Snapshot: 2015 updated of mobile/cellular spend across the Caribbean
A 2015 update of our mobile/cellular spend Snapshot, to determine the extent to which mobile/cellular calling rates have changed across the Caribbean.
Since 2011, we have been sharing some insights on the likely monthly spend for mobile/cellular services in the Caribbean based on pre-defined baskets of services. In this our latest exercise, we again have increased the pool of countries examined to 21, by including Bonaire, of the Dutch Caribbean. However, unlike previous years, we limited our review to mobile/cellular calling rates across the Caribbean, and examined the extent to which they have changed since our May 2014 review exercise.
Our review of the monthly spend for mobile/cellular service in the Caribbean has been guided, in part, by the approach set out in the Revised OECD Telecommunications Price Comparison Methodology (2006). The methodology sets out three service baskets, shown in Table1, which suggest the volume of voice calls, text messages (SMS), and multimedia messages (MMS) generated by hypothetical users.
Due to the uneven availability data on SMS and MMS rates across the countries examined, the calculations limited to the prepaid calling rates advertised by the two largest mobile/cellular operators per country, where possible. In countries where there is still a monopoly in the market, the rates of the incumbent operator were used. Table 2 lists the mobile/cellular operators included in this assessment. The rates used were sourced from the operators’ websites, as at 30 June 2015.
Monthly spend was calculated in the local currency and then converted to United States Dollars (USD), using currency exchange rates as at 30 June 2014.
2015 monthly spend results
Using the mobile/cellular calls volumes stated for the three baskets of usage, first we compared the hypothetical monthly spend on mobile/cellular calls only, i.e. calls made on the same network; calls made to other mobile/cellular networks and calls made to the fixed network. Figure 1 shows the results.
For all call volumes, the lowest monthly spends on calls only, as of June 2015, would be in Jamaica, where the amounts ranged from USD 1.03 per month for Low Volume (LV) users, USD 2.65 per month for a Medium Volume (MV) users, to USD 5.90 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 20.13 to USD 106.88 per month. Additionally, for mobile/cellular calls only across the region, on average:
- LV users would spend approximately USD 12.59 per month
- MV users would spend approximately USD 31.94 per month
- HV users would spend approximately USD 69.15 per month.
How does the 2015 spend results compare with those for 2014?
Over the past year, there have been noticeable changes in the monthly spend for mobile/cellular voice calls across the countries examined, as shown in Figure 2.
Virtually all of the countries, with the exception of Aruba, the Bahamas and Suriname, experienced some change in prices, which also reflects directly on the calling rates established by the local mobile/cellular operators.
The following changes in monthly spend were recorded:
- for the LV basket of services, spend changes ranged from approximately -68.1% in Jamaica, to +18.0% in Dominica
- for the MV basket of services, spend changes ranged from a drop of over -68.4% in Jamaica, to an increase of over +15.2% in Curacao.
- for the HV basket of services, the changes in monthly spend ranged from an increase by over +17.2% in Curacao, to a decrease of -69.0%% in Jamaica.
Further, attention is drawn to the fact that Guyana, Jamaica and Sint Maarten were the only countries that recorded a decrease in their calling rates. However in Jamaica, the decrease was considerable: a minimum of -68% from those that were effective in May 2014 when the last assessment was performed. For the remaining countries, slight increases in monthly spend, and by extension mobile/cellular calling rates, were evident between May 2014 and June 2015.
Although most countries expect that competition will drive down mobile/cellular prices, over the past year and in 14 of the 21 countries examined, the rates actually increased. Most of those increases were relatively marginal, and could perhaps in part be attributed to increased operating costs, costs of doing business, and inflation.
In Jamaica where a decrease in mobile/cellular calling rates of over 65% occurred over the period under review, in June 2014, following a ruling of the local regulator, the Office of Utilities Regulation, on interconnection rates payable, LIME dropped its mobile/cellular calling rates to a flat JMD 2.99, from over JMD 8.39. Digicel followed suit, and reduced it rates to JMD 2.95.
Further, it was noted that many operators are aggressively promoting a variety of plans and packages to prepaid customers, such as “Digicel’s Gimme 5 Plan” and LIME’s “Talk EZ” plan. With these plans, customers tend to enjoy a range of benefits and discounts, which may also affect their call volumes and calling behaviour (e.g. time of day when call are made). Additionally, the impact of mobile/cellular data, and over-the-top services, such as Skype, WhatApp and Viber, should not be underestimated, as these are affecting how individuals use their mobile phones, and their calling patterns.
Finally, in light of the changing dynamics of the mobile/cellular sector in the Caribbean, and by extension, the changes in customer behaviour, we, here at ICT Pulse, intend to revisit the methodology we have been using for this exercise. Stay tuned…