Snapshot: How affordable is mobile/cellular service in the Caribbean in 2014?

Our annual update of mobile/cellular affordability across the Caribbean, and to what extent has it changed since 2013.

Last week, we published our 2014 Snapshot of the likely monthly spend for mobile/cellular service based on pre-defined baskets of services, and compared those results with figures reported from 2013. In this post, and similar to what was done last year, we now examine how affordable mobile/cellular services is in the English and Dutch-speaking Caribbean for the average consumer, and compared them with the results from last year.

Methodology

In our 2014 update of mobile/cellular spend, we used three distinct baskets of mobile/cellular services, as shown in Table 1, to conduct that assessment, which is based on the Revised OECD Telecommunications Price Comparison Methodology (2006).

The key results of our review of mobile/cellular spend, based on the rates advertised for prepaid service across the region for the full basket of services, as at May 2014, are as follows:

• LV users spend on average USD 13.98 per month
• MV users typically spend USD 32.57 per month
• for HV users, their estimated monthly spend is USD 67.70
• the lowest monthly spends were experienced in Jamaica, where the amounts ranged from USD 4.69 to USD 22.93 per month
• the highest monthly spend for all baskets was recorded in the Cayman Islands, where amounts ranged from USD 23.241 to USD 107.92 per month.

This assessment of the affordability of mobile/cellular service offerings was determined by comparing monthly spends against estimated monthly income, based primarily on the latest estimated per capita Gross Domestic Product (GDP) available from the International Monetary Fund (IMF) for 2014. For countries that do not appear to have a relationship with the IMF (British Virgin Islands, Cayman Islands, the countries of the Netherland Antilles, and Turks and Caicos Islands), per capita GDP data for 2012 from the United Nations was used. The resulting ratios, which have been expressed as percentages, indicate the proportion of a person’s income that would be spent on mobile services. The higher those percentages are, the less affordable these services might be to the average consumer.

How affordable is mobile/cellular service in 2014?

The affordability of mobile/cellular service varied considerably across the region, and as shown in Figure 1 below, became more dramatic from the LV basket to the HV basket of services. With regard to the LV basket, the smallest proportion of a person’s monthly income would most likely be spent in Trinidad and Tobago at 0.47%, whilst the same basket of services would likely consume approximately 4.50% of a person’s monthly income in Belize.

For a MV basket, Trinidad and Tobago again recorded the lowest proportion of monthly spend, 1.07%, but for a HV basket, that distinction went to the Cayman Islands, where, the average Caymanian would spend approximately 2.35% of his/her monthly income.

On the other hand, Belize recorded the highest proportion of monthly spend for both the MV and HV baskets. A MV basket of service would account for approximately 10.44%, whilst for a HV basket of service that percentage would jump to approximately 20.68% of a person’s monthly income.

Across the group of countries assessed, the average share of a typical monthly income spent on:

• a LV basket of service, is 1.45%
• a MV basket of service, is 3.40%
• a HV basket of service, is 7.09%

Are we spending more for mobile/cellular service in 2014 than last year?

Over the past year, there have been some changes in the portion of monthly income spent on mobile/cellular service in all of the countries assessed, as shown in Figure 2. An increase in the share of monthly income between May 2013 and May 2014 ranged from 0.03% in Saint Kitts and Nevis for a LV basket of services, to 5.16% in Dominica for a HV basket of services. Similarly, a decrease in the share of monthly income ranged from -0.01%, in Antigua and Barbuda, the Cayman Islands and Jamaica for a LV basket of services, to -1.31% in Saint Vincent and the Grenadines for a HV basket of services.

On average across the Caribbean region, and for each basket of services, there would have been a net increase in the portion of monthly income spent on mobile/cellular services between May 2013 and May 2014. This increase was approximately: 0.86% for a LV basket of service; 1.88% for a MV basket of service; and 4.05% for a HV basket of service.

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