The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government has pledged to close a ‘digital divide’ that has left 30,000 Bahamian households without fixed broadband Internet services, warning that it is “of critical importance that the Bahamas never drops the ball” on electronic communications.

Unveiling the new, draft three-year communications sector policy, a collaborative effort between the Government and Utilities Regulation and Competition Authority (URCA), the duo yesterday said broadband Internet and other services needed to reach all residents for the Bahamas “to achieve its full potential”.

Not ignoring the positive, data contained in the draft communications sector policy indicated the Bahamas was on the right track, with fixed broadband Internet penetration having increased from 61 out of every 100 households in 2011 to 72 households last year.

Acknowledging that this meant a further 10,000 Bahamian homes were connected to the Internet last year, the draft policy statement added: “While this growth is very encouraging, the Government continues to note that there remains an estimated 30,000 unconnected households in the Bahamas, and the Government will continue to promote policies and regulatory measures which would close this ‘digital divide’.

“For the Bahamas to achieve its full potential, the development must reach all of its residents, and therefore the failure of the Bahamas’ electronic communications infrastructure and services to reach any resident is a matter of concern. It is also important that achievement of increased penetration must ultimately translate into positive growth.”

The document added that if the Bahamian economy was to continue its growth, “further and faster development” of the electronic communications industry was required.

Given that international studies had linked increased fixed Internet broadband penetration to GDP growth, the Government acknowledged that electronic communications industry be one of its “key areas of focus”.

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

“Without an effective electronic communications framework, the Bahamas will face significant challenges in its efforts to maintain a cohesive socioeconomic link throughout the country. Likewise, effective central governance would also be compromised.”

On a personal level, fixed broadband Internet penetration in the Bahamas had reached 18 subscriptions per 100 persons in 2011, ranking this nation 50th in the world.

This was ahead of the 15.4 subscribers per 100 persons average in the Americas, and the global 8.5 average, but year-on-year trends at the time were less favourable.

“Fixed broadband line penetration in the Bahamas had actually decreased from 19 broadband Internet subscriptions for every 100 persons in 2009,” the policy statement said.

“By contrast, fixed broadband penetration rates were increasing elsewhere as the average global fixed-line penetration rate increased from 6.8 in 2009 to 8.5 in 2011.

“While at the end of 2011 the Bahamas compared reasonably well against global averages, Caribbean counterparts and other offshore financial centres, the decreasing penetration rate over the period from 2009 to 2011 was a source of concern for the Government.”

Happily, the draft policy statement added: “Based on preliminary figures for 2012 collected by URCA from its licensees, it is estimated that fixed broadband penetration grew materially from 2011 to 2012, with the estimated penetration for 2012 exceeding 22 subscriptions per 100 persons, indicating growth of approximately 25 per cent over the one-year period.”

To foster industry growth, the policy statement said the Government would examine reducing import tariffs on electronic communications equipment, plus review the sector’s Business Licence fees.

Doing the former, the document added, would “reduce the costs of building and maintaining electronic communications networks. In that context, priority is being given to wireless network equipment, so as to foster the build out of networks to remote parts of the Bahamas”.

And reduced Business Licence fees would focus on individual entrepreneurs, and small Bahamian-owned businesses, operating in the industry.

When it came to other communications services, the draft sector policy noted that BTC had gone some way to reversing the Bahamas’ mobile broadband data position, which in 2011 was “far behind our regional neighbours and at the bottom of international rankings”.

“The Government is concerned about the apparent lag in the introduction and development of mobile broadband data services in the Bahamas, though it is expected that this area will also experience appreciable improvement with the introduction of competition in the mobile market,” the draft industry policy said.

“The Government is pleased that the launch of mobile broadband services by BTC in 2012 led to a substantial take-up of mobile broadband services within its first year of service, with the number of subscriptions being over 110,000 at the end of 2012, resulting in penetration of 31.27 subscriptions per 100 persons.”

Yet the document added: “The Government is satisfied nonetheless that the lack of options for available broadband data services in the Bahamian market is prejudicial to the country’s development, as the current market offerings are not sufficient to meet the demands needed to fuel growth and stimulate the economy at the pace that matches the Government’s developmental plans and the appetite of consumers.

“Such deficiencies have typically been met through full competition in all markets, particularly in the mobile market. Currently BTC holds a monopoly on cellular services until April 2014.”

Fixed-line penetration, standing at 37.44 fixed lines per 100 subscribers at end-2012, placed the Bahamas ahead of most global regions, and Caribbean and international financial centre rivals.

“The international average for fixed voice penetration has decreased from 18.3 per 100 persons in 2009 to 17.3 in 2011, and early estimates show this average is expected to decline further to 16.9 by the end of 2012,” the draft sector policy said.

“The fixed-line penetration rate in the Bahamas decreased from 37.64 subscriptions per 100 persons in 2009 to 35.91 in 2011, but had recovered to an estimated 37.44 as at the end of 2012 (perhaps reflecting increased competition in that market which began in late 2011, with the offering of fixed voice services by Cable Bahamas).”

Some 89 Bahamians out of every 100 have fixed-line service, and the sector policy noted that this number may be higher when Voice over Internet Protocol (VoIP) services are included.