The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian communications industry saw its total turnover increase 3.7 per cent year-over-year to hit $444 million in 2011, regulators have estimated, despite cellular phone subscribers falling by 90,000 since 2009. The Utilities Regulation & Competition Authority (URCA), unveiling its draft plan for 2013, said total sector revenues had rebounded back to 2009 levels, having fallen by 7 per cent from $440 million that year to $428 million in 2010. “URCA estimates that in 2011 the electronic communications sector contributed approximately $444 million, or 5.7 per cent, of the country’s Gross Domestic Product (GDP) of $7.787 billion,” the regulator said.

“It did so while employing over 1,350 persons or 0.82 per cent of the country’s workforce.”

The communications industry, which is dominated by the Bahamas Telecommunications Company (BTC) and Cable Bahamas, saw its 2011 top-line increase despite the former`s cellular subscriber ratios falling from 102 per 100 inhabitants in 2009 to just 84 subscribers per 100 citizens in 2011.

“This represents a decrease of more than 90,000 in the total number of subscriptions,” the regulator added.

“URCA’s information indicates that much of this decrease has resulted from more effective and aggressive treatment of dormant prepaid accounts, and significant improvements in the accuracy of reported information.”

But, repeating previously articulated sentiments, URCA said BTC`s continuing cellular monopoly, which in practice is unlikely to expire until 2016, was not ideal for fostering growth in this market segment.

“It is noted that a monopoly in the provision of cellular services is not considered to be optimal for encouragement of growth,” URCA said.

Still, the Bahamas retains a relatively high level of cellular penetration. Its 84 subscribers per 100 inhabitants ratio is just below the 85.7 world average, and ahead of both the Asia-Pacific and African regions.

However, the Bahamas is behind both Europe, the world leader, with 120.8 cellular subscribers per 100 persons, and the Americas, which has 105.4 cell phones per 100 persons.

When it came to fixed-line voice services, URCA said 2011 saw a recovery in subscriber numbers. “Fixed‐line penetration rates declined from 2009 to 2010 by 7.5 per cent, from a total of 128,726 subscribers to 123,039 subscribers, though the period from 2010 to 2011 displayed a recovery in total subscribers, growing by 3.2 per cent to 127,002,” the regulator added.

“This means that at the end of 2011, there were approximately 36 subscribers for every 100 persons in the Bahamas.”

This penetration rate compared favourably to the rest of the world. Only Europe, with 40.9 subscribers per 100 inhabitants, was better placed than the Bahamas, with this nation well ahead of both the 29.2 Americas region standing, and the world average of 17.3.

As for fixed-line broadband Internet services, URCA said penetration “remained fairly static” in 2011, with subscriber numbers falling from 19 per 100 inhabitants in 2009 and 2010 to 18 in 2011.

“The Bahamas’ 2011 fixed broadband penetration at 18 subscribers per 100 inhabitants places the Bahamas in 41st place globally, between Cyprus and the Czech Republic,” URCA said.

“The top penetration in the world is achieved in Liechtenstein at 71.6 subscribers per 100 inhabitants, while the UK is at 32.7, the US at 28.7 and Singapore at 25.5. Barbados is the only regional country which is ahead of the Bahamas at 22.1.”

Again, only Europe was ahead of the Bahamas as a region when it came to fixed broadband Internet penetration, with 24.8 subscribers per 100 inhabitants in 2011. The Americas, with 15.4 subscribers, and the world at 8.5, were both behind this nation.

“The most recent survey of Internet users was conducted with the 2010 census, and revealed that 65 per cent of all persons in the Bahamas are Internet users,” URCA said.

“This places the Bahamas at No.41 worldwide, and 12th among developing countries in Internet users. Iceland reported the highest number of Internet users with 95 per cent, while the UK reported 82 per cent Internet users, and the US 77.9 per cent. Regionally, only Antigua & Barbuda reported a higher number of Internet users.”

URCA again used the findings of a 2009 World Bank study to demonstrate how important the communications industry, and especially broadband Internet penetration, was in stimulating Bahamian economic growth. It noted that the World Bank had estimated that a 10 per cent increase in broadband Internet penetration correlated to a 1.21 per cent rise in GDP growth.

The World Bank report had also found that a 10 per cent increase in fixed-line and cellular penetration equated to increases of 0.43 per cent and 0.6 per cent, respectively, in GDP growth.

“It is therefore of immense value to the Bahamas to encourage and foster growth in the electronic communications sector, and particularly in the area of broadband access to the Internet,” URCA said.

“It is of critical importance that the Bahamas, as an archipelagic nation, acknowledges and never drops the ball on electronic communications as a key enabler in development and nationhood.

“Without electronic communications it would be impossible for the Bahamas to maintain external competitiveness, cohesive socioeconomic links throughout the country, or effective central Government.

“It is also clear that electronic communications can have a wider impact upon the economy, so that increases in take up of Information and Communications Technologies (ICTs) can materially enhance a country’s productivity.”

URCA added that pentration by Cable Bahamas` pay-TV product had remained “more or less static” at 22.89 subscribers per inhabitants between 2009 and 2011.