The telecoms markets in most Caribbean countries are being progressively liberalized. With new approach to the market, the operators in these markets are able to offer a full range of telecom services. Thus, the telecom services spotted as one of the Caribbean’s major growth sectors, particularly in the mobile telephony and data segments.

Cable & Wireless Communications (operating services under the LIME brand) is the dominant telecom provider in most regional markets. Digicel and other players are offering effective competition, particularly in the mobile telephony sector. Digicel in recent years has also expanded its interests in the pay TV sector through a number of acquisitions. Investment in telecoms was for several years affected by the global financial crisis, which led to reduced revenue for operators, scaled-back government programs and a weakened tourist sector.

Although there has been considerable recovery in economies of the region overall, the telecom market continues to see price pressure for the main operators. Some markets remain suppressed, with little prospect for growth, and this has stimulated operators to invest in smaller players within the region to expanding their scale in a bid to maintain revenue stability. These moves, predominantly undertaken by companies such as CWC, Digicel and KeyTech, have resulted in further market consolidation in the region.

The Caribbean countries are principally dependent on tourism for revenue, and as such their economies can be affected by economic difficulties experienced within the principal client states (the US notably, as also some European countries from where most tourists to the region are derived).

Other than tourism, countries in the region have some small-scale primary industries, to a greater or lesser degree based on fisheries, bauxite and other minerals, and timber. Given the paucity of a manufacturing base, the telecoms sector accounts for a larger proportion of GDP than may be found elsewhere, at between 4% and 6%. Growth in telecoms revenue is expected to be low into 2015, at perhaps 1-2%. Further competition anticipated later in 2015 and in 2016 as a result of new mobile licenses, will place additional pressure on pricing and so further dampen the potential for growth among the key regional telcos.

Given the dependence on tourism by local economies, lower tourist traffic in the wake of the GFC helped to trigger recession in most Caribbean nations, leading a number of them to turn to the International Monetary Fund and World Bank for rescue financing or for alternative fiscal and monetary policy arrangements.

Key developments

• CWC completes acquisition of Columbus International
• Digicel receives approval to acquire pan-Caribbean submarine cable systems from Loret Group
• Operators expand FttP in several markets, HSPA+ available in most countries, with LTE emerging as operators focus investment on mobile networks’ regulatory developments
• Operator data and recent market developments.