The Caribbean has had some semblance of publicly available Internet service for about two decades, but in recent times it has become a key platform for the delivery of a broad range of telecoms and computing services and applications. Critical considerations when assessing the Internet’s effectiveness as a medium of connectivity are transmission speeds and the prices charged for its use. This snapshot examines those two factors across the English-speaking Caribbean, since they speak to the region’s ability to harness the potential of the Internet and to create knowledge-based societies.

Methodology

Data for this review was collected from the websites of widely used Internet Service Providers (ISPs) in the region. At least two ISPs were examined in each country where present (Table 1), and the exercise was limited to non-dialup Internet services and to service plans for domestic/residential customers. The offerings from the ISPs varied drastically in terms of transmission speeds, hence the exercise was limited to identifying (per country):

Table 1: List of ISPs included in exercise

• the lowest download speed available and the corresponding monthly rate
• the highest download speed available and the corresponding monthly rate
• the monthly rate for a 2 Mbps (Megabits per second) service plan.

It is emphasised that the review focused on the monthly rates payable for specified Internet plans only. The exercise excluded initial subscription and activation fees, as well as any additional monthly service charges that might be payable, but included sales taxes (GST, VAT, GCT, etc) when applicable. The rates were converted from the local currency to United States Dollars (USD) using current commercial exchange rates.

Under International Telecommunications Union (ITU) standards, between 1.5 and 2 Mbps is considered the threshold speed for classifying an Internet service as broadband. Hence 2 Mbps has been used as a baseline reference to compare rates across the countries under review.

Results

As reflected in the Table 2 below, the minimum download speeds offered in most countries is 1 Mbps, with the exception of Belize, Dominica and Trinidad & Tobago, where speeds of 256 kbps and lower are still available. Interestingly, the price for the service plan with the lowest download speed in Guyana (1 Mbps) is over eight times that of the most expensive plan in the rest of the sample group (Belize, USD 436.05 for a 4 Mbps package).

Table 2: Monthly pricing in US Dollars for select Internet plans based on download speed (Source: ISP websites)

On the other hand, just under half of the sample group offered plans with 8 Mbps as the highest download speed. In Jamaica and Trinidad, plans with download speeds of 100 Mbps are available at prices lower than what has been specified in other countries for less than a tenth of that speed. Attention is again drawn to the exorbitant monthly fee charged in Guyana for a 4.5 Mbps connection. This price would be well beyond the reach of most domestic customers and businesses.

In all countries except Guyana and Belize, the monthly rate for a 2 Mbps Internet plan is under USD 85.00, and is even under USD 30.00 in Grenada. Again, excluding Belize and Guyana, the average monthly rate for a 2 Mbps Internet plan is approximately USD 55.30, and when weighted by population, the average monthly rate drops to around USD 38.00.

However, when compared with the monthly rates payable in developing countries, the region does not fare as favourably. The Organisation of Economic Co-operation and Development (OECD) has published the average monthly subscription prices for broadband connections with advertised download speeds below 2.5 Mbps as at September 2010, for some of its member countries. Excluding line charges, the median prices are shown in Figure 1.

Figure 1: Price for Internet plans with under 2.5 Mbps download speed in select OECD countries (Source: OECD)

Note is made that the OECD stipulated a basket of Internet plans with under 2.5 Mbps download speed, hence a broad range of plans that meet that criterion would have been accepted. However, since the term “broadband” was specified, it is unlikely that the advertised download speeds in the selected countries would be significantly lower than 2.5 Mbps.

Notwithstanding, when the average monthly rate for 2 Mbps Internet service in the Caribbean is compared with that for the OECD group, the former is considerably higher. However, the average monthly rate weighted by population is marginally better, as it is lower than the monthly rates payable in Australia and Norway, and on par with median rates in Spain

In summary, pricing for Internet service varies drastically across the region. However, more sobering is the fact that despite the strides made through liberalisation and competition, Caribbean Internet rates still might not be comparable with those charged in developed countries. As a result, we might still not be well positioned to fully harness the potential of the Internet, to create knowledge-based societies, and even to increase our international competitiveness.

SOURCE

Study: Belize Internet Among Slowest, Most Expensive In Region

The survey has been picking up a lot of traction and angry comments on FACEBOOK, and we today asked a top BTL executive why Belize is at the highest price point, for the lowest speed:

Jules Vasquez
"Belize's prices are among the highest, and the bandwidth is among the lowest; why is this?"

Dr. Dionne Miranda - Customer Services Manager, BTL
"To be honest with you, Jules, the demand for higher speeds has been really great. I want you to understand that Belize has different demands based on the fact that some of those countries are highly industrial and service-oriented countries. They have multi-national cooperations, and therefore their needs are different from the Belizean public's needs. So, we're not going to respond if our public isn't asking for larger bandwidth, if that is not our particular bandwidth. We are a very service-oriented, tourism-oriented country, in fact, that is one of the things that is very necessary for us to understand that demand drives up supply, and then, it provides cost elasticity, where we actually lower costs. Just to give you the example of Jamaica, for instance, a 1-megabit in Jamaica is $27 US dollars. They are 2/3 the size of Belize, yet they have 10 times the population. Now, when you look at us, we're offering that service for 3 times the cost to a third larger the size, and only 1/10 of that population. So, it is very difficult for us to say that we can have prices that are equal to that of a thriving economy with a large population. Now, let's look at Barbados. Barbados is 4 to 5 miles wide, and when they set up infrastructure to offer service, they have 32 to 40 people in one apartment building that can covered. For me to give service to 32 people for internet, it's the whole of Port Loyola, for instance, that would need to be covered up to make me get 32 customers. At the end of the day, again, demand drives up my ability to supply, based one what people want."

Jules Vasquez
"How would you respond to the criticizm that the reason the demand isn't there is because the supply is so prohibitively priced? You all have made internet so expensive that people with very limited disposable income can't afford it."

Dr. Dionne Miranda
"Can I say that this is an interesting statistic to bring up? But, you can't use DSL or broadband, on which you have devices, and the device penetration is very low, according."

Jules Vasquez
"A device, you mean a computer?"

Dr. Dionne Miranda
"A computer, IPad, or something else - I can't provide service to the people who have the vehicle to drive on my highway. So, if you were able to extrapolate and give me the data that says that the devices are available, then I can see where the demand is. But even right now, we are provide netbooks at a very subsidized cost, we are 128k internet so that lower cost provision is available, and still the take-up isn't being seen there because it is a cost prohibition."

Jules Vasquez
"If you cost the thing cheaper, people will start investing in computers, and that will grow the use of internet. Is BTL opposed to this model?"

Dr. Dionne Miranda
"No, but that is a textbook model, Jules, and I'd like to add further credibility to it. When we offered 128k, we were surprised to find that people downgraded from 256k and 512k. So rather than -".

Jules Vasquez
"But that is a price deterent."

Dr. Dionne Miranda
"Exactly, so rather than gaining new customers, people actually thought that, no, they don't need the internet at that level. There are a few -"

Jules Vasquez
"People thought that they couldn't afford it at that level."

Dr. Dionne Miranda
"But I am telling you that we are revising rates, so we are doing that, and that is very important, but at the end of the day, this is a company that has to remain profitable as well. We can't sell for less than we are making."

Jules Vasquez
"Would you say that the internet in Belize is prohibitively priced?"

Dr. Dionne Miranda
"I don't believe that it is prohibitively priced. I do agree with you that I would love to see it get lower, and I do agree with you that we are working on that at BTL at this moment because we do see the need to open up and allow the growth of the economy. But, at the end of the day, it takes a clear study, and we're not going to be reactive, but we're actually going to look at what our public is looking for, and by having you here, we're going to delve further and find out what we can do, but I can tell you that the plans are on the way. There will be rolliing out very soon."

Miranda pointed out that those who have the package known as a home bundle actually gets 512k for 51 US dollars.

Channel 7

BTL customers petitioning for more bandwidth for less money