A 2017 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. 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: 2017 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 19 Caribbean countries. Having examined monthly pricing, now we seek to determine the affordability of those Internet plans in the Caribbean using the following approach:
- The prices captured in the Internet spend exercise are compared against estimated monthly income, using per capita Gross Domestic Product figures, sourced from the International Monetary Fund and the United Nations, which will be used as proxies.
- The resulting ratios are expressed as percentages, which indicate the proportion of a person’s income that would be spent on the stated plans, and hence indicates the extent to which it might be affordable to the average consumer.
In this year’s review, three exercises are conducted. We:
- determine the portion of an individual’s monthly income as a percentage that could be spent on a 2 Mbps Internet plan
- determine the fastest Internet plan by download speed for no more than 5% of an individual’s monthly income, and
- for 2016 and 2017, compare the of portion of an individual’s monthly income as a percentage that could be spent on a 2 Mbps Internet plan
How affordable is Internet service in 2017?
Although 19 Caribbean countries were examined, only nine still offered an Internet service plan with an advertised download speed of up to 2 Mbps, as shown in Figure 1. For the countries not shown, their ISPs did not specifically offer a 2 Mbps plan, though other plans were available.
Figure 1: Portion of monthly income as a percentage for a 2 Mbps Internet plan in select Caribbean countries as at June 2017 (Source: ICT Pulse)
For the countries presented, there is still a wide variation in the proportion of an individual’s monthly income spent on Internet service, which ranged from 1.5% in Trinidad and Tobago, to 10.7% in Belize. Across the region, the proportion of a typical monthly income that could be expended on a 2 Mbps plan when averaged across the nine countries assessed was approximately 3.6%.
However, to provide a more inclusive examination, we have used as a benchmark, the global target set by the Broadband Commission for Digital Development’s target that the cost of fixed-broadband services should be less than 5% of monthly GNI per capita. Using that target, we have sought to determine 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 select Caribbean countries as at June 2017 (ICT Pulse)
First, it is highlighted that only 17 countries satisfied the requirements for consideration. The exceptions were Guyana and Saint Vincent and the Grenadines, which offered no Internet plans that could be purchased for less than 5% of their typical citizens’ monthly income.
For the all 17 countries examined, except Belize, 5% of an individual’s monthly income would purchase an Internet plan of at least 1 Mbps. In Belize and for around 5% of a citizen’s monthly income, the fastest plan would be 512 kbps.
Outside of Belize, the slowest Internet plan were recorded in:
- Jamaica – 1 Mbps, but requiring 4.7% of monthly income
- Dominica – 2 Mbps, but requiring 4.4% of monthly income
- Suriname – 2 Mbps, but requiring 3.5% of monthly income, and
- Antigua and Barbuda – 2 Mbps, but requiring 2.9% of monthly income
On the other hand, the best value for money was recorded in Barbados, where for 3.7% of monthly income, a 150 Mbps plan could be purchased. Thereafter Aruba (100 Mbps and requiring 4.2% of monthly income), the Cayman Islands (100 Mbps and requiring 4.7% of monthly income), and the Bahamas (75 Mbps and requiring 4.87% of monthly income), offered cost-effective plans.
Is broadband Internet service becoming more affordable in the Caribbean?
Since 2014 and across most of the countries reviewed, the portion of monthly income a 2 Mbps Internet plan would consume has been decreasing. Between 2016 and 2017, and averaged across the countries sampled, the proportion monthly spend dropped by 1.7 percentage points, from 6.3% to 4.6%. 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 2016 and 2017 (Source: ICT Pulse)
may be inadequate to support the data-rich demands for today’s user and Internet environment, where there is considerable emphasis on video. Those low download speeds can result in considerable buffering, long download times, and poor quality real-time communication, all of which undermine the user’s experience.
Having said this. The download speeds of broadband Internet plans offered across the Caribbean are becoming faster. However, the price floor – for the slowest plan – is also rising as speeds increase. It therefore suggests that fixed broadband Internet service in the Caribbean is not (yet) as more inclusive as we might have hoped.
Image credit: Pexels
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Michele, hi. Why did you choose to compare 2MBps plans ijn the Snapshot: 2017 update on the affordability of Internet service in the Caribbean article?
Great article btw.
Ronald Lieuw
2nd question: What percentage of monthly income would you think is “acceptable”?
That is a very interesting question, Ronald! I don’t think I can give a definite answer, but here is my thinking…
As a reference and part of its broadband goals, the Broadband Commission has been using the target of households paying no more than 5% of its monthly income on broadband access.
In my opinion, while 5% of a household’s monthly income might be reasonable to budget for Internet access, I am more inclined to emphasise value for money – how fast is the internet plan for the price being paid?
Also, in addition to broadband Internet, a household is likely to be paying for other telecoms services, e.g. fixed-line telephony, mobile/cellular communications, and/or cable/subscriber TV, all of which would need to be budgeted for.
Hence ultimately, I am of the view that the faster the Internet plan that can be secured, the better, as there might be a whole host of other telecoms-related expenses that might also need to be factored in.
Hi Ronald,
Thanks for the question and the continued support.
The download speed, 2 Mbps, has been a widely used threshold, by organizations such as the International Telecommunications Union, when classifying an Internet service as broadband.
Having said this, and as transmission speeds continue to increase, depending on the country or region, the threshold is being lifted. For example, the Federal Communications Commission in the US has recently voted to increase the minimum download speeds in its broadband definition from 4 Mbps to 25 Mbps, and the minimum upload speed from 1 Mbps to 3 Mbps.
However, ultimately and for our purposes, the true importance of selecting 2 Mbps is really to try to have a focal point to conduct the assessment.