Though there is has been a consistent push for more competition in the Caribbean region, it is still plagued with poor quality telecoms service. We discuss a key reason why.


Over the past two weeks or so, and across the Caribbean, customers of regional telecoms carrier, Flow, experienced either a series of major outages or sporadic Internet service. Though no detailed explanation has been given for the service disruptions, to varying degrees, service appears to have returned to some semblance of normalcy. However, in Jamaica, the IT-enabled outsourcing industry has been up in arms about the poor quality of telecoms service it has been experiencing for the past few months, “with little or no accountability from the providers”:

…Despite the liberalisation of the telecoms sector, Jamaica’s telecoms cost remains one of the highest among countries in Latin America and the Caribbean region – over 40 per cent more than its competing counterparts… A robust and reliable telecom infrastructure is critical to the growth and expansion of the BPO industry…

…And while we fight the struggle of high telecoms costs, we are unable to survive inconsistency in service and lack of appropriate accountability for failed redundancies…

… We sell Jamaica as an ideal destination of outsourcing because of the labour pool, the infrastructure, the government support, and the incentives, [but] with issues such as these, it undermines our strength because the infrastructure is shaky and the Government is not holding those responsible accountable.

(Source:  Jamaica Gleaner)

The displeasure expressed by the Business Process Industry Association of Jamaica is understandable: telecoms is the lifeblood of that industry. However, as occurred in several countries across the region, the sale of Columbus International Inc. to Cable and Wireless Plc in 2014 resulted in the loss of a major carrier, and a truly equivalent alternative to LIME/Flow and its business customer-focussed arm, C&W Business, across most key market segments.

Having said this, and as we have discussed in previous articles, mergers and acquisitions generally, and within the Caribbean more specifically, are to be expected in order to improve the economies of scale and scope in the provision and delivery of telecoms services. However, it also means not only can we end up back where we started – with a single, monopoly carrier – but for businesses for which consistent and quality service are absolutely essential, there is no carrier redundancy; no choice of service providers that could act as backups when needed.

Are Caribbean countries truly able to support telecoms competition?

Due to the small population size of the majority of Caribbean islands, they tend to have no more than three main carriers, providing combinations of fixed-line telephony, mobile/cellular communications, Internet, and subscriber/cable television. Following the loss of one or more carriers, through a merger or acquisition, governments can be eager to secure another entrant for the sector. However, with the maturing sectors that currently exist across the region, it can be difficult for prospective investors to truly identify opportunities that could result in a reasonable return on investment. Further, technical limitations, such as the unavailability of radio frequencies in specific bands, and or (dialing) numbers, can also hinder countries in licensing new entrants.

Can the situation be better managed?

Across the region, and to a considerable degree, the legal and policy frameworks for telecoms regulation has adopted arm’s length posture for some telecoms services, such as Internet service, for which very little regulatory oversight is given. For others, such as fixed line telephony and mobile/cellular communications, very detailed regulatory rules are in place, which are proactively implemented.

However, it must be emphasised that the purpose of regulation, particularly in the telecoms sector, is to mimic competition; and where there is competition, regulatory forbearance should obtain. Hence as the Caribbean continues to go through cycles declining competition, it would be fair to expect increased regulatory oversight and intervention to compensate for the loss of players when it occurs.

In summary, there is much more that Caribbean telecoms regulators could be doing to monitor the quality of the services delivered in their respective countries, and to hold the providers more accountable when that quality falls below the expected or agreed standards. Depending on the country, the matter could be secondary legislation, such as Regulations, which tend to provide more detailed guidelines and processes when addressing specific technical issues, such as quality of service, especially as it relates to the provision of Internet service to residential and business customers.

 

Image credit:  SlugsOnTheRefrigerator (flickr)

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