ITU)
Figure 2: Pricing for a 1GB fixed broadband data plan with a minimum transmission speed of 256 kbit/s in select Caribbean countries (Source: ITU)

For a 1GB plan, the countries with the lowest fixed broadband prices were Trinidad and Tobago, at USD 12.30, the Bahamas, at USD 30.00, and Dominica, at USD 33.00. On the other hand, the highest fixed broadband prices were reported for Cuba, at USD 1,760.40 (not shown in Figure 2), followed by Antigua and Barbuda, at USD 54.90, and Belize at USD 50.00.

Some thoughts on the results

As you may recall, we here at ICT Pulse regularly examine and compare fixed broadband prices across the Caribbean as part of our Snapshot series. Our most recent review was published in May 2013 based on prices current as of the date of posting. This assessment by the ITU, in comparison, might be a bit dated, as the fixed-broadband prices were collected towards the end of 2012.As a result, the recent changes in broadband prices in Barbados, for example, may not necessarily be captured in the ITU’s exercise.

Having said this, the ITU’s review of fixed-broadband pricing is still useful and offers some insight into how well individual countries, and by extension the Caribbean, are performing on such a critical contributor to economic and social development. Moreover, the ITU is considered an important and authoritative resource and reference for telecoms and ICT-related data, and so can corroborate (or not) reports and findings from other sources.

Referring to the ITU’s findings, it is important to highlight that the although fixed broadband prices may vary widely across the region, the dollar figure, in and of itself might not be as important, as its likely impact on an individual’s monthly income, which suggest affordability. In countries such as Barbados and Antigua and Barbuda, where the fixed broadband prices seem high compared to other countries, their GNI per capita is considerably larger. Hence their prices as a percentage of GNI per capita is smaller percentage and so point to the fixed broadband being more affordable in those countries.

With the exception of Guyana, Belize, Haiti and Cuba, a 1GB fixed broadband data plan would likely consume less than 10% of an individual’s monthly income. In its report, the ITU highlighted favourably Trinidad and Tobago and the Bahamas, where their fixed broadband prices as a percentage of GNI per capita were less than 2%. It therefore means that the other countries in the region still have much work to do to get their prices down to that degree of affordability.

 

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2 Comments

  • I believe there’s something wrong with your calculation particularly when it comes to Haiti.
    Assuming you’re monthly internet connection is correct with approximately $47/mth, Haiti’s GNI is 1,240 per year (http://en.wikipedia.org/wiki/List_of_countries_by_GNI_(PPP)_per_capita)
    Which would mean the Price as a % of GNI for Haiti would be 45% instead of the 82% you have listed.
    Also, today you can get an internet connection for $30/mth which would bring the Price as a % of GNI to 29%

    • Hi Allen,

      We did not perform any calculations for this post. As mentioned above, all of the data was presented by the International Telecommunications Union (ITU) in its publication, “Measuring the Information Society”, which was released a few weeks ago.

      Nevertheless, with regard to your observations, please consider the following and do let us know whether there still might have been an oversight on the ITU’s part:

      (i) Haiti’s GNI per capita was based on data from the World Bank, but does not reflect purchasing power parity (PPP), as those published on Wikipedia (which we also sourced from the World Bank).

      (ii) The data we presented and the corresponding graphs were for fixed broadband service, which by the ITU’s standard, is wired broadband, such as those delivered to the home via copper, coax or fibre. Services that are delivered to customers’ premises wirelessly, are NOT considered “fixed broadband”.

      (ii) The ITU did include in its report its findings for “mobile broadband”, for services that can be accessed by mobile/cellular devices AND those that can be accessed via a computer-based connection, such as via USB dongle or wireless modem.

      (iv) We summarised those finding, which might be of particular interest to you, and for which Haiti performed considerably better. Our post can be found here.

      Once again, do have a read of our Snapshot: ITU findings on mobile broadband affordability in the Caribbean 2012, and let us know what you think.

      Cheers!
      Michele

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