High-speed Internet services always have been a factor in the Nearshore services proposition. But in the last two months, the Coronavirus pandemic has dramatically re-ordered typical operational priorities. Quality broadband connections are suddenly hugely influential to outsourcing customers, providers, telecom operators, and host countries. What are the real speeds for work-at-home professionals? What is the quality of service? How quick are ISPs in responding to network issues?
Making blanket statements about high-speed Internet service in a region as diverse as the Caribbean is a fool’s errand. Varying levels of government oversight, wide disparities in long-term network investment, topological differences, and the level of competition among telecom operators are all crucial factors in shaping the real experience of users in each of the countries in the region.
We sought out one of the foremost experts on the state of Caribbean telecoms to answer some of these crucial questions. Michelle Marius is Director at ICT Pulse Consulting Limited, a Jamaica-based research and advisory firm that specializes in a broad range of ICT and telecommunications issues. She edits and publishes ICT Pulse, a well-respected online publication that examines topical telecommunications and ICT issues from a Caribbean perspective. Below is our Q/A with Michelle:
Nearshore Americas (NSA): The COVID crisis is causing the entire business world to look a lot more closely at the adequacy of connectivity and high-speed Internet reaching residential areas – especially in developing economies. Overall how has the fixed-line network, in local Caribbean communities, fared so far in the crisis?
Michele Marius (MM): There will likely be mixed responses: those who are complaining bitterly about the deterioration in the quality of the service; and those who are likely to be of the view that ‘it could have been worse.’
Typically, the types of plans and services offered for corporate use are different from those provided to residential customers. What has been happening over the past several weeks with more people working from home and children not being at school is that the residential networks must now carry both the work-related traffic and what would normally be generated at home. However, we are also streaming considerably more – be it from platforms, such as Netflix and YouTube, and from participating in more online meetings and webinars – which are also adding to the traffic burden on residential networks.
NSA: What are the most significant shortcomings around connectivity ICT services (both mobile and fixed-line) in the Caribbean, in general?
MM: To a considerable degree, the biggest shortcomings with regard to mobile and fixed-line ICT services are what they have always been: speed and coverage.
Concerning speed, first, there can be a wide disparity between what the maximum speed specified for a fixed broadband Internet plan is, and what customers in fact experience on a regular basis. Second, upload speeds in the region tend to be quite low – usually a small fraction of the maximum download speed specified – which means that the quality experienced by Caribbean content creators, like me, and the quality of online meetings and webinars in the region, can be poor and not consistent.
With regard to coverage, this tends to apply to both fixed-line and mobile Internet services. For fixed-line broadband, the quality of the service and the download speeds available tends to be considerably lower in rural areas than what is experienced in major towns and cities.
For mobile, most countries enjoy close to 100% population coverage, but not necessarily 100% geographic coverage. Hence, the major population centers and most rural communities might be covered, but lots of gaps tend to exist. Additionally, we tend to have several mobile technologies overlaying each other in a patchwork of coverage. So the technology that your smartphone picks up, for example, 3G, 4G, HSPA, LTE, changes quite frequently, especially if you are moving, which in turn affects the transmission speeds you are likely to experience at any given point in time.
NSA: The level of connectivity and broadband penetration in the Caribbean varies widely when comparing urban areas with far-off, rural areas. When one country, for example, is deemed to have a 50% broadband penetration rate, is that not a bit misleading if the penetration is particularly thin in the rural areas while dense in urban areas?
MM: In most instances, it can be misleading. Most Caribbean countries are mountainous, with most of the population located closer to the coast, but with many communities in those mountainous and rural areas that are difficult and expensive to connect. However, there are countries, such as Barbados, the Cayman Islands, and the Turks and Caicos Islands, for example, that are relatively flat; so the difference in the cost of deploying a broadband network in rural, versus urban areas, might not be a significant, as in other countries.
On the other hand, 50% connectivity is an average. It tells you nothing about the evenness of that connectivity. However, it is still useful, because it conveys a general picture – 1 in 2 individuals/subscribers/households in a particular country have broadband service. To understand the coverage, other questions ought to be asked.
NSA: Concerning mobile broadband services, a sizable number of outsourcing service providers are relying on mobile “hot spots” to enable their home-based workers to perform their duties with adequate bandwidth, given that the fixed-line option is inadequate. In your view, is this a sustainable strategy?
MM: Hmm, this indeed an unfortunate situation, but under the circumstances, where employees might not be able to afford fixed-line broadband Internet access at home, the use of mobile hotspots might be the only alternative through which outsourcing service providers can continue to function under the work-from-home constraints that have been instituted. Having said this, I am not confident it can be a sustainable strategy for two key reasons.
First, with more mobile traffic now in residential locations, again due to more people being at home, the quality of the service is not likely to be consistent. So dropped calls, poor sound quality, etc., may become more frequent. Additionally, call quality can deteriorate whenever there are adverse weather conditions, such as heavy rains and thunderstorms, so again, it’s something to think about.
Second, and perhaps more importantly, mobile broadband is still pricey across the Caribbean. Admittedly, year on year the regional carriers have been improving the mobile data plans that they offer in terms of price and the size of the data cap. As a result, the per Gigabyte or Megabyte cost can be low, but the overall price for a particular plan may still end up being substantial, which of course would need to be multiplied by the number of employees who need mobile broadband access. Hence, in the long run, it is unlikely that mobile broadband will be as cost-effective as fixed-line broadband.
NSA: What countries in the Caribbean remain a ‘monopoly’ environment for telecommunications?
MM: Currently, very few countries still have monopoly telecommunications environments. Most have fully liberalized their sectors but may not have multiple players in all of the key segments. Also, several mergers and acquisitions have occurred over the past two decades, which at various points, effectively resulted in some sectors, such as fixed-line telephone and Internet, having monopoly players. However, with the convergence of services and technologies that have occurred, many of the larger operators have become multi-play carriers, thus providing consumers with options.
However, only Guyana readily comes to mind as still having a monopoly telecommunication environment. A 15-year exclusive license was signed in 2014 with the incumbent player, the Guyana Telephone and Telegraph Company (GTT), but some liberalization of the mobile segment has occurred, with limited competition. The current Government is trying to negotiate with GTT to end its monopoly sooner rather than later. However, so far, and from what I understand, tangible progress is not readily evident.
NSA: What countries are among the most costly for telecommunications services, and which are the least expensive?
MM: Looking solely at the price in the Caribbean is misleading, as spending power varies across the region. For example, and just in dollar figures, countries such as the British Virgin Islands, the Cayman Islands, and the Turks and Caicos Islands, tend to be at the top of the list as the most expensive, but incomes in those countries are also considerably higher than in the rest of the region. Similarly, countries such as Sint Maarten, the Dominican Republic, and Suriname, tend to have the lowest average price per month for a fixed-line broadband package.
However, when examining affordability – the portion of the average monthly income consumed by a particular plan – a different picture emerges. With regard to fixed-line broadband Internet, countries such as Barbados, Aruba, and even Trinidad and Tobago start to shine, while countries such as Suriname, Guyana, and Belize, do not appear to give consumers as much bang for their buck.
I believe there are several reasons for the wide variations in the rates and correspondingly the affordability of telecommunications services across the Caribbean region. First and foremost, Caribbean countries are not a single, homogenous unit. They are governed and operated individually, and each manages its own economy. Hence, even across the OECS (Organisation of Eastern Caribbean States) sub-region, where there has been an effort to create a harmonized telecommunications space, the rates are not identical. Moreover, even though a common currency is used across those countries, the Eastern Caribbean Dollar, the purchasing power still varies across the countries, which no doubt, is reflected in the rates set for the telecommunications services offered.
NSA: As a result of the crisis, to what degree have policymakers and/or telecommunications operators taken note of the relationship between a high-quality telecommunication infrastructure – especially in the last mile – and the economic opportunities that such an environment creates, especially among knowledge-services exporters?
MM: I think all parties have noted it. There were several compelling studies conducted over a decade ago that spoke of the relationship between increased broadband penetration among households and the impact on per capita GDP. However, in the Caribbean region, my observation has been that following liberalization of their telecommunications sectors and the introduction of regulation, most governments have taken an arms-length approach to shaping telecommunications and ICT in their jurisdictions. Policy and legislation have not kept up with the times, and effectively, there appears to be a reliance on the carriers to shape the policy, based on the fact that policymakers are not providing clear direction on key issues.
Suffice it to say, most of the carriers in the region are private concerns, who are answerable to their shareholders, and whose focus is on profits. Their focus is not on the economic and social development of the countries – and rightly so! That is what we expect of our policymakers, and of course, to ensure that the enabling environment is created to facilitate the development and growth we envisage.
* Michele Marius is an experienced Consultant, Manager, Regulator, and Engineer, with 20 years’ experience in the ICT and telecommunications space. She has worked in both the private and public sectors in developed and developing countries in the Caribbean, Southeast Asia, and the South Pacific, and she shared with Nearshore Americas her insights on connectivity in the Caribbean.