The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Regulators will press ahead this year with plans to facilitate fifth generation (5G) mobile roll-out despite Cable Bahamas’ warning that the technology is “not commercially viable” in the medium-term.

The Utilities Regulation and Competition Authority (URCA), unveiling the results of its consultation on the “road map” to deploying 5G mobile technology throughout The Bahamas, confirmed it will “release premium spectrum [mobile frequencies] for 5G in low and mid-bands in 2025” in an effort to move the process forward given the potentially significant economic and development benefits it can bring.

But Cable Bahamas, in its consultation response, while acknowledging the benefits that the latest mobile network technology can generate for tourism, businesses and the wider economy, warned that “the key issue that needs to be recognised more clearly” by the likes of the Government, URCA and others is that such a roll-out does not make commercial business sense for operators such as itself in the medium-term.

Arguing that forecasts for mobile data growth are “over-optimistic”, the BISX-listed communications provider asserted: “Cable Bahamas cautions URCA against over-enthusiasm for the benefits of 5G, which make little difference to the consumer experience relative to 4G [the existing mobile network], and are not likely to convince them to pay more for a 5G service.

“While forecasts for mobile data show exponential growth, such as those shown in URCA’s consultation document, these forecasts are proving to be over-optimistic.... URCA should therefore treat such forecasts with a healthy scepticism.

“Furthermore, Aliv’s own experience shows that the demand for mobile data has been largely static since the end of the pandemic in 2022. Cable Bahamas hopes that this information will help URCA understand Aliv’s position that the commercial roll-out of 5G is not commercially viable at the present time.”

The data upon which Cable Bahamas came to this conclusion was redacted on the basis that this was proprietary to Aliv and should be treated as commercially confidential. However, the BISX-listed communications provider reiterated its stance in a summary of its position.

“The key issue that needs to be recognised more clearly in the consultation document is that the commercial business case for rolling out a 5G network in The Bahamas does not exist, at least for the medium term,” it said.

“Aliv has found that the forecasts for rapid growth in mobile data, on which many 5G business plans have been predicated, have not materialised. Furthermore, opportunities for additional revenues are very limited as customers are not willing to pay more for improved latency or unlimited data packages, and the number of mobile subscribers in The Bahamas has reached saturation.”

And Cable Bahamas, in what some observers may interpret as motivated by self-interest, also argued that restricting the Bahamian mobile communications market to just two providers - itself and the Bahamas Telecommunications Company (BTC)  - is critical to make any investment in 5G networks “economically viable”,

And it returned to a familiar theme by voicing fears that Elon Musk’s satellite Internet service provider, Starlink, is perfectly poised to break this duopoly and become a third mobile operator in The Bahamas as early as 2026. In effect, Cable Bahamas is arguing that allowing Starlink to become a third mobile operator will destroy any chance of earning a return on 5G investments by over-saturating the market.

“Cable Bahamas believes that URCA has set out a number of positive positions in the consultation document that will bring the goal of universal availability of 5G services closer. This includes URCA’s recent investigation into the possible further liberalisation of the cellular mobile market in The Bahamas, which concluded that a third mobile network operator would not be commercially viable at this point,”it added.

“CBL, however, has taken note of the grant of a licence by URCA to Starlink, a subsidiary of SpaceX, to provide satellite broadband services throughout the Commonwealth in 2022, and given the rapidly evolving satellite industry towards the provision of cellular mobile satellite services by 2026, Cable Bahamas is closely monitoring the trajectory towards Starlink being in position to be the third mobile operator in the country by said date.

“As has been pointed out in previous submissions on this subject, the business case for 5G roll-out in The Bahamas is marginal at best and a number of conditions will need to be met to make 5G investments economically viable. Maintaining a market structure of two operators in a small market like The Bahamas is one of those conditions.”

And, arguing that 5G’s roll-out should be part of a much wider Bahamian digital communications strategy, Cable Bahamas said: “Cable Bahamas is of the view that, in order to create a suitable climate for 5G investments, a much more comprehensive digital national strategy needs to be developed and implemented to allow for the growth of new information and communications technology (ICT) market segments, for example in Artificial Intelligence (AI), Internet of Things (IoT) and e-Government initiatives.

“This may need to include a review of existing legislation to ensure the ICT ecosystem in the Bahamas is supported by a fit-for-purpose legal framework for this new digital age. The ‘build it and they will come’ approach to 5G will not work, and a comprehensive effort by multiple stakeholders will be needed to ensure the potential economic benefits associated with these new technologies become a reality.”

The BISX-listed communications provider also hinted at the difficulties that it may face if itself and Aliv, its mobile subsidiary, are forced to switch communications equipment provider from present supplier, Huawei, due to potential “political” pressures. It did not define these, though it was likely referring to the growing competition between China and the US.

“Aliv is uncertain on the use of its current supplier, Huawei, for any rollout of 5G, especially if the non-standalone version is used, which requires interworking with the existing 4G network,” Cable Bahamas said. “To have to change of suppliers in order to meet certain political objectives, such as a reduction in reliance on Chinese suppliers, would impose additional costs on Aliv, making the case for investment more difficult.”

URCA, though, is forging ahead. It said in its statement of results that it will begin work on establishing a regulatory framework to govern and facilitate 5G’s Bahamian roll-out during the first four months of 2025. “URCA aims to begin work on establishing the regulatory framework to facilitate the deployment of 5G in The Bahamas in the first trimester of 2025, subject to further public consultations,” it said.

“URCA will aim to confirm the low-band and mid-band spectrum bands for 5G deployment before the end of the third trimester of 2025, with its preliminary focus including Bands 41, 66, 2, 71, and 78. This process will involve meetings with the Government and other relevant stakeholders.

“Based on the respondents’ submissions and the availability of sufficient spectrum to facilitate the deployment of 5G, URCA will refrain from exploring the possibility of refarming Bands 77 and 78 at this time. However, this decision is subject to change if circumstances arise that are necessary to advance the main objectives of the electronic communications policy and the policy 2024- 2027.”