Overview of the Caribbean Telecommunications Market

Caribbean Diversity

The Caribbean covers an area of approximately 2 million km2, with island and continental states, democracies and colonial dependencies; countries ranging in size from 261 km2 to 110, 000 km2. Populations range from less than 50,000 to tens of millions and GDP per Capita from US$1,600 in the poorest nations to US$16,000 in wealthier nations. English, French, Spanish and Dutch are the official languages spoken in the region but several different dialects are also used.

Regional Integration

Recognising the need to ensure viability of our small economies, on 1st January, 2006, the Heads of Government of the Caribbean Community (CARICOM) launched the Single Market aspect of the Caribbean Single Market and Economy, in a move to deepen the regional integration process and address the challenges and opportunities presented by globalisation and the increased intensity of trade liberalisation. One of the goals of the single market - liberalisation of the services sector would necessitate the removal of barriers to trade in services.

Liberalisation in Telecommunications

Liberalisation of the Caribbean telecommunications market began with the Hispanic countries. Puerto Rico liberalised in 1986 followed by the Dominican Republic in 1992. In 1997 many of the English speaking Caribbean countries entered into commitments under the World Trade Organisation (WTO) agreement and adopted the Reference Paper guidelines to liberalise their telecommunication markets by dismantling the exclusive agreements which had been entered into with the various incumbent operators.

Jamaica became the first English speaking Caribbean country to open its market. The process was phased, beginning in 2000 with the liberalisation of cellular services. By March 2003 the entire telecommunications sector, including international services, was opened to competition. The Office of Utilities Regulation (OUR), was given the main responsibility for regulation of the sector, while the Fair Trading Commission, the Spectrum Management Authority and Broadcasting Commission had responsibility for different aspects of the regulatory function not handled by the OUR.

Eastern Caribbean States followed in 2002, adopting a unique model which established a central regulatory agency, the Eastern Caribbean Telecommunications Authority (ECTEL), for the five constituent nations, with satellite National Telecommunications Regulatory Commissions in each of the participating territories. This model required the contracting States to enact harmonized telecommunications laws and regulations to enable the new liberalised and competitive telecommunications environment.

Barbados opened its market in 2003 with the Government Ministry responsible for Telecommunications and the Fair Trading Commission regulating different aspects of the sector.

In 2005 Trinidad and Tobago opened its market with the award of concessions to two new cellular operators and the reissue of concessions to the incumbent to conform to the requirements of the Telecommunications Act 2001. Unlike Jamaica and the Eastern Caribbean states, Trinidad and Tobago did not adopt a phased approach and has already issued seven concessions for international services and one to cable operators for wired services. DIGICEL, one of the new cellular operators, commenced service on April 1, 2006.

The Telecommunications Authority of Suriname (TAS) was established in 1998 to prepare the regulatory framework for the liberalisation of the telecommunications market. TAS has prepared all necessary conditions to smoothly introduce the competition in the market. However, the proclamation of the new telecommunications Act is awaited.

The Government Guyana embarked on a project to modernise the Telecommunications Sector in 2000. One of the goals of the project was to liberalise the telecommunication sector and introduce competition but the outcome of the project has not had a significant impact on the market.

Outcomes of the Liberalisation Process

While some commonalities may exist, the development of regulatory policies and functions across the Caribbean reflects the diversities in the experiences and circumstances in the nations of the region. Whatever the regulatory model followed, the experience has been that in all the territories, wireless mobile telephone services were the first areas of telephony competition and the growth in wireless services has been unprecedented. Network coverage has increased; there is more affordable access to telecommunications services and greater consumer choice.

The liberalization process has precipitated significant investment in the region, most notable is the emergence of DIGICEL, which has supplanted Cable and Wireless as the dominant service provider in the region, operating in fifteen countries. The Caribbean markets are typically small and can not sustain multiple competitors unless there is careful management of the sector, there will be consolidation in the sector, as evidenced by the purchase of Cingular operating units by DIGICEL in 2005.

In spite of liberalsation, competition in fixed line service has not materialized and the broadband service deployment has continued to be slow. Real competition in international service provision is yet to be achieved because in most markets the former incumbent operator has control over the international facilities. Jamaica, Barbados and some of the Eastern Caribbean countries have granted t licences to marine fiber companies to provide international services.

Technological Challenges

The evolution of Internet Protocol has effectively dismantled the traditional frameworks which governed the telecommunications sector. Caribbean administrators are yet to come to terms with the Voice over IP phenomenon. How do you regulate, legislate, monitor or tax an IP enabled new service that does not respect national boundaries that bypasses the legacy networks but from which your citizens derive real benefits? The region needs to approach this conundrum from a different perspective – one that embraces the technology but puts the necessary legal and regulatory systems in place to ensure that the governments, operators and consumers are able to benefit.

The Work of the Caribbean Telecommunications Union (CTU)

In 2006 the CTU would be working on a Spectrum Management Policy Reform project which is designed to harmonise the approaches to Spectrum Management in the Caribbean. In addition the CTU will also be establishing a Caribbean Centre of Excellence (CCoE) to support telecommunications stakeholders in the areas of training, technical assistance and the provision of information on all aspects of the telecommunications market.

The CTU remains committed to the vision of a seamless Caribbean, supported by information and communications technologies which are leveraged by the region’s citizens for social and economic development.

Bernadette Lewis
Secretary General
Caribbean Telecommunications Union