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May 25 2016

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Snapshot: 2016 update on the affordability of Internet service in the Caribbean

A 2016 update of how affordable Internet broadband service is across the Caribbean.

http://www.freedigitalphotos.net/images/Photography_g291-Camera_Lens_p64295.htmlSince 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. Here, we update our findings on affordability, and discuss some of the changes that have occurred since the last exercise.

Approach

In our most recent Snapshot: 2016 update of Internet speeds and pricing across the Caribbean, we examined the variation of fixed (wired and wireless) Internet download speeds and monthly pricing for select Internet plans across 18 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, and
  • identified the best fixed broadband Internet plan by advertised download speed for up to USD 60.00.

Having examined monthly pricing, this review focuses on the affordability of those Internet plans. The prices captured in the Internet speed and spend exercise have been compared against estimated monthly income, based on per capita Gross National Income (GNI) figures, sourced from the United Nations. The resulting ratios, which have been expressed as percentages, indicate the proportion of an individual’s income that would be spent on the stated plans, and hence indicates the extent to which they might be affordable to the average consumer.

How affordable is Internet service in 2016?

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. Only eight countries have an ISP that offers a 2 Mbps plan. In the countries not shown – Aruba, Bahamas, Barbados, the British Virgin Islands, Cayman Islands, Curaçao, Grenada, Guyana, Saint Kitts and Nevis, and the Turks and Caicos Islands – their ISPs did not offer a 2 Mbps plan, though higher speed ones were available.

Figure 1: Portion of monthly income as a percentage for a 2 Mbps Internet plan in select Caribbean countries as at May 2016 (Source: ICT Pulse)

Figure 1: Portion of monthly income as a percentage for a 2 Mbps Internet plan in select Caribbean countries as at May 2016 (Source: ICT Pulse)

In 2016, there is still a wide variation across the region in the proportion of a person’s monthly income spent on Internet service, which ranged from 2.2% in Anguilla, to 18.8% in Belize. The proportion of a typical monthly income that could be expended on a 2 Mbps plan, when averaged across the eight countries assessed, was approximately 6.3%.

However, as noted in Snapshot: 2016 update of Internet speed and spend in the Caribbean, most ISPs offer a broad range of Internet plans. Using the global target set by the Broadband Commission for Digital Development that the cost of fixed-broadband services should be less than 5% of monthly GNI per capita, we have sought identify the fastest Internet plan that can be secured for no more than 5% of the average person’s income, as shown in Figure 2.

Figure 2: Fastest Internet plan by download speed for no more than 5% on monthly income in 2016 (ICT Pulse)

Figure 2: Fastest Internet plan by download speed for no more than 5% on monthly income in 2016 (ICT Pulse)

First it should be observed that Barbados, Guyana, Saint Lucia and Saint Vincent and the Grenadines are not represented in Figure 2. In Barbados, a 150 Mbps plan could be secured for 5% of monthly GNI per capita, but its inclusion in the graph would unduly skew all other data points. In the remaining three countries, no plan could be secured for 5% of monthly GNI per capita; consumers would be required to spend more to secure the most basic broadband Internet plans.

For the countries in Figure 2, in Antigua and Barbuda, Belize, Dominica, and Jamaica, 5% of the typical citizen’s income would purchase the slowest Internet plan: in Belize, 256 kbps;  in Antigua and Barbuda and Jamaica, 1 Mbps, and in Dominica, 2 Mbps. As previously mentioned, and for about 4.5% of monthly income, the typical resident in Barbados should be able to secure a 150 Mbps plan. Thereafter, residents in Trinidad and Tobago and the Cayman Islands would able secure 60 Mbps and 50 Mbps plans for 3.9% and 4.0 %, respectively, of their typical monthly income.

Is broadband Internet service becoming more affordable?

Since 2014 and across most of the countries reviewed, the portion of monthly income a 2 Mbps Internet plan would consume has been decreasing. Figure 3 highlights the changes over the past year.

Figure 3: Comparison of portion of monthly income as a percentage for a 2 Mbps Internet plan in select Caribbean countries in 2015 and 2016 (Source: ICT Pulse)

Figure 3: Comparison of portion of monthly income as a percentage for a 2 Mbps Internet plan in select Caribbean countries in 2015 and 2016 (Source: ICT Pulse)

Across those eight countries, the average portion of monthly income for a 2 Mbps Internet plan dropped from 14.8% in 2015, to 6.3% in 2016.

However, unlike last year, when we had 16 countries that offered an Internet plan with an advertised download speed of 2 Mbps, this year we only have eight. More importantly, it is becoming evident that 5% of monthly GNI per capita may be insufficient to purchase an Internet plan, or it is just enough to secure the slowest plan. The speed of broadband Internet plans offered across the Caribbean is becoming faster, but the price floor – for the slowest plan – is rising as speeds increase. Hence although we may pride ourselves on the fact that we, as a region, can report faster download speeds, and comparably cheaper rates, it does not necessarily mean that fixed broadband Internet service is becoming more inclusive and affordable for all.

 

Image credit:  Sura Nualpradid (FreeDigitalPhotos.net)

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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/2016/05/snapshot-2016-update-affordability-internet-service-caribbean/