The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Regulators have pledged “to develop a road map” for deploying 5G (fifth generation) technology in The Bahamas amid continuing concerns from the two incumbent operators about the arrival of Elon Musk’s Starlink.

Both Cable Bahamas/Aliv and the Bahamas Telecommunications Company (BTC), in their first-round responses to the Utilities Regulation and Competition Authority’s (URCA) 5G consultation, both cited the disruptive potential of the Tesla and Twitter (X) magnate’s satellite Internet service provider when it came to their future investment plans.

BTC, in particular, asserted that Starlink’s licensing by URCA will both undermine the communications industry’s growth and affect its 5G planning and roll-out plans. Its BISX-listed rival, meanwhile, raised queries about the nature of Starlink’s licence and how it was issued.

“URCA’s licensing of Starlink may impede local electronic communications sector development growth and goals, and will have implications for 5G planning and deployment in The Bahamas,” URCA surmised of BTC’s submission. As for Cable Bahamas and Aliv, they noted that “URCA has issued a class licence to Starlink, and has not published any information about the nature of its licence or the process for issuing it”.

URCA did not respond to ether operator’s specific Starlink concerns on the basis that a 5G consultation was not the correct forum for addressing them. However, many observers will likely view their submissions as further confirmation that both are worried by the competitive threat posed by the upstart entrant.

URCA granted a class operating licence and class spectrum licence to Starlink Services Bahamas, which was represented by the Lennox Paton law firm, on February 15, 2023. Starlink is an affiliate of Elon Musk’s SpaceX, which is not only seeking to offer satellite Internet services but also mobile services.

Starlink and SpaceX are backed by the considerable financial resources of Mr Musk, the Tesla/X magnate and entrepreneur, who has been ranked by both Forbes and Bloomberg’s Billionaires Index as the world’s second richest man with an estimated net worth between $167bn and $176.2bn. Starlink’s Internet and, potentially, mobile satellite services are already drawing interest in the Family Islands where Cable Bahamas and BTC’s networks do not extend or are seen as unreliable.

Meanwhile URCA, in its results statement on the first-round 5G consultations, reiterated that “affordable access to high-quality networks and carriage services in all regions of The Bahamas” remains one of its key objectives and goals under the communications sector policy.

“URCA is cognisant that advancements in technology are a catalyst for innovation and future development of The Bahamas. As such, it is crucial that cutting-edge technology such as 5G be available for consumption in The Bahamas where necessary,” it added.

However, Cable Bahamas and Aliv, in there feedback warned that the financial and “business case” for the nationwide roll-out of 5G mobile technology is “difficult” - especially where the more sparsely-populated and unprofitable Family Islands are concerned. As a result, 5G deployment is likely to take at least three to five years.

“The financial business case for the rollout of 5G throughout the entire Bahamas is difficult,” Cable Bahamas and Aliv said. “It is more likely that 5G will develop initially for specific customers or hot spot locations, and thereafter be rolled out incrementally to meet customer demands.

“The timescale for the rollout of 5G across The Bahamas is most likely to be three to five years. However, the need for specific locations may come much sooner. The regulatory environment for 5G needs to be established early on to permit the selective rollout of 5G to meet demand. URCA’s proposed next steps do not reflect this requirement and can be characterised as ‘wait and see’.”

URCA, in its response, said technologies other than 5G “may be more technically and economically feasible to serve more remote areas in The Bahamas” although it did not identify any specifics.

“URCA acknowledges Cable Bahamas/Aliv’s position that 5G technology will be initially used in The Bahamas to deliver existing mobile services more efficiently, not necessarily new ones, and that the 5G business case is based on revenue retention rather than additional revenues, which are difficult to obtain from customers who are used to unlimited use bundles and a saturated market, combined with high roll-out costs,” the regulator conceded.

“URCA is cognisant that there may need to be some amendments and/or additions to the existing regulatory framework in The Bahamas to facilitate 5G, including but not limited to assessing the need to issue additional spectrum; ensuring all mobile operators have access to fibre backhaul connectivity on reasonable terms; and/or facilitating site sharing where feasible.”

BTC, meanwhile, said existing operators were struggling to properly plan their investments amid ongoing uncertainty over whether the Government will licence a third mobile operator in The Bahamas. “Operators are hesitant to plan and strategise on their near to medium-term investments as licensing of a third mobile operator would significantly impact the profitability of existing mobile licensees and negatively impact investment in lower population density areas,” it added.

However, Cable Bahamas and Aliv argued that “URCA’s primary focus should be to develop a regulatory regime that addresses the barriers to 5G investments as much as possible, while also recognising the substantial investment risk to the operators in the market”.

Giving their views on how the 5G roll-out will likely play out, the two companies said: “In the short-term, the demand for 5G services is likely to come from services for tourists in specific locations, for example for those used to high-speed 5G services at home, or for the provision of services, such as gaming, that take advantage of 5G’s low latency.

Small businesses using fixed wireless access as a substitute for mobile or fixed broadband, and companies employing large data networks to connect remote or mobile points, such as ports, airports, distribution businesses and network businesses, were also identified as being among the likely early adopters.

“Cable Bahamas and Aliv expressed that, in the medium-term, demand for 5G services is likely to come from organisations that need to connect to mobile customers with high-speed reliable networks (banking, health, gaming), and from residential customers who can gain benefit from faster speeds and/or reduced latency and who can afford a 5G handset,” URCA said of their position.

“Cable Bahamas and Aliv noted that the Government has major opportunities to develop digital services over broadband, both for internal networks and for communications with citizens. The emergency services network and the networks operated by the Royal Bahamas Defence Force and the Royal Bahamas Police Force may benefit from 5G. Cable Bahamas/Aliv noted that it appears that URCA has not considered the demand for 5G from these sectors.”