Snapshot: update on the affordability of Internet service in the Caribbean in 2014
A 2014 update of how affordable Internet broadband service is across the Caribbean.
Since May 2011, and following on from our most recent Snapshot of Internet speed and pricing, we have been regularly assessing the affordability of Internet broadband service across the Caribbean. In recent years, there has been growing emphasis by Internet Service Providers (ISPs) and policy makers on the Internet, as it is seen as a critical driver of competitiveness, along with economic and social development. However, in order to narrow the digital divide, and to promote greater use and innovation by a wider cross-section of our citizens, the Internet access must be affordable. Here, we update our findings on affordability, and discuss some of the changes that have occurred since the last exercise.
In our most recent Snapshot: 2014 update of Internet speeds and pricing across the Caribbean, we examined the variation of fixed-line Internet download speeds and monthly pricing for select Internet plans across a number of Caribbean countries. Specifically, and focusing on a sample of ISPs, we:
- determined the best monthly rates for a fixed broadband Internet service plan with an advertised download speed of 2 Mbps
- identified the best fixed broadband Internet plan by advertised download speed for up to USD 60.00, and
- compared the monthly rates for a 2 Mbps fixed broadband Internet plan against those recorded in 2013.
Having examined monthly pricing, this review focuses on the affordability of those Internet plans. The prices captured in the Internet spend exercise have been 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 2014?
Similar to our recent Internet speed and spend exercise, we have increased the countries assessed from 17 to 19, by including Aruba and Curacao from the Dutch Caribbean. Nevertheless, in 2014, there is still a wide variation across the region in the proportion of a person’s monthly income spent on Internet service. Figure 1, shows the percentage of monthly income that could be spent on an Internet service plan with an advertised download speed of 2 Mbps. It is highlighted that the ISPs included from Bahamas and Guyana, did not offer 2 Mbps Internet plans, and so have not been included.
The proportion of income consumed ranged from 1.2% in the Cayman Islands, to 30.3% in Belize and 12.6% in Saint Vincent and the Grenadines. Across the region, the proportion of a typical monthly income that could be expended on a 2 Mbps plan when averaged across the countries assessed is approximately 5.7%. Without Belize, which it could be argued unduly skews the results, that average drops to 4.2%. For an Internet plan with an advertised download speed of up to 4 Mbps, only nine of the 19 countries offer such a plan, as shown in Figure 2. The impact of this plan ranged from as little as 1.2% of the typical monthly income in the Cayman Islands, to approximately 49.3% of the typical monthly income in Belize. The average across that small group is 11.8%, and excluding Belize, it would be in the region of 7.1%, of a person’s monthly income.
With regard to Internet plans with advertised download speeds of 8 Mbps, again nine of the 19 countries examined offer such an option. Figure 3, shows the percentage of monthly income such a plan would consume in those countries.
For the countries included in Figure 3, an 8 Mbps plan would cost between 2.3% and 88.5% of the typical monthly income, in the Cayman Islands and Belize respectively. The average across that grouping, excluding Belize, would be approximately 7.9%, but with Belize that figure would jump to 16.9% of a typical person’s monthly income.
How has affordability changed since May 2012?
Since May 2012 and across all of the countries reviewed, there has been some change in the portion of monthly income that a 2Mbps Internet plan would consume, as reflected in Figure 4. The exceptions are Aruba and Curacao, which are new entries to our review, and Guyana, for which pricing for a 2 Mbps Internet plan could not be readily found. Between 2012 and 2014, the most significant changes were registered: in Saint Lucia, where the portion of monthly income spent decreased by -4.4%; Barbados, where that percentage dropped by -3.4%; and Anguilla, where the percentage dropped by -2.3%. Conversely, only four 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, +1.7%, was recorded in the Turks and Caicos Islands, followed by Dominica at +0.6%, and the British Virgin Islands at +0.5%.
Within the past year, between May 2013 and May 2014, there was a general decrease in the portion of monthly income that would be spent on a 2 Mbps plan. The largest drops were recorded in Suriname, -3.7%, followed by Trinidad and Tobago and Anguilla, at +2.1% and 1.1%, respectively. On the other hand, increases in the portion of monthly income that would be spent on 2 Mbps plan, were recorded in the Turks and Caicos Islands, +1.7%, the British Virgin Islands, +0.5% and in Saint Vincent and the Grenadines, +0.3%.
A few thoughts…
Over the period in which we have been tracking the affordability of fixed-line broadband Internet service, since May 2011, generally, pricing for Internet service have been falling and so is consuming less of an average person’s income, as reflected in Table 1. Across the Caribbean (again excluding Belize and Guyana), the averaged proportion of monthly income spent on a 2 Mbps fixed broadband Internet plan is continuing to decline, though the rate appears to be slowing.
Having said this, it is important to highlight that ISPs have been increaasing the download speeds offered. In some instances the prices for a particular plan, e.g. a 2 Mbps plan might be reduced; however, ISPs appear more inclined to maintain the price point but increase the speed. Hence, while the price per Megabit per second might be dropping, overall, the pool of persons who can afford to subscribe for service might not necessarily be widening at an heighten rate as expected. ____________