The poor quality of telecoms service across the Caribbean region has been a point of contention for several years; and instead of getting better, it appears to be getting worse. Here we outline three reasons what that might be the case.
You may have missed in this week’s regional news, but over the course of two days, 18 and 19 November, most of Barbados was without electricity. Many businesses, included regional and international organisations, had to close their offices, due to the extensiveness of the outages, and consumers were up in arms about the inconvenience experienced. Moreover, and in the public domain, the incumbent provider, Barbados Light and Power, was accused of not having sufficient contingency in place, especially for such an essential service.
Unlike many other Caribbean countries, the electricity service in Barbados is quite good. The terrain is relatively flat, which has resulted in excellent coverage, and the country rarely experiences tropical storms and hurricanes, so the reliability of the service is also quite high. Hence, power outages in Barbados tend to be the exception, rather than the norm, and the 2-day outage earlier this week is likely to prompt some careful re-examination of the status quo in Barbados, in order to limit its reoccurrence and impact of such an extensive outage.
In a similar vein, the quality of the telecoms service provided in the Caribbean region, and in individual Caribbean countries is uneven, at best. In Jamaica, for example, and over the past several months, mobile/cellular and broadband Internets service outages have been a regular occurrence. They seem to occur without rhyme or reason, and rarely are any public announcements made – ether prior to the outage, or once an outage has been occurred. However, as was noted in recent ICT news roundups, the poor quality of service has reached the attention of the regulator, who reportedly is now engaging the providers on the matter:
DIRECTOR general of the Office of Utilities Regulation (OUR) Ansord Hewitt says the agency expects network upgrades by local telecommunications firms, Digicel and Flow, to be carried out with minimum dislocation to customers…
He said that the OUR is aware that service disruptions are continuing, and pointed out that the organisation will use its resources to ensure that the source of the issues are identified and fixed in as short a time as possible, so as to mitigate the harm being done to consumers and businesses.
Hewitt made it clear that the OUR had serious concerns about the current service levels, and what appears to be a lack of diligence in their resolution.
(Source: Jamaica Observer)
Although electricity and telecoms are different markets, there are some commonalities between these two formerly unregulated sectors. Hence, whilst our focus will be on telecoms and ICT, some of our observations and reasoning might also apply to the electricity sector as well.
1. Too little investment in the plant
Thanks to competition in the telecoms and ICT markets across the Caribbean, increasingly, providers have had to adopt leaner business models and more streamlined operations. In some countries, providers regularly report financial losses, which not only tends to suggest that the business might not be as robust as it previously had been, but also that there might be little to allocate towards capital expenses, such as for the maintenance and upgrade of the plant.
Due to among other things such as malfunction, the effect of salt and corrosion (which can accelerate wear and tear), network reconfiguration, along with equipment reaching end of life, there are a myriad of reasons why a telecoms company may need to invest in new equipment. However, those investments can be costly, and the organisation might not readily possess the means though which to do so. As a result, and instead of being proactive, it may opt to wait until it is absolutely necessary before changing out any major pieces of equipment.
2. Lack of local control of the purse strings
In the Caribbean region, our major telecoms service providers, Digicel and Flow, are foreign-owned, and need to be profitable for their owners. However, even for smaller locally-owned providers, there is still the imperative to provide a good return on investment for their shareholders. Hence, there may be a greater emphasis on paying out dividends on a regular basis, instead of reinvesting the profit back into business, in order to improve operations and/or the quality of the services delivered.
With regard to the regional providers, in particular, to a considerable degree, they have both centralised management of their operations in the region. As a result, country heads no longer tend to operate as autonomously as they had been before. Budgeting decisions and operational priorities are being set by the regional office or by headquarters, and there may little scope for investment-heavy problems to be remedied (in a timely fashion).
3. The impact of theft and vandalism
Finally, and although this problem might exist across the region, it seems to be especially prevalent in Jamaica. On a fairly regular basis, telecoms providers are reporting the theft of items such as batteries, fuel, generators and copper cables, along with damage to their networks. Recently, Digicel Jamaica reported that these losses amounted to almost USD 2 million over the past two years (Source: Loop Jamaica).
With such rampant theft and vandalism, which can occur at almost any time, the reliability and quality of the service cannot be guaranteed. Further, depending on the theft and/or vandalism that has occurred, and its location, it may take hours or days for the matter to be remedied. However, it also means that the individuals, households or communities affected by the damaged may either experience poor, or no, service in the intervening period.
In summary, and as our dependence on telecoms and ICT in all aspects of our daily lives continues to grow, our tolerance for poor quality service is decreasing. Although the firms have control over the amount and frequency of investments they are prepared to make, they are commercial ventures. Ultimately, and at the very least, they ought to be sustainable; and ideally, providing a reasonable return to their investors.
However, many of the telecoms companies across the Caribbean region are required to operate in environments that can be described as ‘challenging’ at best. Hence, and as a final thought, we perhaps need to consider what more we can do – especially with respect to policy and regulation – to create a more attractive and enabling environment, in order to better protect and support the services that have become essential to us.
Image credit: Stephan Ridgway (flickr)
