We have been anxiously awaiting the release of the latest telecoms statistics from the International Telecommunications Union (ITU), which we use every year to examine the state of development of telecoms – in terms of subscriptions density – across the Caribbean. Table 1 lists the countries that were included in the exercise. Since our 2015 review, we have added Puerto Rico, to bring our total to 23 countries. Again it should be noted that Bonaire, Curaçao and Sint Maarten have not been included, as the needed data does not appear to be publicly available for those countries.

Table 1: List of countries surveyed for 2015 update on state of telecoms in the Caribbean (Source: ICT Pulse)

Approach

The results presented in rest of this piece were drawn from data published by the International Telecommunications Union (ITU) and the Groupe Speciale Mobile Association (GSMA), and comprised the following for countries across the Caribbean:

• density of fixed-line telephony subscriptions
• density of fixed broadband Internet subscriptions
• density of mobile/cellular telephony subscriptions
• density of mobile/cellular broadband Internet subscriptions.

It ought to be noted that both the ITU and GSMA depend on either the government or the telecoms firms to supply the data that is eventually published. Hence it is not clear the extent to which they corroborate or otherwise validate the data published, and neither have any explanations been given for any anomalies that might be evident.

The per capita Gross National Income (GNI) was drawn from databases managed by the United Nations (UN). The GNI is useful to get a sense of a country’s the level of development, based on the average income of its citizens, and consequently their likely wealth to support the take-up and use of telecoms services examined.

Results: Fixed-line telephony market

Across the Caribbean, there continues to be a wide disparity in fixed-line telephone subscription densities across the 23 countries examined. The highest subscriber densities were reported in Montserrat, at approximately 58 subscriptions per 100 inhabitants; followed by the Cayman Islands, with almost 56 subscriptions per 100 inhabitants, and Barbados, with nearly 55 subscriptions per 100 inhabitants (Figure 1).

Figure 1: Fixed-line telephone penetration in select Caribbean countries as at 2015 (Source: ITU, UN)

On the other hand, the lowest fixed-line telephony subscriber density was reported in Haiti, at approximately 4 subscriptions per 1000 inhabitants (not per 100); Belize, at about 6 subscriptions per 100 inhabitants; and Jamaica, at around 9 subscriptions per 100 inhabitants.

Results: Fixed broadband Internet market

Data on fixed broadband Internet subscriptions in 2015 was available for 22 Caribbean countries, as opposed the 14 countries reported in our last review. The highest subscription density was recorded in Montserrat at nearly 116 subscriptions per 100 inhabitants, but it is not shown in Figure 2 in order to better present the remaining results. At less than a third of the Montserrat figure, the next highest fixed broadband Internet subscription density was recorded in Anguilla, at over 34 subscriptions per 100 inhabitants, followed by Saint Kitts and Nevis, at nearly 30 subscriptions per 100 inhabitants.

Figure 2: Fixed broadband subscription densities in select Caribbean countries as at 2015 (Source: ITU, UN)

On the other hand, the lowest fixed broadband Internet subscription density was reported in Haiti, with considerably less than 0 subscriptions per 100 inhabitants. Haiti was followed by Cuba, with 7 subscriptions per 10,000 (not 100!) inhabitants, and thereafter, Belize, with nearly 3 subscriptions per 100 inhabitants.

Results: Mobile/cellular market

Figure 3 shows the mobile/cellular subscription density in 22 Caribbean countries. Of those examined, 14 countries still reported mobile/cellular subscriptions densities over 100 subscriptions per 100 inhabitants. The highest subscription density was found in the Suriname, at approximately 178 subscriptions per 100 inhabitants. Suriname was followed by Anguilla, at around 178 subscriptions per 100 inhabitants, and Trinidad and Tobago, at nearly 158 subscriptions per 100 inhabitants.

Figure 3: Mobile/cellular penetration in select Caribbean countries as at 2015 (Source: ITU, UN)

The lowest mobile/cellular subscriptions densities were recorded in Cuba, at nearly 30 subscriptions per 100 inhabitants. Belize has the second lowest of the group, at 49 subscriptions per 100 inhabitants, followed by Haiti, with approximately 68 subscriptions per 100 inhabitants

Results: Mobile broadband Internet market

We have been able to source mobile broadband Internet subscription data for most Caribbean countries as at the end of 2015, which is shown in Figure 4. This metric covers both prepaid and post-paid mobile/cellular broadband subscriptions, but would not include Internet access by Wi-Fi.

Figure 4: Mobile broadband subscription densities in select Caribbean countries as at 2015 (Source: ITU, UN)

For the 21 countries examined, the highest subscription density was recorded in Suriname at around 60 subscriptions per 100 inhabitants, and was followed by Puerto Rico and Aruba, with 47 and 43 subscriptions per 100 inhabitants, respectively. On the other extreme, the lowest density was recorded in the British Virgin Islands, at 3 subscriptions per 100 inhabitants. The British Virgin Islands was followed by Grenada, at 5 subscriptions per 100 inhabitants, and Saint Lucia and the Turks and Caicos Islands, both with 7 subscriptions per 100 inhabitants.

Results: Region-wide trends

Finally, Figure 4 shows the subscription density trends across the Caribbean over the past eight years, 2008—2016, for the fixed-line, mobile/cellular and fixed broadband Internet services.

Figure 5: Averaged fixed-line, mobile/cellular and fixed broadband Internet subscription penetration rates across the Caribbean from 2008—2015

The density of mobile/cellular subscriptions continues to outstrip considerably those for fixed-line telephony and fixed broadband Internet. For mobile/cellular and fixed broadband Internet, there growth was experienced between 2014 and 2015, whilst there was a marginal decline in average fixed-line subscription density in the region. At the end of 2015, subscriptions density for fixed-line voice and fixed Internet broadband were around a quarter and one-fifth that of mobile/cellular service, respectively.

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Approach

In our most recent Snapshot: 2016 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 18 Caribbean countries. Specifically, and focusing on a sample of ISPs, we:

• determined the best monthly rates for a fixed broadband Internet service plan with an advertised download speed of 2 Mbps, and
• identified the best fixed broadband Internet plan by advertised download speed for up to USD 60.00.

Having examined monthly pricing, this review focuses on the affordability of those Internet plans. The prices captured in the Internet speed and spend exercise have been compared against estimated monthly income, based on per capita Gross National Income (GNI) figures, sourced from the United Nations. The resulting ratios, which have been expressed as percentages, indicate the proportion of an individual’s income that would be spent on the stated plans, and hence indicates the extent to which they might be affordable to the average consumer.

How affordable is Internet service in 2016?

Figure 1, shows the percentage of monthly income that could be spent on an Internet service plan with an advertised download speed of 2 Mbps. Only eight countries have an ISP that offers a 2 Mbps plan. In the countries not shown – Aruba, Bahamas, Barbados, the British Virgin Islands, Cayman Islands, Curaçao, Grenada, Guyana, Saint Kitts and Nevis, and the Turks and Caicos Islands – their ISPs did not offer a 2 Mbps plan, though higher speed ones were available.

Figure 1: Portion of monthly income as a percentage for a 2 Mbps Internet plan in select Caribbean countries as at May 2016 (Source: ICT Pulse)

In 2016, there is still a wide variation across the region in the proportion of a person’s monthly income spent on Internet service, which ranged from 2.2% in Anguilla, to 18.8% in Belize. The proportion of a typical monthly income that could be expended on a 2 Mbps plan, when averaged across the eight countries assessed, was approximately 6.3%.

However, as noted in Snapshot: 2016 update of Internet speed and spend in the Caribbean, most ISPs offer a broad range of Internet plans. Using the global target set by the Broadband Commission for Digital Development that the cost of fixed-broadband services should be less than 5% of monthly GNI per capita, we have sought identify 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 2016 (ICT Pulse)

First it should be observed that Barbados, Guyana, Saint Lucia and Saint Vincent and the Grenadines are not represented in Figure 2. In Barbados, a 150 Mbps plan could be secured for 5% of monthly GNI per capita, but its inclusion in the graph would unduly skew all other data points. In the remaining three countries, no plan could be secured for 5% of monthly GNI per capita; consumers would be required to spend more to secure the most basic broadband Internet plans.

For the countries in Figure 2, in Antigua and Barbuda, Belize, Dominica, and Jamaica, 5% of the typical citizen’s income would purchase the slowest Internet plan: in Belize, 256 kbps;  in Antigua and Barbuda and Jamaica, 1 Mbps, and in Dominica, 2 Mbps. As previously mentioned, and for about 4.5% of monthly income, the typical resident in Barbados should be able to secure a 150 Mbps plan. Thereafter, residents in Trinidad and Tobago and the Cayman Islands would able secure 60 Mbps and 50 Mbps plans for 3.9% and 4.0 %, respectively, of their typical monthly income.

Is broadband Internet service becoming more affordable?

Since 2014 and across most of the countries reviewed, the portion of monthly income a 2 Mbps Internet plan would consume has been decreasing. 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 2015 and 2016 (Source: ICT Pulse)

Across those eight countries, the average portion of monthly income for a 2 Mbps Internet plan dropped from 14.8% in 2015, to 6.3% in 2016.

However, unlike last year, when we had 16 countries that offered an Internet plan with an advertised download speed of 2 Mbps, this year we only have eight. More importantly, it is becoming evident that 5% of monthly GNI per capita may be insufficient to purchase an Internet plan, or it is just enough to secure the slowest plan. The speed of broadband Internet plans offered across the Caribbean is becoming faster, but the price floor – for the slowest plan – is rising as speeds increase. Hence although we may pride ourselves on the fact that we, as a region, can report faster download speeds, and comparably cheaper rates, it does not necessarily mean that fixed broadband Internet service is becoming more inclusive and affordable for all.

Image credit:  Sura Nualpradid (FreeDigitalPhotos.net)

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This year, 2015, marks our fifth review of telecoms services take up – in terms of subscriptions density in the fixed-line telephony, mobile/cellular and fixed broadband Internet markets – across the Caribbean. Table 1 lists the countries that were included in the exercise, which has not changed since 2014. It should be noted that countries such as Bonaire, Curaçao and Sint Maarten have not been included, as subscription density data for the period under review does not appear to be publicly available for those countries.

Table 1: List of countries surveyed for 2015 update on state of telecoms in the Caribbean (Source: ICT Pulse)

Approach

The results presented in the next sections have been drawn from data published by the International Telecommunications Union (ITU). However, we emphasise that although the ITU has established clear definitions for all of the indicators it collects, the countries are charged with supplying the data to the organisation. Hence it is not clear the extent to which the ITU corroborates or validates the data it publishes, and neither have any explanations been given for any anomalies that might be evident.

The per capita Gross Domestic Product (GDP), purchasing power parity (PPP), for the countries examined was drawn from a number of resources, including the International Monetary Fund (IMF) and the CIA World Factbook. The latter was especially useful for countries that are colonies or dependencies of other countries, such as Anguilla, Aruba, the British Virgin Islands, the Cayman Islands, Montserrat and the Turks and Caicos Islands.

Results: Fixed-line telephony market

Across the Caribbean, there is a wide disparity in fixed-line telephone subscription densities across the 22 countries examined. The highest subscriber densities were reported in Montserrat, at approximately 60 subscriptions per 100 inhabitants; followed by the Cayman Islands, with almost 56 subscriptions per 100 inhabitants, and Barbados, with nearly 53 subscriptions per 100 inhabitants (Figure 1).

Figure 1: Fixed-line telephone penetration in select Caribbean countries as at 2014 (Source: ITU, IMF, CIA World Factbook)

On the other hand, the lowest fixed-line telephony subscriber density was reported in Haiti, at approximately 4 subscriptions per 1000 inhabitants (not per 100); Belize, at about 7 subscriptions per 100 inhabitants; and Jamaica, at around 9 subscriptions per 100 inhabitants.

Results: Fixed broadband Internet market

In the 14 countries for which 2014 fixed broadband Internet subscription data was available, the Cayman Islands reported the highest subscription density, at nearly 40 subscriptions per 100 inhabitants, as shown in Figure 2. The next highest subscription densities were reported in Barbados, at around 27 subscriptions per 100 inhabitants; and Montserrat, at about 24 subscriptions per 100 inhabitants.

Figure 2: Fixed broadband subscription densities in select Caribbean countries as at 2014 (Source: ITU, IMF, CIA World Factbook)

On the flipside, and for the 14 countries examined, the lowest fixed broadband Internet subscription density was reported in Haiti, with considerably less than 0 subscriptions per 100 inhabitants. Haiti was followed by Jamaica and Guyana with approximately 5 and 6 subscriptions per 100 inhabitants, respectively.

Results: Mobile/cellular market

Figure 3 shows the mobile/cellular subscription density in 21 Caribbean countries. Of the 21 examined, 14 countries reported mobile/cellular subscriptions densities over 100 subscriptions per 100 inhabitants. The highest subscription levels were found in the Anguilla, at approximately 180 subscriptions per 100 inhabitants, which was followed by Suriname, at around 171 subscriptions per 100 inhabitants, and the British Virgin Islands at about 170 subscriptions per 100 inhabitants.

Figure 3: Mobile/cellular penetration in select Caribbean countries as at 2014 (Source: ITU, IMF, CIA World Factbook)

The lowest mobile/cellular subscriptions densities were recorded in Cuba, at approximately 22 subscriptions per 100 inhabitants. Belize has the second lowest of the group, at 50 subscriptions per 100 inhabitants, and was followed by Haiti, with approximately 64 subscriptions per 100 inhabitants

Results: Region-wide trends

Figure 4 shows subscription penetration rates for fixed-line, mobile/cellular and fixed broadband Internet services averaged across the Caribbean over the past seven years, 2008—2014. Similar to previous exercises, it is readily observed that the subscription density for mobile/cellular service outstrips considerably those for fixed-line telephony and fixed broadband Internet. As at 2014, subscriptions density for fixed-line voice and fixed Internet broadband were still approximately a quarter and one-eighth that of mobile/cellular service, respectively.

Figure 4: Averaged fixed-line, mobile/cellular and fixed broadband Internet subscription penetration rates across the Caribbean from 2008—2014 (Source: ITU)

Interestingly, and over the period under review, both the mobile/cellular and fixed-line voice services experienced a steady but slight decline in take up, whilst fixed broadband Internet is increasing – albeit at a relatively slow rate. As at the end of 2014, the averaged subscription densities across the region were approximately:

• 27 subscription lines per 100 inhabitants, for fixed-line, approximately, which is a slight decrease from that calculated in 2013
• 108 subscription per 100 inhabitants, for mobile/cellular, which is a 5 subscription per 100 inhabitants decrease from what obtained at the end of 2013
• 16 subscription lines per 100 inhabitants, for fixed Internet broadband, which is a 2 subscriptions per 100 inhabitants increase from our 2013 results.

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Though it might have always been the case, the recent announcement of Cable & Wireless Communications Plc’s intention to purchase Columbus International Inc. (which trade as LIME and Flow, respectively, in the Caribbean) has truly brought home that consumers tend to be an afterthought in the region’s telecoms space. Indeed, the proposed purchase might be the most prominent issue in the region’s ICT/tech space, but there are others, which although they might not have the far-reaching implications of the sale, nevertheless emphasise the eroding position of consumers.

Proposed acquisition of Flow by LIME

With regard to the proposed purchase, arguments are being made in various quarters that consumers will benefit from the merger of those two firms. However, so far, history does not support that position, where many countries across the Caribbean experienced an expensive and indifferent monopoly that only changed tact when competition was introduced and it started to lose market share. Moreover, in the services for which it did have a monopoly, for example fixed-line telephony, quality of service remained poor and there was little or no innovation in those segments.

Having said this, the blame cannot be placed solely at the feet of the telecoms firms: the regulators are also culpable. As discussed in a recent article by Bevil Wooding, the deal exposes gaps in the regulatory frameworks across the region. As a result, and noting the Regulators’ Forum organised by the Caribbean Telecommunications Union and scheduled for 10—11 December, countries are now scrambling to determine what recourse they might have with respect to the proposed acquisition.

Paper versus e-billing

In a similar vein, it is instructive to also examine LIME’s plan across the region to charge customers for paper bills, effective 1 January 2015. The charge, which appeared to have been unilaterally developed and announced over the past two weeks, was quickly rescinded in some countries, due to the resulting uproar.

The option to receive electronic versus paper bills would most likely to be welcomed in many quarters, as it would allow timely dispatch of bills, especially in countries or areas where the post might not be efficient. Further, and from an environmental perspective, less paper means less greenhouse emissions and a greener planet. However, LIME seemingly backing down on charging for paper bills might not necessarily be the end of this episode, as there would be a significant cost component for producing and dispatching bills across the countries LIME serves.

Consumer protection and quality of service for the times

Across the Caribbean, customer protection and quality of services in telecoms has generally received limited treatment. For the countries that do have laws or regulations on those subjects, they might be dated, or with respect to customer protection, were written generically to be applicable to all industries. Hence customers tend to find that they have little recourse, especially for quality of service, where although there is an expectation of having round-the-clock telecoms service, failures in service can take hours, or even days to rectify, without recourse.

To varying degrees, regulators across the region have not been eager to remedy the quality of service issues that consumers have been experiencing. Possible reasons for this posture could be that they hope that competition will address those deficiencies, they do not perceive them as urgent, and/or they do not have the wherewithal to secure expert advice they might need. However, it also means that consumers are likely to continue to get the short end of the stick.

Regaining our voice as consumers

Though it might appear that consumers are innocent bystanders in the telecoms/ICT space, without a doubt, they do have a powerful voice. Policy makers are especially sensitive to the views and opinions of the populace; but it is important to speak up when given an opportunity, such as in consultations, town hall meetings, and even in the media.

Further, ICT and telecoms have become sexy in the press, where lots of column inches and sound bites are being given regularly to the latest developments in those areas. Hence increasingly there is a considerable amount of information and opinions in the public domain through which to learn about a particular subject, along with the issues and contentions that might exist.

Image credit:  Stuart Miles (FreeDigitalPhotos.net)

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Since Sunday, 29 June, consumers across the Caribbean have been in an uproar over telecoms, especially mobile/cellular providers, blocking applications and services on their networks that use Voice over Internet Protocol (VoIP). Generally, the term VoIP speaks to technologies that are used to deliver voice communications and multimedia transmissions over Internet Protocol (IP) networks, which is used by the Internet, and includes offerings such as Skype, Google Talk, MagicJack and Viber.

One of the first telcos in the region to recently block VoIP was Digicel, which has blocked VoIP on its networks in Jamaica and Haiti. LIME, the other major mobile/telecoms provider in the region, has also followed suit in Jamaica (Source: The Gleaner). Some of the views the providers have expressed, which may be construed as justification for blocking the technology, include:

• use of VoIP is a form of bypass of its networks
• VoIP puts enormous pressure on its bandwidth
• they are seeking to protect the integrity of its network and protecting their customers’ ability to use the network in a way their customers are accustomed
• VoIP is having a negative impact on data usage overall
• other operators bringing international traffic to its network pay a termination fee, the entities that use VoIP are not paying anything to do it (Sources: Television Jamaica, The Gleaner).

Tech communities across the region, particularly entrepreneurs who are in the trenches, have been quite vocal that the banning of VoIP will stifle innovation. They have also noted that the blocking of certain Internet services is against the principle of net neutrality, an issue that is being widely debated in the United States, and which we at ICT Pulse have written articles about. Some regulators in the region, such as those in the OECS, have declared positions in favour of net neutrality and that providers should refrain from blocking content (Source: Eastern Caribbean Telecommunications Authority). In this article, we examine VoIP blocking by Caribbean telcos and share our own concerns about this latest development.

Going in reverse on the information superhighway

Historically, each telecoms service required its own distinct network (or technology) through which to deliver service, which in turn meant that consumers would need separate interfaces to access each service. For the Internet, even though it was delivered via the same copper lines used for plain old telephone service, customers needed to have a PC and a modem in order to secure a dial-up connection. However, as technology evolved, with regard to the Internet and the devices that can be connected to it, technological convergence has been realised, where a number of seemingly disparate services, such as voice, data and video, can all be carried on the same infrastructure and to a single device.

Thus, the effort by mobile/cellular operators across the region to upgrade their networks to support broadband connections to the Internet has not been in vain. Thanks to technological convergence, consumers can access the Internet via their mobile/cellular phones, through the existing mobile/cellular networks. As a result, the telcos benefit from the increase in the overall functionality, usefulness and value of their networks to consumers, which should also be reflected in their bottom line.

However, this convergence also means that the mobile/cellular providers are not the only ones who can broaden the ranges of services they offer (from traditional voice communications, to include data and video). Opportunities have also opened up for others entities, who may not necessarily be telcos, but who are innovative and are helping consumers to expand their horizons on what might be possible through today’s technology. Hence, is it fair for the telcos to cry foul that others are benefitting, when they themselves are also benefitting?

Is it just about getting paid on both sides?

With regard to the arguments about bypass of their networks that telcos have been presenting, they appear somewhat contradictory, especially since the VoIP communications are actually occurring on their networks. While it might not be solely on the infrastructure that is used for traditional voice calls, nonetheless, it is still their network.

Similarly, the whole issue of paying for the termination of calls is also a traditional voice network construct, which (so far) has not been applied to Internet communication. For traditional telephone services, such as fixed-line and mobile/cellular, the most widely used pricing arrangement is Calling Party Pays (CPP), where the caller pays for a call to a recipient. The rate payable, which tends to be based on usage, would include, among other things, the cost to originate the call on the caller’s network; to transit it across networks; and terminate that call on the recipient’s network. Though not as popular, other arrangements that have been implemented are Receiving Party Pays (RPP), the opposite of CPP, where the recipient is the one paying for calls received, and Bill and Keep (BAK), where effectively there are no interconnection payments between the telcos. Instead, they bill their own customers for the calls made and keep all of the revenue received.

With regard to the Internet, each customer pays his/her Internet Service Provider (ISP) for access to the Internet, which is similar to the BAK arrangement. Hence, depending on how the service is priced, which the ISPs do control, they should be able to make a reasonable return on their investment.

Having said this, it therefore seems somewhat odd that the Caribbean telecos are insisting that they want to receive payment from the remote party for a service transmitted over the Internet, when they are already being paid by the local user. Should they be successful in having international developers ‘pay for the privilege of accessing users on their networks – similar to what it obtains on traditional fixed-line and mobile/cellular networks – will the local recipients still be required to pay as well? Further, call termination arrangement tend to be reciprocal, so are the Caribbean telcos prepared to pay other ISPs for terminating VoIP calls that originate from their networks?

Shouldn’t it be about data anyway?

Based on the views the telcos have expressed, it appears that they would like to categorise calls made using VoIP technology to mobile/cellular devices, similar to those made through their traditional networks. However, for all intents and purposes, VoIP is an Internet service – it cannot work without the Internet. More importantly, the data transmitted and received by each party to a conversation using VoIP is logged against the data cap associated with his/her data plan.

It therefore means that VoIP use consumes data under a subscriber’s data cap, which he/she pays for. Interestingly, an informal survey of the applications and services that consume data on a mobile broadband plan seem to indicate that, typically, the big consumers of data are:

• video streamed to mobile/cellular devices
• uploaded and downloaded images
• social networks and their frequent push notifications
• email communication
• OS-related operations and other background services, and
• web browsers.

In all instances, services that use VoiP were well down the list, which suggests that the data they consume is not significant when compared with all of the other commonly used apps and services on an individual’s device. Moreover, does it truly matter exactly how a customer uses the volume of data allocated under his/her data plan, provided he/she settles his/her bill in full and in a timely fashion?

It is also interesting to note that from all reports, other than what Caribbean telcos have stated, voice by VoIP uses a relatively small amount of bandwidth – between 30 and 100 kbps (Source: Skype). However, the concerns expressed about the bandwidth that VoIP services consume may be more related to the poor quality of service, where in practice Caribbean Internet networks have slow speeds and still limited capacity (or bandwidth). Hence for customers who are paying for 3G, LTE, and even 4G service in the region, they might not be getting anything close to the data speeds specified for those standards, as discussed in EDGE, WiMAX, 3G, 4G: what’s the difference?

A bucket to empty the ocean

In summary, telcos battle against VoIP is not new – it is at least 10 years old. During that time, technology evolved making VoIP easier and even more accessible, and it is likely that newer and easier alternatives will continue to emerge. However, what has not been as evident is the willingness of the telcos to be more proactive in exploring newer business models, based on changes that have been occurring in the industry. Of particular note, the bandwidth needed for machine-to-machine communications (the Internet of Things) and the emerging Internet of Everything promise to pale in comparison to that used for VoIP.

Without a doubt the infrastructure that the telcos provide is critical. However, times have changed. The level of profits that telcos used to realise when they had more control over all of the (limited) services delivered over their networks is not what currently obtains. Though the infrastructure is essential, its actual value is facilitating the delivery of services, data and innovation, and not from the existence of the networks themselves.

image credit: Stuart Miles (FreeDigitalPhotos.net)

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This year, 2014, marks our fourth review of telecoms services take up across the Caribbean, in terms of subscriptions density. Table 1 lists the countries that were included in the exercise, which we have increased from 17 to 22, since our 2013 iteration.

Table 1: List of countries surveyed for 2014 update on state of telecoms in the Caribbean (Source: ICT Pulse)

The results presented were drawn from data published by the International Telecommunications Union (ITU). However, we stress that although the ITU has established clear definitions for all of the indicators it collects, the countries are charged with supplying the data to the organisation. Hence it is not clear the extent to which the ITU corroborates or validates the data it publishes, and neither have any explanations been given for anomalies that might be evident.

The per capita Gross Domestic Product (GDP), purchasing power parity (PPP), was drawn from a number of resources, including the World Bank and CIA World Factbook. The latter was especially useful for countries that are colonies (or dependencies) of other countries, such as Anguilla, Aruba, the British Virgin Islands, the Cayman Islands, Montserrat and the Turks and Caicos Islands.

Two things to note: (i) countries such as Curaçao and Sint Maarten have not been included because the ITU did not publish data for those countries; and (ii) the data sets for Haiti and the Turk and Caicos Islands were incomplete, hence they were not be included in all of the services discussed.

Results: Region-wide trends

Figure 1 shows subscription penetration rates for fixed-line, mobile/cellular and fixed broadband Internet services averaged across the Caribbean (22 countries) over the past seven years. It can be readily observed that the subscription levels for mobile/cellular service far outstrips that for the other two services featured. As at 2013, subscription densities for fixed-line voice and fixed Internet broadband were approximately a quarter and one-eighth that of mobile/cellular service, respectively.

Figure 1: Averaged fixed-line, mobile/cellular and fixed broadband Internet subscription penetration rates across the Caribbean from 2007—2013 (Source: ITU)

Interestingly, over the seven-year period under review, both the mobile/cellular and fixed-line voice services experienced a steady but slight decline in take up, whilst fixed broadband Internet has been increasing. As at the end of 2013, the averaged subscription densities across the region were:

• for fixed-line, approximately, 27 subscription lines per 100 inhabitants
• for mobile/cellular, approximately, 113 subscription per 100 inhabitants
• for fixed Internet broadband, approximately, 14 subscription lines per 100 inhabitants

Results: Fixed-line telephony market

Across the Caribbean, there is a wide disparity in fixed-line telephone subscriptions and subscription densities across the 22 countries examined. As shown in Figure 2, the highest subscriber densities were reported in the Cayman Islands, at approximately 65 subscriptions per 100 inhabitants; followed by Montserrat, with around 59 subscriptions per 100 inhabitants, and 52 subscriptions per 100 inhabitants in Barbados. On the other hand, the lowest fixed-line telephony subscriber density was reported in Haiti, at approximately 4 subscriptions per 1000 inhabitants (not per 100); Belize, at about 7 subscriptions per 100 inhabitants; and Jamaica, at around 9 subscriptions per 100 inhabitants.

Figure 2: Fixed-line telephone penetration in select Caribbean countries as at 2013 (Source: ITU, World Bank, CIA World Factbook)

Results: Fixed broadband Internet market

In the 20 countries examined across the region, and in the fixed broadband Internet market, the Cayman Islands has the highest subscription density, at approximately 35 subscriptions per 100 inhabitants, as shown in Figure 3. The next highest subscription densities were reported in Anguilla, at around 30 subscriptions per 100 inhabitants; and Saint Kitts and Nevis, at about 25 subscriptions per 100 inhabitants.

Figure 4: Fixed broadband subscription densities in select Caribbean countries as at 2013 (Source: ITU, World Bank, CIA World Factbook)

On the flipside, the lowest fixed broadband Internet subscription density was reported in Cuba, with 5 subscriptions per 10,000 inhabitants (not per 100 inhabitants!). Cuba was followed by Belize and then the Bahamas with approximately 3 and 4 subscriptions per 100 inhabitants, respectively. (It should be noted that no figures for this service segment had been recorded for Haiti and the Turks and Caicos Islands.)

Results: Mobile/cellular market

Figure 4 shows mobile/cellular subscription density in 21 Caribbean countries (Turks and Caicos Islands was not included, as no figures were published). Fourteen of the 16 countries had mobile/cellular subscriptions densities over 100 subscriptions per 100 inhabitants. The highest subscription levels were found in the British Virgin Islands, at approximately 188 subscriptions per 100 inhabitants. Following the British Virgin Islands were Anguilla, at 181 subscriptions per 100 inhabitants, and the Cayman Islands at about 168 subscriptions per 100 inhabitants.

Figure 3: Mobile/cellular penetration in select Caribbean countries as at 2013 (Source: ITU, World Bank, CIA World Factbook)

On the other hand, the lowest mobile/cellular subscriptions densities were recorded in Cuba, at approximately 18 subscriptions per 100 inhabitants. Belize has the second lowest of the group, with 53 subscriptions per 100 inhabitants, and was followed by Haiti and Guyana, both having approximately 69 subscriptions per 100 inhabitants

Some points to note…

The declining mobile-cellular subscriptions averaged across the Caribbean could be due to, among other things, persons relinquishing their second (or third) handset, especially in countries where mobile number portability exists. Alternatively, and perhaps more importantly, it could also be due to consumers not being able to adequately afford maintaining more than one handset, which in these still challenging economic times is a distinct possibility.

The trend evident in the fixed-line segment of Figure 1, i.e. the steady decrease in subscription levels, could be attributed consumers continuing to relying almost exclusively on their mobile/cellular phone to stay connected. In a number of instances, this position could again be due to limited finances to comfortably maintain two separate services, and a justification by consumers that they do not need to have a residential (or business) fixed line: their existing mobile/cellular phone service should suffice.

The continued growth in fixed broadband Internet in the region, as shown in Figure 1, does demonstrate the growing importance of that market to consumers. However, as reflected in our most recent Snapshot on fixed broadband affordability, retail rates might still be out of the reach of most consumers, which does not include the cost of the interface, such as PC or laptop.

In the service-specific graphs, Figures 2—4, there appears to be a relationship between per capita GDP and the service penetration levels reported. Generally, higher per capita GDP indicates higher personal incomes and consequently the scope for citizen to afford what might be perceived as ‘luxury’ items, which could include telecoms products and services.

However, the graphs also highlight countries that have considerably lower per capita GDP than those at the top of the list that have (surprisingly)  high service density levels. Under those circumstances, retail prices might be lower, which may make certain telecoms services more affordable for consumers, but terrain and the distribution and concentration of the population could also be important contributors to service take up.

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In his sectoral debate presentation on 11 June, Hon. Julian Robison, Minister of State in the Ministry of Science, Technology, Energy and Mining, advised the Jamaican Parliament that number portability was again delayed. The revised launch date is now May 2015, having stated during last year’s debate that it would be launched by March 2014, which was then shifted to May 2014, and then December 2014.

As expected, the Government has been roundly criticised for not being able to successfully implement number portability. Mobile penetration in Jamaica was estimated at 96.5 per 100 in habitants for 2012, and in the absence number portability, consumers might still have a phone for each operator in order to avoid the higher off-network calling rates.

Complex process or stonewalling by the telcos?

From all accounts, the Government intends to implement both fixed-line and mobile/cellular number portability, as there are two or more providers available in each market segment. Although it would appear that the arrangements for mobile/cellular number portability might be at a more advance stage than for fixed-line number portability, it has been reported that the telcos want both of them implemented at the same time:

…Robinson admitted that the ministry would still have a challenge meeting next May’s deadline, as one of the providers, LIME, has indicated that they would only be ready with mobile portability by that time, while the others — Digicel and FLOW — are insisting that they will not go ahead unless it is full mobility.

He also explained that LIME has indicated that, because of its legacy systems, it is more challenging for them to implement number portability…

(Source: Jamaica Observer)

As noted in our previous articles on the issues, such as our latest Snapshot update, number portability can be complicated to implement, and frequently, the process can be lengthy. However, for all intent and purposes, it has been an active issue for the Jamaican regulator, the Office of Utilities Regulation, for at least the past five years. In that period, telecos, such as LIME, could have been making the requisite adjustments to their systems that would now facilitate number porting, as opposed to waiting until what appears to be the 11th hour to do so, hereby delaying the process considerably.

Having said this, the delay also allows LIME to continue to re-position its fixed-line offerings to make them more competitive and comparable to the services offered by Flow and Digicel, hopefully to retain most of their existing customer base when porting becomes a reality. However, it also speaks to the fact of how neglected LIME Jamaica’s fixed-line network has been over the past several years, as invariably, its focus would have been on competing with Digicel in the mobile/cellular space.

Poor project planning, poor project management

Thanks to the manner in which this situation has unfolded, what has been especially disconcerting is the considerable delays experienced to date. With so many years to prepare, did all of the parties fully understand the number portability process, what it would entail, and their responsibilities therein? Did the telcos understand their own networks and what would be required to make them porting-ready? Were the dates announced politically motivated, with little or no bearing on the process or on advice provided?

Although we might never fully know for sure the factors that have contributed to the delays, what ought to be understood is that persons do rely on the information placed in the public domain, especially when done by those who should be in a position to provide authoritative insight into the matter. It therefore underscores the need for the parties involved in realising number portability in Jamaica to work assiduously to the revised timelines provided. They ought to appreciate that consumers are making decisions based on those commitments, and by now, they all ought to know what is required of them to successfully complete the process.

Image credit:  Andriyko_UA (Wikimedia Commons)

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Number portability (NP), the feature implemented by telecoms companies that allows subscribers to retain their numbers independent of the service providers they use, is considered one of the hallmarks of a maturing telecoms sector. In previous years, NP received considerable attention in the Caribbean, leading a number of countries embarking on the implementation process. In 2012, we prepared our first Snapshot on the subject. A year and a half later, we revisit the issue to determine how much progress, if any, has been made.

Which countries have implemented NP?

Since our review of NP in the Caribbean in August 2012, not much has changed as reflected in Table 1. The Bahamas is only country that has successfully launched NP, which occurred in December 2013. The ECTEL Member States (Dominica, Grenada, Saint Kitts & Nevis, Saint Lucia, Saint Vincent and the Grenadines), Jamaica, and Trinidad and Tobago, which in our previous Snapshot were reported to have commenced the process, are still not at a stage where portability can be announced.

Table1: Status of NP across select Caribbean countries as at February 2014 (Sources: regional newspapers, regulator websites, industry publications, government papers and reports)

Why is there such a fuss about implementing NP?

Although several Caribbean countries have embarked on NP initiatives, the fact that so few have successfully completed the process might suggest that somehow it might not be important to their telecoms sectors. However, the truth is that countries realise a number of benefits when NP is properly implemented, as few of which are outlined below.

First, NP supports customer welfare. Customers no longer lose their numbers – which essentially are personal identifiers – when porting from one provider to another. Additionally, in the majority of frameworks that have been implemented, the telcos typically bear (most of the) porting costs. Hence customers are not unduly burdened with that expense, which could be a deterrent to them switching providers, should they believe it necessary.

Second, from an industry perspective, NP tests and ultimately strengthens competition.  When customers are able to “vote with their feet”, should they not be satisfied with the services of one provider over another, the providers themselves get another means of measuring their performance and in the market. Thus, they have an opportunity to adjust their strategies to better respond to customer needs.

Thirdly, and a spin-off of competition, is an increased emphasis by telcos on innovation to keep customers happy. According an article published by University of California researchers:

…Mobile operators fear increased churn because they obtain higher lifetime revenue from customers who stick around for a long time, and this enables them to recover the cost of acquiring the customer. This will cause operators to compete harder to retain existing subscribers, both by lowering prices and by innovating and offering better services enabled by newer technology.  

(Source: The Analyst).

Although the article focussed on mobile NP, the point about customer retention is applicable to most telecoms services, and even to business generally, since relatively speaking, it is more expensive to attract and win over a new customer than it is to keep an existing one. However, prior to NP, telcos might not have fully developed their customer retention strategies, since subscribers were essentially “locked in” to a particular provider. In a post-NP environment, this is an area that would need to be developed.

The long hard grind…

Having tracked the status of NP in the Caribbean since 2012, it ought to be appreciated that implementing NP can be protracted and challenging process. Frequently, especially in jurisdictions where public financing might be limited, countries tend to require the telcos to bear the costs of modifying their networks to facilitate porting, along with the procuring whatever additional equipment they might need.

Additionally, the carriers must actively participate in the discussions to flesh out the NP framework, and agree on how it is to be implemented. However, not surprisingly, telcos with large market share are often reluctant to participate and do employ delay tactics. Hence it is usually in the industry working group phase that proposed implementation timelines get derailed, as may be happening in the ECTEL Member States, where the work of the Industry Working Group should have been close to completion, if not completed already.

In summary, only a handful of Caribbean countries have successfully launched NP. Almost half of the countries examined are in the process of implementing it, though considerable challenges exist, most critical of which might be securing the cooperation and support of all parties involved.

Image credit:  plenty.r (flickr)

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Continuing with our review of the 2013 edition of “Measuring the Information Society” published by the International Telecommunications Union, this post examines fixed broadband prices and affordability in the Caribbean.

In its latest release of Measuring the Information Society, the International Telecommunications Union (ITU) examined Internet broadband prices worldwide. In addition to allowing comparisons across countries, these prices also speak to the extent to which the average consumer might find fixed broadband services affordable, and consequently, their likely take-up in individual countries. In this post, and based on the data published by the ITU on Caribbean/CARICOM countries included in its review, we will be examining fixed broadband prices and affordability across the region.

The ITU’s approach

In order to examine the extent to which fixed-broadband service is affordable, the ITU used as its baseline a post-paid fixed-broadband plan, with a minimum download speed of 256 kbit/s and a monthly usage of at least 1 GB. For broadband plans for which the data cap was less than 1GB, the excess per MB rate to top up to the 1GB minimum was added to the monthly subscription price. These prices were then considered against the Gross National Income per capita (GNI p.c.) of the countries being assessed, which can be used as proxies for the average income of an individual in the respective countries. The results are expressed as percentages, and suggest the affordability of fixed-broadband services in the countries under review.

For this exercise, the ITU included 16 Caribbean/CARICOM countries as listed in Table 1.

Table 1: Caribbean/CARICOM countries included in the 2012 review of fixed-broadband prices and affordability (Source: ITU)

Results

Figure 1 shows the likely monthly subscription for a 1 GB plan as a percentage of GNI per capita in 15 of the 16 Caribbean countries. Cuba has been excluded from the graph because its result, 386.9% of GNI per capita – the worst performing country out of the 169 examined – would adversely skew the graph.

Figure 1: Pricing for a 1GB fixed broadband data plan with a minimum transmission speed of 256 kbit/s as a percentage of GNI per capita in select Caribbean countries (Source: ITU)

Nevertheless, the countries for which the baseline data plan would represent the smallest amount relative the GNI per capita were: Trinidad and Tobago at 1.0%, followed by the Bahamas at 1.6% and Saint Kitts and Nevis at 3.5%. On the flipside and in addition to Cuba, a 1GB fixed broadband was determined to be most expensive in Haiti, where it represented 81% GNI per capita, followed by Belize at 16.3% GNI per capita.

It is interesting to highlight that the countries reported to have the lowest and highest prices as a percentage of GNI per capita are not necessary the same countries when the prices themselves are compared, as shown in Figure 2. Again, Cuba is not shown, as its price is considerably higher an all of the other Caribbean countries and would distort the graph.

Figure 2: Pricing for a 1GB fixed broadband data plan with a minimum transmission speed of 256 kbit/s in select Caribbean countries (Source: ITU)

For a 1GB plan, the countries with the lowest fixed broadband prices were Trinidad and Tobago, at USD 12.30, the Bahamas, at USD 30.00, and Dominica, at USD 33.00. On the other hand, the highest fixed broadband prices were reported for Cuba, at USD 1,760.40 (not shown in Figure 2), followed by Antigua and Barbuda, at USD 54.90, and Belize at USD 50.00.

Some thoughts on the results

As you may recall, we here at ICT Pulse regularly examine and compare fixed broadband prices across the Caribbean as part of our Snapshot series. Our most recent review was published in May 2013 based on prices current as of the date of posting. This assessment by the ITU, in comparison, might be a bit dated, as the fixed-broadband prices were collected towards the end of 2012.As a result, the recent changes in broadband prices in Barbados, for example, may not necessarily be captured in the ITU’s exercise.

Having said this, the ITU’s review of fixed-broadband pricing is still useful and offers some insight into how well individual countries, and by extension the Caribbean, are performing on such a critical contributor to economic and social development. Moreover, the ITU is considered an important and authoritative resource and reference for telecoms and ICT-related data, and so can corroborate (or not) reports and findings from other sources.

Referring to the ITU’s findings, it is important to highlight that the although fixed broadband prices may vary widely across the region, the dollar figure, in and of itself might not be as important, as its likely impact on an individual’s monthly income, which suggest affordability. In countries such as Barbados and Antigua and Barbuda, where the fixed broadband prices seem high compared to other countries, their GNI per capita is considerably larger. Hence their prices as a percentage of GNI per capita is smaller percentage and so point to the fixed broadband being more affordable in those countries.

With the exception of Guyana, Belize, Haiti and Cuba, a 1GB fixed broadband data plan would likely consume less than 10% of an individual’s monthly income. In its report, the ITU highlighted favourably Trinidad and Tobago and the Bahamas, where their fixed broadband prices as a percentage of GNI per capita were less than 2%. It therefore means that the other countries in the region still have much work to do to get their prices down to that degree of affordability.

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Earlier this week the International Telecommunications Union (ITU) released the latest annual Measuring the Information Society (MIS report), in which it highlights key ICT developments worldwide and tracks the cost and affordability of ICT services. Now in its fifth publication, the MIS report is considered one of the most comprehensive assessments of ICT infrastructure and uptake, which forms the ICT Development Index (IDI) and in the latest edition was used to rank 157 countries.

Over the next few weeks, ICT Pulse will publish a short series of posts highlighting the performance of the Caribbean countries that has been included in this IDI assessment. However, to launch this new initiative, and to begin to provide some context for what is to come, presented below are select findings globally from the latest MIS report:

250 million additional people came online in 2012

Republic of Korea tops ICT ranking for 3rd year in a row

By end 2013 40% of the world will be online – but 1.1 billion households – or 4.4 billion people – remain unconnected

Mobile broadband is now more affordable than fixed broadband

Almost the whole world is now within reach of mobile cellular service

30% of the world’s young population are ‘digital natives’

Broadband is getting faster; 2Mbps now most popular basic package

Telco operator CAPEX peaked in 2008; despite economic upturn investment levels have not returned

By end 2013 there will be 6.8 billion total mobile-cellular subscriptions

An estimated 2.7 billion people will also be connected to the Internet

All countries in the IDI top 30 are high-income countries, underlining the strong link between income and ICT progress.

Between 2008-2012 fixed-broadband prices fell by 82 per cent overall

Of a total of 145 million young Internet users in the developed countries, 86.3 per cent are estimated to be digital natives, compared with less than half of the 503 million young Internet users in the developing worl

In 2012 there were around 363 million digital natives out of a world population of around 7 billion

Almost 80 per cent of households globally had a TV

An estimated 1.1 billion households worldwide are not yet connected to the Internet.

At the end of 2011, there were almost twice as many active mobile-broadband as fixed-broadband subscriptions.

 (Source:  ITU)

Image credits:  Master Isolated images (FreeDigitalPhotos.net);  ITU (infographic)

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