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Caribbean Telecommunications Report Q4 2011
Business Monitor International, Oct 2011, Pages: 91
The Caribbean Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Caribbean's telecommunications industry.
The BMI Caribbean Telecommunications Report covers the nations of Barbados, the Bahamas, the Dominican Republic, Puerto Rico, Haiti, Jamaica, Guadeloupe, Martinique, Trinidad & Tobago and Cuba. The majority of these markets have reached maturity, and continue to report slow growth and little change in the market.
However, this quarter has seen speedy growth in mobile services in countries such as the Bahamas and Jamaica, causing some upwards revisions in the forecasts. The acquisition of a 51% stake in the Bahamas Telecoms Company (BTC) by Cable & Wireless will add some much-needed input into the company. Further, the launch of fixed-line services by Cable Bahamas will add competition to this area of the telecoms market.
Haiti and Cuba remain the markets with the most potential in the region, as they are also the most underdeveloped. With the lowest penetration rates in mobile, fixed-line and broadband markets, there is huge potential for services to take off. However, both countries face significant barriers in terms of purchasing power of citizens. As the poorest countries in the region, the telecoms services currently on offer are out of the reach of most people.
Further barriers to development in Cuba are tough sanctions, regulations and a lack of competition. Despite foreign companies showing interest in entering the market, this has yet to happen. Furthermore, Telecom Italia sold its stake in ETECSA in Q410, returning the company wholly in state hands. This move was motivated by Telecom Italia’s desire to focus on high growth markets – Brazil and Argentina – indicating the company does not believe the Cuban market will take off in the medium term.
Puerto Rico is the most dynamic market in the Caribbean, and maintains its place at the top of our Q411 Business Environment Ratings. Puerto Rico is blessed with a relatively large population and strong growth potential, coupled with strong competition in the market. The Bahamas made significant gains this quarter to overtake both Martinique and the Dominican Republic, on the back of an improved Country Rewards score, following the acquisition of BTC by Cable & Wireless. Cuba and Haiti remain at the bottom, hindered by a combination of difficult economic and political circumstances.
There is an increasing focus on content over mobile networks, which is expected to drive revenues as subscriber growth stalls. The lack of growth potential has even seen operators exit the market and mergers take place, most notably América Móvil's decision to sell its Jamaican operations to Digicel, which dominates the market there, after only three years in the market. Lack of growth potential may be the reason behind this with investment needed in next generation networks to get revenues moving again.
In Haiti, there are signs that improvement may be around the corner, as Viettel’s investment in state entity Natcom (formerly Teleco) begins to bear fruit. In August, 1,000 base stations and 3,000km of fibre-optic network were put into operation. BMI expects to see growth in the telecoms market as a result. For the remaining markets in the region, the focus must be on getting subscribers to spend more on their phones. Mobile content will continue to be a hot topic, and BMI expects to see operators upgrade their networks to cater for growing demand. 3G services will help if they are backed by this mobile content that will encourage greater usage. New devices, particularly smartphones, will be important in pushing usage rates upwards.
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