With the growing dissatisfaction in the poor quality of the broadband Internet service that is being experienced across the Caribbean region, there are growing calls for Governments to intervene. However, in doing so, Governments may need to invest in infrastructure, which many have been reluctant to do.
Without much prodding, most Caribbean consumers will express dissatisfaction with the quality of the fixed-line broadband Internet service they are receiving. Typically, slow transmission speeds, service reliability, and the correspondingly questions with respect to value for money, would be key points of contention. However, these issues have become even more pronounced since children are not at school and more people are working from home, in order to reduce the rate of infection of the novel coronavirus, also known as COVID-19.
Essentially, and with the increase in video streaming, along with online meetings, online classrooms, online collaboration, and commercial transactions that are now occurring on residential connections, some providers have reported from 40% to at least 80% increase in broadband demand over the last four to six weeks. Although complaints have been made about the connectivity-related challenges being experienced, and the network operators are aware of them, the needed remedies might not be forthcoming in the immediate future.
The investment conundrum
In order to provide telecoms services, particularly the fixed-line broadband Internet service, to the standard that eliminates the issues so many of us have been experiencing, requires considerable investment. The infrastructure would require upgrading, such as new and additional fibre-optic cables being deployed and new equipment being installed. However, when the cost of the investment is considered against the small sizes of our populations across the Caribbean region, and the rates that we pay for the services offered, the business case does not work and the investment is not made.
Increasingly, and over the past few years, the major telecoms companies have been advocating for governments to invest in infrastructure. The model that tends to be suggested is one where government owns (part of) the network, and the telecoms companies buy or lease the capacity they need.
To date, there is a general sense that most Caribbean governments are not pursuing the chance to become infrastructure owners for essentially the same reason the telecoms companies are not making the investment: the cost. Over the past several years, and to varying degrees, most Caribbean countries had been struggling to keep afloat, and the economic downturn anticipated thanks to COVID-19 will exacerbate the situation considerably. Moreover, and for at least the past decade (depending on the country), most countries no longer have a stake in any of the telecoms companies that operate in their jurisdiction, and have taken an arm’s length approach to telecoms and ICT, having vested oversight authority in the regulator. So why should they step back into the owning infrastructure, when there has been a growing trend of governments devolving or otherwise scaling back their ownership of traditional government-owned assets?
1. The needed upgrades may not happen otherwise
Although consumers and governments alike can seek to pressure Digicel and Flow, which own and operate most of the terrestrial telecoms and ICT infrastructure across the Caribbean region, along with other network owners, the most likely outcome is that a relatively nominal investment will be made. It would not be at the scale needed to substantially improve the status quo, but perhaps would address a few of the most glaring deficiencies.
Another important consideration would be timing. Would the current network operators be prepared to make the investment now? Budgets would already have been approved for the current financial year, and so in principle, it may be considered for the next fiscal. However, one may still have the viability debate to overcome in order for the proposed spend – even if it just facilitate minor improvements – to be approved.
Although the means through which governments would be able to secure the requisite funding may also be protracted, the justification threshold may be much lower. Further, with ICT increasingly underpinning economies worldwide, ensuring that countries possess quality infrastructure to facilitate global competitiveness, could be a compelling argument.
2. Leveraging telecoms and ICT may be key to our longer term economic recovery
Following from the previous point, and over the past decade or so, several studies have been published on the impact of increased broadband Internet penetration on a country’s per capital Gross Domestic Product (GDP). The results indicated that there was a relationship between the two elements. For example, 10% increase in household broadband penetration resulted in an increase in per capita GDP of 1.35% for developing countries and a 1.19% increase for developed countries.
However, even as we are all currently in the throes of trying to manage COVID-19, telecoms and ICT has become even more integral to our economical and personal survival. Both the public and private sectors have had to leverage technologies in ways they may have been initially resistant to pursue; but today, our economies would be considerably worse off – if we were not trying to finds ways and means to leverage telecoms and ICT.
It must be also be highlighted that although tourism may have been the largest income earner for many Caribbean countries, currently, it is recovery is uncertain – until we can effectively manage the virus. Notwithstanding, tourism could be one of the last sectors to recover, until people’s income and financial stability become more assured.
In the meantime, countries will need to find ways to rebuild their economies quickly, and services that leverage telecoms and ICT will be even more crucial in that regard. Due to the current state of our infrastructure, we may be challenged in securing the local and foreign direct investment that will be needed.
3. It can be used as leverage for improved quality
One of the most frequently heard complaints across the region is the fact that the transmission speeds being experienced are considerably less than the maximum stated for the plan purchased. Although one might not expect to experience the maximum possible speed all the time, at the very least the hope should be that at least 70—80% of the time, at least 70—80% of that ceiling is experienced, and that transmissions speeds do not fall below a specified floor.
If governments become infrastructure owners, it may be possible for conditions to be instituted to ensure service quality and reliability by the entities that lease capacity, thereby addressing one of the biggest challenges experienced by both residential and commercial customers. As infrastructure owners, governments would also have access to a broad range of data, particularly those related to the fixed-line broadband Internet traffic in country, which currently, tends not to be readily shared by the privately-owned operators.
In summary, any proposal for government to rollout a high speed broadband network has been an tremendous undertaking, but has been successfully implemented by some countries worldwide including Singapore, Malaysia and South Korea. More importantly, those countries currently enjoy world-class connectivity and among the fastest transmission speeds in the world. Although a significant investment would be needed, we ought to consider it within the context of our future over the long term, and the extent to which our continued economic and social development would be enhanced to the benefit of our citizens and for future generations.
Image credit: Gino Crescoli (Pixabay)
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