In 2001, Digicel launched its service in Jamaica, which was also a signal of the change that was beginning to occur in telecoms in the Caribbean. In this article, we look back at some of the ways in which the region’s telecoms landscape has changed in the past 20 years.
In newspapers in Jamaica last week, and as reported in this week’s Roundup, there were articles commemorating Digicel’s 20th anniversary in Jamaica. Although this milestone might seem relevant only to Jamaica, it must be highlighted that Jamaica became the launch pad for Digicel – now a global company with a presence in 32 markets across the Caribbean, Central America and the Pacific.
In the coming years, Digicel will be celebrating 20 years in other Caribbean countries, such as Saint Lucia and Saint Vincent and the Grenadines, starting in 2023. However, as we focus on transitioning our societies to digital economies and knowledge-based societies, figuring out how best to leverage 5G technology, or even what might be our next smartphone purchase, it may be opportune to revisit how the telecoms landscape in the region has changed since 2000/2001, when the company we know as Digicel first came on the scene.
Back then…
Clearly there would be many things that could be said about the state of the telecoms sector in the Caribbean 20 years ago. Below, we outline just a few of the markers.
High rates and limited access to service
Back in the 1990s, telecoms rates were high – and when we say ‘telecoms’, basically we are talking about fixed-line (or landline) voice telephony. Mobile communication did exist, albeit first and second generation technology, but there was limited deployment of networks, primarily to cities and large towns.
With regard to landlines, not only were the rates high generally, in some countries there were different rates for local and trunk calls. International calls were incredibly expensive – depending on the country, one could be paying around USD 2.00 per minute. Moreover, a new service connection could take weeks, or even months, especially if service availability was limited in the area.
At the country-level, many of our countries were grappling with the loss of preferential treatment for our agricultural produce, such as bananas, and were trying to transition to services-based economies. A key challenge many Caribbean countries had to acknowledge was the high cost of telecoms service, which made them uncompetitive when compared with other jurisdictions.
At the time, and across the region, particularly the English-speaking Caribbean, there was single telecoms company, Cable and Wireless, which enjoyed exclusive monopoly arrangements. Moreover, and at the time, there was little recourse available to address the high rates and poor quality of service that customers were experiencing. Regulatory frameworks did not exist, and Cable and Wireless was the only game in town.
Telecoms reform takes hold
To a considerable degree, economics and the need to improve competitiveness were the impetus for many Caribbean countries to embark upon telecoms reform, which resulted in the end of the monopoly arrangements, the liberalisation of telecoms sectors, and introduction of regulation. In some instances, it was a ‘knock-down drag-out fight’ with the incumbent, Cable and Wireless, as it was not prepared to willing relinquish the distinct benefits it had enjoyed for decades.
Although eventually countries were able to end the monopoly and liberalise their telecoms markets, regulation would be critical to fostering competition. Generally, regulation is a tool to mimic competition when it is absent. Further, with a powerful incumbent, regulatory controls are crucial to ensure that it does not unduly wield its power in the market, thus undermining new players and their ability to gain traction in the market.
Introduction of low-cost mobile/cellular service
On the heels of liberalisation in the Caribbean region, Digicel came on the scene, starting in Jamaica, and offering low-cost mobile/cellular service. It deployed its network widely, and ended up have first-mover advantage in many communities, particularly in rural areas that had received little or no coverage from the incumbent.
Moreover, and perhaps most critically, Digicel understood the consumer, and the fact that many people would not be comfortable with, or could not readily afford, post-paid plans. Even if the incumbent did offer prepaid plans, the rates were so exorbitant, few consumers would have taken up the offer. So with a heady cocktail of low-cost plans, wide service coverage, and a range of prepaid packages, telecoms service became more accessible, even to individuals in low-income households.
Now..
The region’s telecoms sector bears little resemblance to what it was 20 years ago. Once again, there are many hallmarks, but we have outlined three.
Caribbean consumers have become more sophisticated
This heading is by no means a criticism, but rather an acknowledgement of how much the Caribbean consumer has evolved over the years. Back in the day, the telecoms companies had all the control. If one did not like their service, there was really no alternative. However, with competition in many key segments, there is scope for customers to vote with their feet, and take their business elsewhere.
Additionally, we have to highlight the game-changing nature of the internet: not just as a technology and service, but rather the speed at which it allows information to be disseminated. As a result, there now little or no lag in new developments in technology being shared globally, thereby increasing our knowledge and perspective of what might be possible, and consequently, our expectations of the types, quality and standards of service we ought to be receiving.
Over-the-top services have changed the paradigm
Following from the previous point on the loss of power of telecoms companies, that loss of power has not been limited to consumers having choice and greater expectations. Traditionally, the telecoms companies would have seen themselves as the gatekeepers to their customers, meaning that they controlled access to subscribers on their networks. As a result, it is usually the entity that wants to connect to subscribers on their networks that pays.
However, that paradigm is being eroded by the fact customers are proactively accessing various services via the internet, through their Internet Service Provider (ISP). Although the customer does pay for its ISP for internet access, due the bandwidth demand on its infrastructure and the revenue some of those online platforms are generating, increasingly, Caribbean ISPs are angling for the platforms to also pay to deliver content/services to subscribers on their networks, although it is their subscribers who are accessing those platforms.
Policy and regulatory framework has not kept up with the sector
Finally, and cognisant of the importance of regulation in the evolution of telecoms in the Caribbean region, in helping to manage the incumbent and in fostering competition, it Is disheartening that to a considerable degree, and across the region, the policy and regulatory frameworks have not evolved. In many instances, there has not been any significant update to telecoms legislation since the initial promulgation at least a decade (or nearly two decades) ago.
When telecoms laws were introduced that facilitated a liberalised and competitive sector, the focus for regulation was on fixed-line telephony and voice-based mobile/cellular communications. The internet was just fledging at the time, and not only did it not receive much attention, it would have been virtually impossible to have predicted how it would have evolved, and for the legislation to make adequate provisions. However, these days, voice-only services have become a minor area of focus in the telecoms landscape, and the internet – both in terms of wired and wireless infrastructure, and as the channel for the delivery of a broad range of services – is where all of the activity is happening; but the law, and the needed regulatory support, is not aligned with the times in many instances.
In summary, and with regard to Digicel, it was a company that was at the right place, at the right time. Caribbean countries were eager to reform their telecoms sectors, and Digicel had a unique strategy at the time, which allowed it to contribute to changing the trajectory of the region. What does the future hold for Digicel? Who knows? However, what is certain is that telecoms in Caribbean is evolving, and market players also need to be prepared to evolve, and to abandon long-held strategies that are no longer serving them.
Image credits: Lars Ploughmann (flickr); Streepjescode (Wikimedia Commons); Unknown Author (Wikimedia Commons); Fennoradio (Wikimedia Commons)
