CANTO Caribbean Roundup – Year In Review – 2013
The information presented and opinions expressed herein are those of the author and do not necessarily represent the views of CANTO and/or its members
In 2013, operators concentrated on network upgrades to LTE as well as expanding their portfolios of corporate ICT services. In the area of regulation concrete advances were made with the establishment of a regional IXP on the island of Dominica while Digicel agreed to eliminate roaming charges for its customers within the Caribbean Community. Attempts to auction spectrum in Jamaica weren’t so successful.
Cuba made an important leap in connectivity with the activation of a new undersea cable and restrictions on internet access were lifted. However whether the services are affordable is another thing.
ICT development meetings were held region wide with the Caribbean Telecommunications Union (CTU) reaching several important cooperation agreements with multilateral organizations. And academics, ministers and other stakeholders met in Panama and committed to try to close the digital divide by 2020.
LTE really started to take root in 2013 as greater adoption of smartphones and impatient users that want instant access to data added pressure to operators to upgrade their networks.
According to the latest report of the Global Suppliers Association (GSA), there are 13 commercial 4G LTE deployments in the Caribbean: five in Puerto Rico (Claro, T-Mobile, Sprint, AT&T and Open Mobile), two in the Dominican Republic (Orange, Tricom), two in the Cayman Islands (LIME and Digicel) one in Antigua & Barbuda (Digicel), one in Aruba (Setar NV), and two in the US Virgin Islands (Sprint and AT&T).
Most recently, at the end of November, Digicel and Cable & Wireless Communications (CWC) launched LTE services in the Cayman Islands.
CWC launched in the 700MHz band while Digicel, launched initially in the 1,800MHz band but also has spectrum in 700MHz. Digicel claims 99% population coverage.
Many other operators throughout the region have expressed plans to deploy LTE in the near future.
CWC has confirmed plans to launch LTE services in 700MHz through its unit Bahamas Telecommunications Company (BTC) in December.
Puerto Rico is the most advanced LTE market in the Caribbean with five players, some operating since 2011. Aeronet Wireless Broadband says it is deploying an LTE TDD network in 2.6GHz.
In February 2013, Digicel and Islandcom received LTE licenses in 700MHz in Turks and Caicos and Digicel has plans to cover 75% of the population in 18 months and 98% of the population within 30 months.
In Belize, BTL DigiCell is deploying an LTE upgrade and in Bermuda North Rock Communications has requested a license.
In the Dominican Republic, Wind Telecom has confirmed plans to deploy an LTE TDD network to compete with the existing networks of Orange and Tricom.
In Saint Maarten, the regulator launched on Nov. 1 a public consultation regarding which LTE bands to allocate.
Trinidad & Tobago regulator TATT issued a request for proposals regarding use of spectrum in the 700MHz, 800MHz and 1900MHz bands as well as the opportunity for the entrance of a third player.
Responses are required by March 31, 2014. Digicel has said it plans to be the first LTE operator in the country.
Haiti’s telecoms regulator Conatel said in July it would launch a tender for a license to operate a 3G/4G mobile network in the 1900MHz spectrum band.
The spectrum band was previously operated by Haitel, which had its network shut down in April after going into receivership with debts of US$80mn.
Besides the LTE deployments numerous operators progressively upgraded networks in different countries to HSPA+, which is considered 4G. As of September there were HSPA+ services in 22 markets throughout the Caribbean, according to Informa Telecoms & Media.
In a move to boost adoption of mobile broadband, Digicel even launched in March its own brand of 4G capable Android-based smartphone dubbed the DL600.
Priced at under US$100; Digicel expects to reach larger segment of the population with mobile broadband.
The most important M&A activities were seen in November in the Dominican Republic. After months of speculation, Luxembourg-based telecoms group Altice acquired 100% of Orange Dominicana for approximately US$1.4bn and also 88% of Tricom for US$400mn.
Orange Dominicana has a 40% mobile market share and Tricom less than 10%. No indication has been made whether Altice would be interested in combining its assets to take on market leader Claro which controls 50% of the market.
CWC was also busy selling off assets though outside the region. The company completed the sale of its Monaco & Islands and Macau assets as part of its intention to renew its focus on the pan-American region consisting of the Caribbean, where it operates as LIME, and Panama.
C&WC continued to struggle in 2013 attributing a “difficult” Caribbean economy, particularly the Eastern Caribbean and Barbados but accelerated investments designed to reduce costs and improve services.
CWC went through multiple management changes this year with both LIME CEO David Shaw and CWC CEO Tony Rice stepping down.
The company also announced it would shift its headquarters from London to Florida as part of its restructuring and refocus.
The company continued to invest in diversifying its portfolio launching LIME TV pay TV service in the Cayman Islands making it the first quad-play provider in the Caribbean and adding to pay TV services in Barbados and St Lucia, in addition to mobile TV in Jamaica.
But the services haven’t been enough to stem the losses. During the six months to September 30 CWC Caribbean revenues fell by 6% as slight growth in mobile revenues was not enough to offset declines in broadband, TV, fixed voice and enterprise services.
CWC is also now facing competition in its traditional area of dominance, fixed line, after Digicel launched a fixed wireless service in CWC’s largest market Jamaica in July.
CWC said it is seeking to cut costs by US$100mn within two years.
On the organic side CWC is looking to further invest in fiber and HSPA+ 4G networks to drive pay TV and broadband. On the inorganic side the company is looking for acquisitions.
CEO Tony Rice said the opportunity to grow with data offerings is huge given the low smartphone, pay TV and broadband penetration in the Caribbean, as well as growing per capita incomes.
Something that may help is the joint venture CWC entered into in May with Columbus Networks to provide international wholesale capacity to each other and to third parties.
C&WC and Columbus operate largely complementary sub-sea cable networks in the Caribbean and Central America region. The JV will have a network platform of approximately 42,000km with connectivity to 42 countries.
It will initially operate by providing joint sales and marketing for both C&WC’s and Columbus’s international wholesale capacity services.
Rice said the alliance positions the company to meet the data capacity demands of its retail operations in the future and optimizes its capital expenditure commitment to its undersea cable networks.
CWC through its unit BTC will lose its 3-year exclusivity in the mobile market in April 2014 following its purchase of 51% of BTC in April 2011.
In a move to prepare itself for competition, BTC promise to launch LTE in December. Also in an attempt to reinvigorate its flagging landline business BTC launched a new low-cost package dubbed “love your landline” for domestic and international calls that uses the company’s legacy exchange infrastructure rather than IP.
The Bahamas Investment Authority (BIA) said it is reviewing applications from several companies looking to provide wireless services in the country, when the sector is liberalized. Only Digicel Group has been mentioned so far.
The Caribbean’s largest mobile operator Digicel continued to upgrade its networks, extended its corporate ICT offerings and even started tinkering with new areas such as energy.
The company launched LTE in the Cayman Islands in November, its second LTE market after Antigua and Barbuda and upgraded its St Kitts and Nevis operation to 4G HSPA+ with 96% coverage speeds of up to 21Mbps.
In October, the operator announced a J$4bn (US$39.1mn) investment in Jamaica to expand its 4G mobile network and upgrade 2G, building on the J$7bn investment over the last two years.
Also, earlier in the year, Digicel launched a consumer fixed line service in Jamaica with a J$300mn investment in a move to challenge LIME’s dominance in that area.
The service, called DigiHome, is a postpaid service that uses a wireless unit installed in the home to deliver voice and data services.
Offering corporate ICT services is a trend seen by many operators around the world. In January, Digicel created a new business unit in Panama focused on the corporate segment and competing directly with CWC in that country.
In a move to stamp its footprint in the ICT corporate space Digicel and Columbus Business Solutions (CBS), a subsidiary of Columbus Communications, announced in September ambitious plans to work together to expand cloud computing offerings in the Caribbean and beyond, with SMEs offering the best prospects for growth.
Digicel launched its cloud computing division in 2009 and has since invested nearly J$700mn (US$6.83mn) in a tier 3 datacenter in Jamaica, the only one on the island. In four years the firm has taken its cloud services to 30 markets and has long-term plans to compete with the biggest global players.
Columbus claims it is the only company in the Caribbean equipped to offer end-to-end solutions to organizations of any size, in any industry.
During the year Digicel’s business communications unit secured an agreement with the Caribbean’s largest furniture, appliance and electrical company Unicomer, which trades as Courts, to implement a unified communications and contact center solution.
CWC also secured significant ICT deals including contracts with Jamaica’s technology ministry and the Jamaica Constabulary Force to provide a cloud-based, hosted e-mail service.
OTHER BROADBAND INITIATIVES
Columbus Communications announced plans to construct a new broadband network in Barbados, investing in excess of 120mn Barbados dollars (US$60mn).
Columbus said it expects to reach 30% of Barbados households by the end of 2013. Columbus entered Barbados in 2012 with the acquisition of TeleBarbados and Karib Cable.
Carrier of carriers GlobeNet, a subsidiary of Brazilian telecoms operator Oi completed construction of its Segment 5 subsea cable system connecting Bermuda to the US.
The company’s submarine cable network spans 22,000km and connects Bermuda, Brazil, the US and Venezuela, with further plans to extend to Colombia.
This year also saw the much-anticipated launch of a satellite project that aims to provide fast and cheap broadband to billions of people in underserved areas.
O3b, whose name refers to the “other three billion” people that have limited or no access to connectivity believes it can provide cheap voice and data to operators by using a novel approach, with spacecraft flying in the medium-earth orbit (MEO) at 8,000km, a quarter of the distance from the earth of geostationary satellites, which reduces latency.
The first of four satellites went successfully into Orbit in July. The launch of the second group of satellites from French Guiana, scheduled for September 30, had to be delayed to allow time for further testing. A new launch date, expected to be in 1Q14, will be confirmed in due course.
Customers already signed up for capacity include Royal Caribbean Cruises, Ozônio Telecomunicações for the Brazilian Amazon region, Skynet Colombia for the Colombian Amazon and ISP Quark of Guyana.
While operators in most countries seem to jump at any chance of obtaining additional spectrum, this doesn’t seem to be the case in Jamaica.
In October, Jamaica’s Spectrum Management Authority (SMA) was forced to cancel an auction for the 700MHz band after it failed to attract a single bidder, despite high initial levels of interest from 10 countries.
This was the second setback in 2013. In May the SMA was obliged to delay the tender due to a lack of interest and suspicions that the reserve prices for the two spectrum blocks – US$40mn and US$45mn – were too high.
In November, the SMA invited companies to express their interest in potentially bidding for licenses in the 1800MHz, 1900MHz, 1700/2100MHz and 2.5/2.6GHz bands.
Jamaica also saw its plans to introduce number portability by the end of 2013 pushed back to May 2014 after technology state minister Julian Robinson said further due diligence was required.
Underdog LIME has said it is confident it would benefit from number portability, once introduced, by attracting customers from Digicel.
Among the concrete action that was taken was Jamaica’s Office of Utilities Regulation’s (OUR) reduction of mobile termination rates to J$1.10 (US$0.01) from J$5, becoming effective July 1 and lasting until June 30, 2018. The move was made to level the playing field where Digicel accounts for 90% of the market.
In March Dominica launched an internet exchange point (IXP), the second in the Organization of Eastern Caribbean States (OECS) and the third in the English-speaking Caribbean.
The three local ISPs – LIME Dominica, Marpin 2K4 and SAT Telecommunications – partnered with the National Telecommunications Regulatory Commission (NTRC) and US-based Packet Clearing House (PCH) to launch DANIX.
At the end of May 2011, the British Virgin Islands (BVI) and Grenada launched IXPs. Other countries that have begun discussions on IXPs are St Kitts and Nevis, St Vincent and the Grenadines and Jamaica.
The regional IXP initiative has been spearheaded by the CTU and (PCH). Benefits include reducing internet traffic latencies and costs by allowing traffic to be routed locally instead of depending on expensive international connections.
Digicel agreed to eliminate roaming charges for its customers within the 15 Caribbean nations known as the Caribbean Community, or Caricom, taking effect on October 1, 2013.
Following negotiations with the CTU, each travelling subscriber will be treated as if they are using their local/domestic Digicel network throughout the region.
As one of the last countries in Latin America to still not liberalize its telecoms market, the government of Guyana said in July it had held “fruitful” discussions with incumbent Guyana Telephone and Telegraph (GT&T) and would resume talks on liberalization in the national assembly following.
The case continues.
Cuba witnessed several important developments in 2013. A submarine cable linking the island to Venezuela and Jamaica was finally activated, ending months of speculation about what had happened to the project after the cable landed in Cuba early 2011.
Telefónica and CWC are providing services to state operator Etecsa via the cable. The submarine cable has provided the country with fixed-line internet infrastructure, decreasing its historic dependence on slow satellite connections.
On June 4, Cuba lifted all restrictions on internet access for normal Cubans, allowing them to get online via Etecsa’s 118 internet centers throughout the country.
Cubans were allowed access, which was previously allowed only to foreigners, for the first time in February.
The move was part of a wave of reforms for the country this year given President Raul Castro’s relaxation on foreign travel restrictions in January. Etecsa also introduced a new mobile charging scheme, decreased the cost of calls, and outlined plans to install a fiber optic network along its national train system.
However with an initial cost of US$4.50 per hour unrestricted internet navigation, this is still prohibitively expensive for most Cubans who earned an average monthly salary of 455 pesos (US$17.17) in 2011.
The country’s national statistics office reported that there were just 7 computers per 100 inhabitants and 1.3mn mobile subscribers as of 2011 suggesting that widespread domestic internet use is still a long way off.
That said, by the end of August, more than 100,000 Cubans had signed up to use the service.
Castro began allowing the sale of cellular phone services to the general public for the first time in 2008. As with internet, the service was very expensive at the outset, however Cuba expects to reach 2mn mobile lines by the end of this year and 4mn in the next five years.
Cuba’s also chose the Chinese Digital Terrestrial Multimedia Broadcast (DTMB) standard after completing digital TV tests in Havana in June. With equipment donated by Beijing, the technology is to be implemented across the country’s provincial capitals in 2014 and the analog switch-off due to be complete by 2021.
Cuba’s choice breaks with the norm for most countries in Latin America that have chosen Brazil’s adaptation of the Japanese digital TV standard, ISDB-T.
The CTU continued in 2013 with its Caribbean Roadshows designed to promote the use of ICT for the development of governments, businesses and citizens.
This year a Roadshow and Internet Governance Forum was held from September 9-11 in Curaçao. The three-day program focused on areas including e-commerce , e-health , e-government, e-education , cyber security and social media.
In July the CTU and the Commonwealth Telecommunications Organisation (CTO) signed an MOU to assist their stakeholders leverage ICT for social and economic development.
The CTO is planning to contribute towards CTU activities, including the Caribbean Telecommunications/ICT Ministers Meeting due to be held in the fourth quarter of 2013 and the CTU’s 25th Anniversary Celebrations in April 2014. Moreover the CTO and CTU will consider joint capacity building programmes on a broad spectrum of ICTs.
In December, the CTU and the Internet Corporation for Assigned Names and Numbers (ICANN) signed an MOU to increase cooperation and coordination between both organizations.
The signing took place during the Caribbean ICT Week in Jamaica.
CTU secretary general Bernadette Lewis and ICANN president and CEO Fadi Chehadé committed to start implementing concrete actions in the upcoming weeks including capacity building, partnering for outreach events and fostering multi stakeholder dialog at regional and national levels.
In July, Canto held its 29th Annual Conference & Trade Exhibition in Aruba entitled “Towards a SMART Broadband Caribbean Community.”
The conference was attended by over 700 delegates including telecoms/ICT ministers, operators, regulators, suppliers and other industry professionals.
The Council of Ministers of the Eastern Caribbean Telecommunications Authority (ECTEL) held its 28th regular meeting in Dominica from October 24-25th in Portsmouth, on the island of Dominica.
Top on the agenda for discussion were: the C&WC/Columbus strategic alliance to sell wholesale capacity to third party carriers; the establishment of a competition authority; roaming and call termination and the use of the 700MHz band.
Other issues included the harmonization initiative for developing a regional ICT infra-structure for broadband, spectrum management, cyber-security and e-legislation among member states.
And ending on a hopeful note, during the First Latin American Regional Telecommunications Congress which took place in Panama City from July 23-26, delegates agreed to put forth an ambitious program to try to identify the conditions needed to generate the necessary investment to close the digital divide by 2020.
The Inter American Development Bank (IDB) estimates that to close the digital divide by 2020 in the region would require at least US$345bn of investment in fixed and wireless networks.
Most of that investment would have to come from the private sector but the idea is to create favorable conditions to encourage investment by helping reduce the cost of infrastructure deployment through eliminating obstacles such as excessive taxation.
Currently, mobile internet penetration in Latin America stands at 18%. The aim for 2020 is to raise that to 96%.