Our annual update of mobile/cellular affordability across the Caribbean, and to what extent has it changed since 2018.

 

Last week, we published our 2019 Snapshot of the likely monthly spend for mobile/cellular calls based on pre-defined baskets of services, and compared those results with figures reported in 2018. In this article, we updating our findings of how affordable mobile/cellular calls are for the average consumer across the Caribbean region, and again, we compare the results with those from last year.

 

A summary of the mobile/cellular spend results

In our Snapshot: 2019 update of mobile/cellular spend across the Caribbean, 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).

Table 1: Service baskets used in 2019 mobile/cellular spend calculations (Source: OECD)

 

The key results of our review of mobile/cellular spend, based on the rates advertised for prepaid for voice calls across the region, as at May 2019, were as follows:

  • to make around 30 calls per month, on average LV users spend over USD 11 per month
  • to make around 65 calls per month, MV users spend nearly USD 30 per month
  • to make around 140 calls per month, HV users spend approximately USD 65 per month.
  • the lowest monthly spends were experienced in Jamaica, where the amounts ranged from USD 2.44 to USD 13.63 per month
  • the highest monthly spend for all baskets was recorded in Aruba, where amounts ranged from USD 21.18 to USD 188.44 per month.

 

Methodology

In 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 2019. For countries that do not appear to have a formal 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 2017 and 2016 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.

The exercise included 22 of the 23 countries reported in our article, Snapshot: 2019 update of mobile/cellular spend across the Caribbean. The country excluded was Bonaire, as per capital GDP data could not be readily sourced.

 

How affordable is mobile/cellular service in 2019?

The affordability of mobile/cellular service continues to vary considerably across the Caribbean region, and as shown in Figure 1. Further, the range in monthly spend became more dramatic as one moved from the LV basket to the HV basket of calls.

Figure 1: Portion of monthly income spent on mobile/cellular calls as of May 2019 for select baskets of services (Source: ICT Pulse)

 

With regard to the LV basket of calls, the smallest proportion of a person’s monthly income would most likely be spent in Sint Maarten at 0.34%, whilst the same basket of services would likely consume approximately 5.63% of a person’s monthly income in Haiti.

For a MV and HV basket, Sint Maarten again recorded the lowest proportion of monthly spend, of 0.80% and 1.61% of the average resident’s monthly income, respectively. On the other hand, Haiti recorded the highest proportion of monthly spend for both the MV and HV baskets. A MV basket of calls could account for approximately 12.80%, whilst for a HV basket of calls that percentage nearly double to 25.32% of a typical resident’s monthly income.

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

  • a LV basket of service, is approximately 1.61%
  • a MV basket of service, is approximately 3.60%
  • a HV basket of service, is approximately 7.36%.

 

Are we spending more for mobile/cellular service in 2018 than last year?

On the face of it, the estimated portion of the typical month income spent on mobile/cellular calls has increased – but not dramatically – since 2018, as reflected in Figure 2. Further it should be noted that Haiti and Montserrat countries were omitted from this exercise, due the fact that as new entries to the exercise, we did not have comparative data (specifically. mobile/cellular rates for 2018) for those countries.

Figure 2: Change in percentage points in the portion of monthly income spent on mobile/cellular calls between May 2018 and May 2019 in select Caribbean countries (Source ICT Pulse)

 

The estimated increase in the share of monthly income spent on mobile/cellular calls between May 2018 and May 2019 ranged from 0.01 percentage points for Saint Lucia, for a MV basket of calls, to over 1.4 percentage points increase for Suriname, for a HV basket of calls. Similarly, a decrease in the estimated share of monthly income spent on mobile/cellular calls ranged from 0.03 percentage points for the Bahamas, for a HV basket, to just over 1.0 percentage points for Dominica, for a HV basket of calls.

Additional thoughts

Additionally, it ought to be highlighted that across all of the countries for which the comparison was conducted, there was no improvement in the affordability – that is, no decrease in the share of monthly income spent between 2018 and 2019 – in the LV basket. In the MV basket, only for Dominica was a decrease in the share of monthly income spent recorded. Hence, when averaged results across the sample group were  examined, for each calling basket, a net increase between 2018 and 2019 was recorded:

  • 0.45 percentage points for a LV basket of calls
  • 0.79 percentage points for a MV basket of calls
  • 1.21 percentage points for a HV basket of calls.

However, as shown in Figure 2, the increase in the share of monthly income was by less than 1 percentage point in most instances, which statistically, it could be argued is ‘not significant’ and within the margin of error, as a number of variables, such as exchange rates, the fact that per capita GDP is being used as a proxy for Gross National Income, could influence the results.

Having said this, and as was noted in our 2019 mobile/cellular spend update, incremental increases in mobile cellular rates were recorded over the past year. Hence. the rates are changing. As we continue to track the rates, the changes occurring, and the extent to which they could be considered affordable to the typical consumer, will become even more evident.

 

 

Image credit:  Ken Teegardin (flickr)