Caribbean ICT and telecoms companies have submitted a proposal to Caribbean governments for financial and other forms assistance to offset the losses they have experienced during the COVID-19 pandemic. We break down some of the issues and offer some broad recommendations.<\/em><\/p>\n
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Within the past week, it came to light that telecoms companies operating in the Caribbean region have approached the Caribbean Community (CARICOM), requesting assistance from member countries. According to an article published in The Gleaner (Jamaica)<\/a>, the Caribbean Association of National Operators (CANTO), which represents 48 operators in 28 countries, submitted a proposal for the consideration of the Council for Trade and Economic Development (COTED), which had convened a meeting in mid-June.<\/p>\n
\u00a0(Source:\u00a0 The Gleaner<\/a>).<\/p>\n
COVID-19 has had an impact on everyone<\/h3>\n
Without a doubt, and over the past four months, COVID-19 has had a considerable impact on business and life globally. Consistent with the measures implemented worldwide, virtually all Caribbean governments implemented partial or full lockdowns of their respective countries. It thus meant that there were relatively large swathes of our populations that could no longer work (or earn a living), whilst for others, impromptu arrangements were made for them to work from home.<\/p>\n
Mobile\/cellular service is the most ubiquitous segment of the telecoms offerings available in the region, and up to around 90% of customers in some countries secure prepaid services \u2013 thus emphasising the cash-based nature of the business of telecoms in the Caribbean. It has been widely known that an important benefit of the prepaid arrangement, is that it inherently facilitates some semblance of budget control. If customers have the funds they will top-up their account to the amount they can afford; if they cannot, the will not; and they will only consume what they have already paid for. If funds were uncertain or limited during the lockdown period, it is likely that the corresponding spend on mobile\/cellular services (including mobile data) would also be limited.<\/p>\n
On the flipside, with children trying to access online education platforms, employees working from home, and people just generally relying more on the Internet for entertainment \u2013 such as via the video streaming services \u2013 the telecoms networks have become even more congested, resulting at times in even poorer quality service, and more complaints. In that vein, and to varying degrees, Caribbean governments, and many governments worldwide, have come to appreciate the deficiencies that exist in their countries\u2019 telecoms and ICT infrastructure, and are eager for it to be improved. However, to upgrade the infrastructure, in order to expand access and improve service quality, will take money, which essentially, Caribbean telecoms companies have said they do not have.<\/p>\n
Further, it ought be highlighted that although much of the focus in terms of organisations has been on those that could institute work from home arrangements, there were sectors crucial to the Caribbean economy that were essentially obliterated by COVID-19. The largest and most prominent being tourism, which can account for up to 80% of some countries\u2019 GDP (gross domestic product). In March, when most of the lockdowns and port closures occurred, the region was in the height of the 2019\/2020 tourist season. However, hotels, restaurants, attractions, etc., all had to close, resulting in loss of revenue for not only for those business, but also to the telecoms companies as well.<\/p>\n
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The requested areas of assistance<\/h3>\n
CANTO\u2019s proposal to CARICOM outlines a litany of areas in which the aforementioned assistance can be provided to the telecoms companies, including:<\/p>\n
1. Partial or complete forgiveness or moratorium on all regulatory fees for 2020.<\/p>\n
2. Temporary provision of additional spectrum at no cost for an agreed period, to support increased data usage. Such spectrum to be provided by way of an abbreviated approval process\u2026<\/p>\n
4. Access to the Universal Service Funds to support the socially displaced in obtaining telecommunications packages.<\/p>\n
5. Relaxing or removing any net neutrality restrictions to allow operators to manage congestion and safeguard the security and integrity of their network. This is also crucial for permitting operators to zero-rate government and educational websites, among others.<\/p>\n
6. Taking Government and regulatory interventions to require streaming platforms, such as Netflix and other similar streaming services, to move from High Definition (HD) to Standard Definition (SD), so that more capacity is available on the network for emergency services, persons working from home and homeschooling\u2026<\/p>\n
10. Set-offs of government debt on taxes owed by operators.<\/p><\/blockquote>\n
(Source:\u00a0 <\/span>The Gleaner<\/a>)<\/span><\/p>\n
Parting thoughts<\/h3>\n
As much as the telecoms companies have been struggling thanks to COVID-19, virtually all governments worldwide have also suffered. Economies have contracted, and governments are projecting losses, typically in the range of tens of millions to even billions of dollars. Further, many Caribbean governments would have been looking to the taxes they receive the telecoms companies to help offset some of their losses, especially for countries that had instituted special taxes or levies on telecoms services. However, as was noted previously, very few of us have come out unscathed financially from COVID-19, and more importantly, the challenges continue.<\/p>\n
So, should Caribbean governments bail out the telecoms companies? To some degree, they might not have a choice. As was noted in an earlier article, 3 reasons why Gov\u2019t investing in ICT may be the only way to improve the service quality<\/a><\/em>, for years, Caribbean governments have taken an arms-length posture with respect to telecoms and ICT, although it is widely held as a key economic driver for our countries. However, government intervention might be the only way Caribbean countries will get the improvements in access and service quality they would like, which also has a knock-on effect on the economy.<\/p>\n
Image credit:\u00a0 skeeze (Pixabay<\/a>)\u00a0<\/em><\/p>\n