LACNIC Internet Community Newsletter
Caribbean Telecommunications Market Overview
by Bernadette Lewis
The Caribbean spans an area of approximately 2.5 million square kilometres, over island and continental nations, democracies and colonial dependencies. Caribbean countries range in size from 261 km2 to 110,000 km2. Their populations vary from under 50,000 to tens of Millions of inhabitants, and the GDP per capita from US$1600 in the poorer countries to US$60,000 in the wealthier nations. English, French, Spanish and Dutch are the official languages spoken in the region along with many different dialects.
Recognizing the need to guarantee the viability of our small economies, on January 1st, 2006, the heads of government of the Caribbean Community (CARICOM) launched the initial implementation of the Caribbean Single Market and Economy with the aim of furthering the regional integration process and facing the challenges and opportunities presented by globalization and a greater level of trade liberalization. One of the objectives of the single market - the liberalization of the service sector - required the elimination of obstacles to trade in services.
Liberalization of Telecommunications
The liberalization of the Caribbean telecommunications market began in Spanish-speaking countries. Puerto Rico liberalized its market in 1986, and was followed by the Dominican Republic in 1992. In 1997, many of the English-speaking Caribbean countries were signatories to the World Trade Organisation’s Basic Agreement on Trade in Telecommunications Services and adopted the guidelines of the Reference Paper for the liberalization of their telecommunications markets, by terminating the exclusivity agreements signed with incumbent operators.
Jamaica was the first English-speaking country to open its market.This process was conducted in different phases, beginning in 2000 with the liberalization of mobile telephone services. In March 2003 the entire telecommunications sector, including international services, was opened to competition. The Office of Utilities Regulation (OUR) was given the main responsibility of regulating the sector, and different aspects of the regulatory function that were not assigned to this office were assigned to the Fair Trading Commission, the Spectrum Management Authority and the Broadcasting Commission.
Five members of the Organisation of Eastern Caribbean countries followed the same course in 2002, adopting a model whereby a central regulatory body was established, the Eastern Caribbean Telecommunications Authority (ECTEL), for the five member countries, with satellite National Telecommunications Regulatory Commissions in each of the participating territories. This model required that the subscribing countries approve harmonised laws and regulations in order to establish new liberalized conditions open to competition within the field of telecommunications.
Barbados opened its market in 2003, placing the Government Ministry in charge of telecommunications and the Fair Trading Commission in charge of regulating different aspects of the sector.
Trinidad and Tobago opened its market in 2005, granting concessions to two new mobile telephone companies as well as the incumbent operator in fulfillment of the requirements of the 2001 Telecommunications Act. As opposed to Jamaica and the Eastern Caribbean countries, Trinidad and Tobago did not adopt a gradual process in phases, but has already granted seven concessions for international services and one to a cable company for the provision of landline services. DIGICEL, one of the new mobile telephone operators, began offering its services on April 1st, 2006.
Suriname’s Telecommunications Authority (TAS) was established in 1998 in order to prepare the legal framework for the liberalization of the telecommunications market. The TAS has prepared the conditions necessary for the introduction of competition within the market. The new telecommunications act was finally proclaimed in April, 2007 opening the way for competition.
In 2000, the government of Guyana began a project for modernizing the telecommunications sector. One of the project’s objectives was to liberalize the telecommunications sector and open it to competition, but this project has not had a significant impact on the market.
Results of the Liberalization Process
Although some common elements can be found, policies and functions within the regulations created in the Caribbean reflect the diversity of the region’s countries in terms of experience and circumstances. Whatever the regulation model selected by a country, experience shows that in all territories wireless mobile telephone services were the first sectors to implement telephone competition, and these wireless services have exhibited unprecedented growth. Network coverage has increased, the cost of access to telecommunications services has generally decreased, and consumers are now presented with more options.
The liberalization process has promoted investments within the region, a notable example of which is the appearance of DIGICEL, which has replaced Cable and Wireless as the region’s dominant service provider, operating in more than twenty territories. In general, Caribbean markets are small and therefore cannot sustain a multiplicity of competitors unless the sector is carefully managed. In such circumstances, market consolidation is a real possibility as evidenced by DIGICEL’s acquisition of units operated by Cingular in 2005.
Despite the liberalization process, competition in landline services is only now emerging and the introduction of broadband services continues at a slow pace. There still isn’t effective
The evolution of the Internet protocol is in fact dismantling many of the the traditional frameworks that governed the telecommunications sector. Caribbean administrators have yet to tackle the phenomenon of voice transmission over the Internet. How does one regulate, legislate, supervise or tax a new IP service that does not respect national borders, that leaves behind traditional networks, but that offers real advantages to the country’s citizens? The region must face this issue from a different perspective, one that accepts the technology while guaranteeing that both governments as well as operators and consumers will benefit.
Tasks of the Caribbean Telecommunications Union (CTU)
In 2006 the CTU commenced work on a project designed to reform spectrum management policies and to harmonize approaches to spectrum management in the Caribbean. Subsequent phases of the project will establish an automated sSpectrum management system for the Caribbean.
The CTU has also established a Caribbean Centre of Excellence (CCoE) to deliver training for Caribbean ICT practitioners. The CCoE will also provide technical assistance and information on every aspect of the Caribbean telecommunications market.
The CTU is committed to its vision of an integrated Caribbean enabled by information and communications technologies to facilitate the social and economic development of the region and its citizens.