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Telecommunications in Central America
and the Caribbean

by Faulkner Staff

Copyright 2019, Faulkner Information Services. All Rights Reserved.

Docid: 00011196

Publication Date: 1902

Report Type: MARKET

Preview

The telecommunications markets of Central American and the Caribbean have been wrestling with several roadblocks including political instability, sub-standard infrastructure, poor economies, natural disasters, and inadequate investment. Many of the markets, particularly in the Caribbean, have made improvements to their network infrastructure
in order to support the booming tourism industry. Wireless telecommunications in particular have played an important role in these countries; there are now more mobile phones than landline phones in every nation
of Central America and almost every country in the Caribbean.

Report Contents:

• Executive Summary
• Market Dynamics
• Market Leaders
• Market Trends
• Strategic Planning Implications
• Web Links
• Related Reports

Executive Summary

[return to top of this report]

The telecommunications markets of Central American and the Caribbean
have been wrestling with several roadblocks including political instability,
sub-standard infrastructure, poor economies, natural disasters, and inadequate
investment.

Many of the markets, particularly in the Caribbean, have made improvements to their networks in order to have an infrastructure
that can support the booming tourism industry. Wireless telecommunications in
particular have played an important role in these countries, and there are now
more mobile phones than landline phones in every nation in Central America and
almost every nation in the Caribbean.

Local
governments across the region have attempted to promote competition and
jumpstart investment by deregulating the market and privatizing former monopoly
providers. For the most part, the individual telecommunications markets are now
open to competitors, but there are a few markets that remain monopolies, despite
pressure from the international community to move forward with liberalization,
particularly the signatories of the Central American Free Trade Agreement
(CAFTA). While many markets have been open to competition, alternative
fixed-line carriers have not had much success in gaining a market share and the
incumbent providers still dominate sectors, although there are some major
players in the global telecom market active here, particularly Flow, Telefonica, and America Movil. These
companies are going to be the ones driving investment in the Central American
and
Caribbean
telecom markets instead of competitors. 

Central America

Central America includes the three most densely populated countries in the Western
Hemisphere: El Salvador, Guatemala, and Costa Rica, with almost 21.17 million
people in a relatively miniscule amount of land. It also includes Belize, Honduras, Nicaragua, and Panama.
The region has been in a process of transformation
after years of civil war. For decades, Central America has had a high
population growth rate and is one of the most demographically heterogeneous
regions in the world.

Figure 1. Map of Central America

Source: Maps.com

The following chart provides some population and economic statistics for Central
America.

The Caribbean

The
Caribbean basin is home to several tropical island nations, which were first
colonized by European nations and now represent a large cultural mixture of
countries, including Anguilla, Antigua & Barbuda, Aruba, Bahamas,
Barbados, Bermuda, the British Virgin Islands, Cayman Islands, Cuba, Dominica,
Dominican Republic, Grenada, Guadeloupe, Haiti, Jamaica, Martinique, Netherlands
Antilles, Puerto Rico, St. Kitts & Nevis, St. Lucia, St.
Vincent/Grenadines, Trinidad & Tobago, and Turks & Caicos. These
islands are home to more than 39 million people. African,
Chinese, East Indian, Japanese, English, Spanish, French, and Dutch are all
official languages of the Caribbean. Overall, the people in this region mostly
reside in poverty. 

The
following figure shows a map of the Caribbean. 

Figure 2. Map of The Caribbean

Source: Maps.com

The following chart provides some population and economic statistics for the
Caribbean.

Source: CIA World Factbook, United Nations, & World Bank

Market Dynamics

[return to top of this report]

For
the last decade and a half, Central America and the Caribbean, along with the rest of Latin
America, have undergone a massive effort to privatize and liberalize their
entire marketplace, including telecommunications, hoping for an opportunity to
improve quality of life for impoverished citizens and create
opportunity for global competition and private foreign and domestic investment.
As a result, almost all countries in the region now have some form of
liberalization, especially in the value-added and mobile markets. However, a few
countries still have a monopoly in the local fixed-line telephony sector.

Overall,
the biggest frustration and hindrance to further growth has been poor
infrastructure development. Although it has improved, the growth has been at a much
slower pace than other middle income countries. A sharp fall in
private investment in telecommunications infrastructure is linked to hindering
economic growth, reduction of poverty, and the region’s inability to compete
globally. 

In
addition, poor roads, no electricity, and lack of fixed telephone lines is
hampering the telecommunications industry with only the cellular market doing
well comparatively. Increased investment from both the public and the private
sectors will speed development, particularly in the broadband and fixed-line
markets. Another issue facing these countries is isolation, particularly in
the Caribbean, which makes connection to global networks expensive.

Privatization has helped the market, but attracting investors is difficult.
Investors are faced with significant costs in infrastructure development and
limited returns due to generally low incomes. Major international investors have
had some success, however, particularly by jumping into several of the
small
countries to create a larger market. Participants in the region in recent years
have included Digicel; Flow, formerly known as Cable & Wireless; and LIME.

Several countries in the region participate in a
group called the Caribbean Telecommunications Union (CTU), which is considering
setting up a regulatory commission to help develop policies and guide several
markets. The current members are

Anguilla, Antigua & Barbuda, the
Bahamas, Belize, Barbados, the British Virgin Islands, the Cayman Islands, Cuba,
Dominica, Grenada, Guyana, Jamaica, Montserrat, Saint Kitts & Nevis, Saint
Lucia, Saint Martin, Saint Vincent and the Grenadines, Suriname, Turks and Caicos, and Trinidad &
Tobago.

Central America

When
the telecommunications sector alone is examined, it is an excellent example of the
overall economic state of affairs in Central America. Huge disparity exists
between urban and rural life, the governments are pushing for liberalized and
privatized economies but making slow progress in some areas, and foreign
investment is hard to come by. Huge disparity also exists from one Central
American country to the next in terms of teledensity and service offerings.
Table 3 outlines the state of the telecom markets in each country.

Source: International Telecommunications Union

Belize.
Belize
was one of the first countries in Latin America to begin digitizing its
communications infrastructure, but there is still much room for improvement. The
incumbent service provider, Belize Telemedia Ltd. (BTL), held a monopoly on all
voice and Internet services until 2003. The company was privatized in 1988 but
was renationalized in 2009, and later absorbed by DigiCell. Its new owner is now
the dominant player in the market.

Belize's mobile market is not as advanced as many of the other countries in
the region. At the end of 2017, there were 239,411 mobile customers, which is a
63.9 percent density rate, the lowest in the region. There are two companies
operating in the market: DigiCell and Smart. Smart introduced 4G service in
Belize City in December 2015, and DigiCell announced in March 2016 that it is
investing $19.6 million on its own 4G network.

According to the International Telecommunications Union, 44.6 percent of the
country uses the Internet, but the broadband density rate is just 5.4 percent.

Costa
Rica. Costa Rica's telecommunications market was one
of the last in the region to allow competition. A state-owned company called
Grupo Instituto Costarricense de Electricidad (ICE) provided all of the country's
electric and telephone services until the market was deregulated as a condition
of the Central American Free Trade Agreement. ICE now provides telecom services
to Costa Rica through a subsidiary named Kolbi. In addition, there are 12 other landline
companies operating there. The government introduced fixed number portability in
June 2015 to help promote more competition.

Like many countries in this part of the world, Costa Rica has a thriving
mobile sector and the number of wireless phones exceeds the number of people
living there. According to the most recent information released by the
International Telecommunications Union, Costa Rica has 8.8 million mobile
customers, for a density rate of 180 percent. Kolbi
was the only player in the wireless market until November 2011, when the market
was deregulated and Claro and Movistar entered it. This competition has fueled
growth and promoted investment. All three of the mobile operators now offer 4G
services.

Great progress has been made on the Internet front since the market was
deregulated in 2009, and Costa Rica now leads all of Latin America in Internet
penetration. According to the ITU, Costa Rica has about 744,041 broadband subscribers, meaning
15.2 percent of the population
has a connection.
The primary Internet service provider is a subsidiary of ICE called RACSA. In
2014, ICE brought RACSA under the direction of its telecommunications division
in an attempt to stop six consecutive years of financial losses.

El
Salvador.
El Salvador has the most liberalized telecom market in Central America, and the
market has benefited from tremendous foreign investment since privatization
began in 1998. The two key fixed-line operators are CTE, which is owned by
America Movil, and Telefonica. The government originally passed a law allowing
number portability in June 2010, but the country's telecom authority repeatedly
held off implementing the regulations because the two telecom carriers were not
ready to support it. After almost five years of delays, number portability was finally introduced in February 2015.

El Salvador has 9.9 million wireless subscribers,
which means the density rate is 156.4 percent. This
part of the market is fully open to competition and there are five companies
competing there: Tigo (Millcom), Claro (America Movil), movistar (Telefonica),
Digicel, and RED.

In November 2016, Tigo said it will start providing 4G service in mid-December with plans to invest $1 billion between
then and 2020 to reach 80
percent of the population. Movistar launched 4G service in December 2016.

50.3 percent of the country uses the Internet, a massive upswing from the 27
percent using it just three years ago. This is thanks in large part to the
addition of more than 100,000 broadband subscribers in that time, bring the
country's total to 442,727, or just under 7 percent of the population.

Guatemala. Guatemala has the biggest population, the largest
economy, the fastest growing GDP, and the most numerous labor force in all of
Central America. Approximately 60
percent of the population lives in rural areas, which is the highest percentage
of rural population in Central America. Over half of the labor force works
in agriculture. Since privatization began in 1998, Guatemala has made great
strides in the development of its telecoms infrastructure. However, this
progress has been hindered by a
social tariff policy on electricity which prevents the poorest citizens from
accessing the power grid. TELUGA, the former monopoly service provider, is the dominant local and
long distance carrier. It is owned by America Movil.

Mobile
telephony has been the fastest growing telecom market. Thanks to a very liberal
radio spectrum regulatory model, mobile phones now outnumber fixed
lines by a huge margin. The country has just under 20 million mobile customers for a
penetration rate of 118.2 percent. There are three companies competing in
Guatemala: Tigo, Claro, and movistar. All three offer 4G service.

The broadband sector
has been very slow to develop as a lack of electricity, poverty, a small private
sector, and poor education have hampered growth. At the end of 2017, only 34.5
percent of the country was online and 2.6 percent had a broadband connection.

Honduras.
Honduras is ranked as Latin America ‘s second poorest country based on per
capita GDP, and it has a poor teledensity of less than 6 percent. The local government has tried
repeatedly to privatize the state-owned monopoly provider, Hondutel, but there
was limited interest. As of 2019, no deal has ever materialized.

Private
competition does exist, however, in the mobile market, where there are three
carriers providing service to the country's 8.2 million mobile customers,
which is a 88.9 percent penetration rate, a decline from the 98 percent the
country had reached three years ago. This trio of companies is Tigo (Millicom), Claro (America Movil), and Tegucel Sulacel Ceibacel (Hondutel). 

Tigo launched 4G service in December 2014. It is required to provide
next-generation service in all major cities by 2016 as a condition of its 4G
license. Claro also offered 4G service in March 2015.

The Internet sector in the Honduras is relatively poor. 32.5 percent of the
population uses the Internet at all, and the broadband subscriber rate is just
2.6 percent.

Nicaragua.
Teledensity
in Nicaragua is one of the worst in the Western Hemisphere: just 6 percent. Recent years, however, have brought about
significant progress for Nicaragua’s telecoms sector. The market is fully open
to competition, and the former state-owned monopoly, Enitel, has been fully
privatized and is now owned by America Movil. In October 2009, the
Nicaraguan government issued a license to Yota, a Russian company that built a Wi-MAX network to offer fixed-line telephone service and broadband
Internet access.

Wireless service has helped bring telephone service to many people without
access to a fixed-line connection, and the mobile density rate is now 131.5
percent. There
are two wireless carriers operating in Nicaragua: Claro (America Movil) and movistar
(Telefonica).

Another company called Xinwei Telecom launched service in November 2015 after
years of delays. The company continues to operate in the region under the brand
name CooTel.

Movistar introduced 4G
service in November 2015, and its network now covers 12 cities across the
country.

Internet services, however, have been very slow to develop because of
poverty and poor infrastructure. At the end of
2017, 30.6 percent of the population was online and the broadband density rate
was 3.4 percent.

Panama.
Fixed-line services have been fully liberalized since January 2003,
ending a monopoly held by LIME (Cable & Wireless). Despite operating in a
competitive market, LIME is still the dominant provider of local and long
distance services.

Panama
has a shrinking mobile sector, with 5.19 million customers and a penetration rate
of 126.7 percent. There are four companies competing in the market: Cable &
Wireless, movistar
(Telefonica), Claro (America Movil), and Digicel. All four companies offer GSM,
GPRS, EDGE, UMTS, and LTE service. Panama was the first country in the region
with 4G mobile service.

According to the International Telecommunications Union, 69.1 percent of
the population is online and the broadband rate is just under 11 percent.

The Caribbean

Despite
the endemic poverty rate in the region, the Caribbean’s mobile
telecommunications market is thriving. In fact, parts of its infrastructure are
actually as advanced as any in the world (in the larger island nations) and
teledensity is remarkably high in most countries. Table 4 provides an overview
of some key market indicators. Please note that the International
Telecommunications Union, the source of the data included in this table, does
not have recently available statistics for some nations.

Its service-oriented economy, which includes its focus on tourism, and its
proximity to North America have helped to advance this market segment. The
region does, however, have a large disparity in telecommunications offerings
between its rural, agricultural areas and its urban, business sectors. The
government is constantly balancing the demand for enhanced services by the
business community and the demand for basic telephone service by the rural
community.

Initially, telecom services in the Caribbean were under monopoly control,
due to the British colonial rule that was present in most of the countries
up until as late as the 1980s. However, after this rule ended, a push began
for privatization and liberalization. Overall, the liberalization has taken
place in various phases. Initially, the Hispanic markets of the region were
the first to privatize, such as in Puerto Rico and the Dominican Republic,
back in 1986 and 1992, respectively, beginning with competition in the
mobile telephone market. Then, in 2001, Jamaica opened its telecoms market
to competition, which sparked other countries in the region to open their
markets as well.

Overall, however, the success of liberalization has largely been limited to
the mobile telephony sector. Most Caribbean nations do not yet have
competition in the fixed-line sector, and mobile penetration is quickly
reaching saturation. Hopefully, this issue will encourage development in
other areas, such as fixed-line and broadband.

Anguilla. Anguilla is a self-governing British territory
consisting of five islands located among the Leeward Islands of the Lesser
Antilles. Flow held a monopoly over all fixed-line telephone services until
2018, and the density rate is 41 percent.

The people of
Anguilla did not get access to mobile telephone service until 2004. There are
currently three mobile providers operating on the island to the islands'
26,000 customers: Digicel, Flow, and Weblinks. All three operate GSM and LTE
networks.

Anguilla has 5,000 broadband subscribers for a density of 34 percent. In
addition, 84.4 percent of the country uses the Internet.

Antigua &
Barbuda. Antigua and Barbuda are a pair of islands located in the Lesser
Antilles that are considered an independent state within the British
Commonwealth of Nations. The country's telecommunications market is still a
monopoly. The Antigua and Barbuda Public
Utilities Authority currently provides all domestic fixed-line services. Flow
Antigua & Barbuda held a monopoly on international services until June 2012.

The fixed-line density rate is 23.5 percent.

Antigua and Barbuda has a mobile density rate of 180.4
percent, and there are three
mobile carriers operating on the islands providing service over wireless networks:
Flow, Digicel, and the Antigua Public Utilities Authority (APUA). Individual
carrier data is not available.
Flow and Digicel both offer 4G
service. LIME's network covers 100 percent of the country, making it one of
the best connected nations in the Caribbean.

Antigua and
Barbuda has a broadband density rate of 8.8 percent and 79.5 percent of the
country uses the Internet.

Aruba. Aruba is a Dutch territory located in
the Caribbean Sea just off the coast of Venezuela. After a lengthy period as a
monopoly, the telecommunications market is finally open to competition,
although SETAR, the former monopoly, still provides virtually all fixed-line
telephone services. Thirty four percent of the population has a landline
connection on the island.

Aruba has an advanced telecommunications infrastructure. The country's
network uses digital microwave technology and fiber-optic cabling, while its
international communications needs are serviced by two satellite earth
stations and a direct connection to the Pan American Submarine Cable System.

Aruba has 141,000 mobile customers, which puts the density
rate at 136 percent. There are three
wireless carriers operating in Aruba, which was the first country in the
Caribbean to get 3G mobile services. SETAR provides service over the UMTS,
HSDPA, and LTE standards, . Digicel uses GSM and LTE, while MIO uses CDMA and
LTE.

The Internet market is open to competition, but SETAR is the dominant ISP.
According to the most recently available data from the International
Telecommunications Union, the broadband penetration rate is 18 percent and
94.6 percent of the population accesses the Internet.

Bahamas. Located in the Atlantic Ocean, the
Bahamas is an independent nation made up of 700 islands. The
telecommunications market is a monopoly run by Bahamas Telecommunications
Company (BTC or BaTelCo), a state-run company. The Bahamian government has
tried several times since 2003 to sell a large stake in BTC in efforts to
privatize the company. Those plans fell through several times until, in
December 2010, the government agreed to sell 51 percent of the company to
Cable & Wireless for $210 million. As a concession of the deal, BTC had its
monopoly over the mobile sector extended to April 2014. When that monopoly
expired, the government convened a panel to look into liberalizing the
landline market. The government also fined the company in late 2014 for
failing to play nicely with competitors. The landline density rate is 28.8
percent.

There were 353,540 mobile customers in the Bahamas at the end of 2017, which translates
to a penetration rate of 89.4 percent. BTC is the only mobile provider. It
offers service over GSM, EDGE, and HSDPA technologies, and 4G
services were
launched in 2014. LTE service is now available nationwide. The government
issued a second mobile license to Cable Bahamas Limited (CBL) in October
2015.

The Internet sector has made remarkable strides over the last few years. The
country has 86,868 broadband subscribers, for an adoption rate of 21.9
percent.

Barbados. Barbados is an independent
national located in the Lesser Antilles islands of the Caribbean basin. The
market is fully liberalized, but LIME Barbados, the incumbent, is the dominant
provider. The government has issued licenses to other carriers, but none of
them have started providing service. A company called SRG offers VoIP service
and is really the only competitor in the fixed-line market. Despite
limited competition, the landline density rate is 42.2 percent, which is one
of the highest in the region.

The mobile
market has been open to competition since 2004 and there are currently three
companies providing service: Flow, Digicel, and Sunbeach Communications. Overall, Barbados has a mobile density rate of
113.5 percent.

Barbados has a
high broadband Internet penetration rate of about 24.2 percent. In 2014, BTC introduced a fiber-to-the-home service
that operates at 1G bps, which is three times faster than any other
broadband service. Just under 80 percent of the population uses the
Internet.

Bermuda. Bermuda is one of the richest countries in the
world and a popular offshore financial center. Bermuda deregulated its
telecoms market in 1996 and took advantage of the subsequent Internet and
communications explosion to position itself as a global hub for e-commerce.
As a result, the country has an advanced communications infrastructure, with
multiple T-1 lines, microwave technologies, and fiber-optic cabling. Flow is
the leading fixed-line player, and the landline density rate is 35.7 percent.

According to the ITU, Bermuda has
a mobile penetration rate of 105.9 percent, and there are two carriers
competing in the market: Cellular One and Digicel. Both companies offer 4G
service.

The country’s
telecommunications policy requires Internet service providers to be at least
60 percent owned and managed by a domestic entity. According to the ITU, 98
percent of the population uses the Internet and 37.2 percent has broadband
Internet connections, which is very high. Bermuda's broadband sector got a
major boost in September 2008, when BTC and several partners completed a
1200-km submarine cable called Challenger. Challenger connects Bermuda with
the continental United States and can provide up to 320G bps speeds.

British Virgin
Islands. The British Virgin Islands are
made up of 50 islands. The telecommunications market was deregulated in 2007,
but Flow is still the only fixed-line provider offering service. The company
operates 10,004 local access lines on 19 of the islands. 

The mobile sector was also deregulated in 2007, and the mobile density rate
is now 146
percent, which is second highest in the Caribbean. There are three companies
licensed to provide service: CCT (the former monopoly), Flow, and Digcell. The government auctioned off 4G licenses in October 2015
but had to redo the auction after CCT sued for being excluded from the
auction. All carriers now provide 4G services.

There are 5,524 broadband subscribers, which puts the density rate at 17.7 percent.

Cayman Islands. The Cayman Islands have some
of the highest living standards in the region. The market was gradually
liberalized in 2003 and 2004, although Flow Cayman Islands is the former
monopoly service provider and the largest telecom operator, providing domestic
and international fixed and mobile voice and data services, VoIP, and IP
services to residential and business customers. TeleCayman, a sister company
of TeleBermuda, was the first alternative provider to launch fixed-line
services in December 2004. The landline density rate is now 56.5 percent.

The Cayman Islands have a mobile density rate of 157
percent, and like many
countries in the Caribbean basin, Flow and Digicel are the two mobile
providers. Both carriers launched 4G service in
December 2013. Flow's network covers 100 percent of the country.

There are about 31,232 broadband subscribers, a 50.7 percent density rate,
the highest in the region.
Flow rolled out a nationwide FTTH network in March 2015 that offers speeds
in excess of 100M bps.

Cuba. Cuba is home to over 11.4 million
people, making it the most populated nation in the Caribbean. At the same
time, Cuba ranks nearer the bottom in terms of penetration rates for fixed-line
services, mobile calling, and Internet access. The Cuban communications market
is a complete monopoly, which as hampered any development in the sector. The
market is dominated by a monopoly provider called Empresa de
Telecomunicaciones de Cuba (ETECSA), and under 12 percent of the population has
a landline telephone.

ETECSA, which is owned by the Cuban government (73 percent) and Telecom
Italia (27 percent) has done little to improve the country's poor
infrastructure, and the Cuban government has done little to promote growth
in this area. The Cuban Communist government has stifled the telecom market
by imposing access restrictions and severe penalties. 

Cuba has an abysmal wireless penetration rate of just 40.2 percent, which is one of the
lowest in the world. Up until 2008, government officials and foreign
nationals were the only people allowed to even own mobile phones. Although
those restrictions have been lifted, wireless services are still very
expensive, so they have not been able to gain traction and help bring basic
communications service to the people like they have in so many other
undeveloped countries. Cubacel is the only mobile company operating in the area, and it is
owned by ETECSA. ETECSA is attempting to improve the number of people
using mobile phones by setting up a series of public areas where people can go
and use telephones.

Cuba also has one of the worst broadband rates in the region because
residential Internet connections had long been illegal to everyone except government
officials and employees of international companies. As a result, there are just
33,526 high-speed subscribers, which puts
the rate at 0.29 percent. About 40.3 percent of the population uses the
Internet, so the
majority of people access the Internet through cybercafes. The Cuban
government attempted to boost the adoption of email and basic Internet
service by installing public computers in the country's post offices.

Another problem with Cuba's Internet sector is the cost. Public Wi-Fi access
cost $4.50 an hour until the government reduced it to $2.00 per hour in June
2015. Even then, the service is still too expensive for many Cubans since the
per-capita GDP is only about $7,600.

In October 2016, the government said ETECSA started a pilot program of
residential broadband connections to 2,000 people in parts of Old Havana, this
has since been expanded, allowing for very slow growth in subscriber figures for
urban centers.

Dominica. Located in the Lesser
Antilles, the Commonwealth of Dominica is an independent nation. The
country’s two fixed-line providers Flow Dominica, which is 20 percent owned
by the Dominica government, and Marpin Telecoms & Broadcasting. Together, they
provide landline service to the 17.5 percent of the population.

Dominica has
a wireless density rate of 101.8 percent, and Digicel and Flow are the two service providers.

According to the latest information from the ITU, Dominica has 15,423
broadband subscribers for a penetration rate of 20.86 percent.

Dominican
Republic. The Dominican Republic is
experiencing a booming tourism industry, and the telecommunications sector is
one of the faster-growing parts of the economy. The country’s telecom market
is liberalized, and unlike many other countries in the region, there is actual
competition, and the infrastructure has improved greatly in the last decade. The leading fixed-line provider is CODETEL, the former monopoly
provider that got its start as a division of GTE and is now owned by America Movil. Wind Telecom is also present there.
12.3 percent of the
population has a landline connection.

The Dominican
Republic has a healthy and competitive wireless sector. At the end of 2017,
there were 8.76 million mobile customers on the island, a penetration rate of
81.4 percent. There are four companies providing service in the Dominican
Republic: Claro, Orange, Viva, and Tricom.. In April 2014, Altice Group acquired Orange for
$231 million, and in 2016, it said it would invest $429 million over three
years to upgrade its network.

The Dominican
Republic has a quickly growing Internet sector. There are now almost 817,000
broadband subscribers, a penetration rate of 7.6 percent. In January 2014, the
government announced plans to invest almost $62 million in building out
national fiber-optic network.

Grenada. The tiny island of Grenada is the second-smallest
independent nation in the Western Hemisphere, comprising the island of Grenada
as well as a few smaller islands in the Grenadines. The country's
telecommunications market is open to competition, but Flow Grenada is the
leading provider of all telecom services. The company, which got its start as
the Grenada Telephone Company, is the former state-owned monopoly, and the local
government still retains a 30 percent stake.30.1 percent has a landline
telephone connection.

Grenada has a wireless density rate of 104.9 percent, and there are two
mobile providers competing for customers: Flow and Digicel.

Regarding the Internet sector, 63.9 percent of the population is online and
20.6 percent have broadband subscriptions.

Guadeloupe. Guadeloupe is an archipelago of islands,
including the French part of Saint Martin, that is governed as an overseas
territory of France. There are three main fixed-line carriers operating on
the islands: Orange, Flow, and Outremer Telecom.

Guadeloupe's three wireless carriers are Orange, Digicel, and SFR,
which is owned by Altice.

Market statistics are not available.

Haiti. Haiti is the poorest nation in the Western
Hemisphere, and the telecommunications market has been further damaged by
the massive earthquake. The fixed-line penetration rate is just 0.1 percent.

The Haitian
market is still led by a monopoly provider called Netcom, and growth in this
sector has been stifled by years of political instability. In 2011, the
government took a first step toward improve the quality of service in the
country by selling part of the company, then called Teleco, to Viettel, a
Vietnamese company.

The mobile sector has been privatized since 1999 and growth the market is
remarkably competitive compared to other parts of the industry. There are
more than 6.3 million mobile customers in Haiti, which puts the penetration
rate at 57.4 percent.
There are three companies providing service there: Digicel, Comcel, and NATCOM, which is
40-percent owned by the Haitian government. There used to be a fourth company
called Haitel, but its network was shut down in April 2013 because it
struggled financially.

The broadband sector is very poor. The ITU reports that only 18 percent of
the country goes online. There are 29,900 broadband connections. However,
this represents just 0.27 percent of the population.

Jamaica. The Jamaican telecommunications market
has been liberalized since 2003, and according to the Ministry of Mining and
Telecommunications, there are 50 companies licensed to provide domestic voice
services. The former monopoly, Flow, remains the dominant provider.

Only 10.3 percent of the population has a landline phone.

Jamaica has
about 3.09 million mobile customers, which puts the wireless teledensity
around 107 percent. There are two companies operating on the island (Digitcel and Flow)
and the government awarded a license to a third company named Caricel in
September 2016. Fourth-generation
services were introduced in 2014.

Jamaica has about 239,000 broadband subscribers, which is an 8.3 percent
density.

Martinique.

Martinique
is located in the Eastern Caribbean and is an overseas territory of France.
The country has three fixed-line operators: Orange, Flow, and Outremer
Telecom.

The people of Martinique have three wireless carriers to choose from: Orange, Digicel, and Only.

Market statistics are not available.

Netherlands
Antilles. The Netherlands Antilles formerly
called the Dutch West Indies is a group of five islands: Bonaire, Curaco, Saba,
Sint Eustatius, and the Dutch side of Sint Maarten. The countries are governed
as part of the Dutch government. The leading telecommunications carrier is
United Telecommunications Services (UTS). The market is open to limited
competition, but UTS still dominates the industry.

There are four
wireless carriers operating on the islands: UTS Wireless Curacao, Digicel,
Telcell, and East Caribbean Cellular.

Market statistics are not available.

Puerto Rico. In 1952, the US Congress gave Puerto Rico
free-associated-state status, which allowed Puerto Rico 's local government its
own constitution while remaining within US federal law, which covers many areas,
including telecommunications. Therefore, the US Federal Communications
Commission has had authority over Puerto Rico 's telecom market, radio, and TV
since then, and the industry has been booming.

Although Puerto Rico is a US territory, the
fixed-line market has a lower penetration rate than the mainland. According
to the most recent information published by the International Telecommunications
Union, the fixed-line penetration rate is just 21.4 percent. Puerto Rico has historically had a poorer infrastructure
because of the island's economic conditions and the fact that the market has
been dominated for years by Puerto Rico Telephone Company, which provides
service under the Claro brand name. This was further worsened during the 2017
hurricane season, when much of the islands terrestrial telecom infrastructure
was destroyed.

The mobile sector is by far the most competitive part of
Puerto Rico
's telecommunications industry. At the end of
2017, there were almost 3.4 million wireless customers in
Puerto Rico, which puts the penetration rate at 92.5 percent,
and 4G services are readily available. There are six companies operating on the
island, including the four major US companies: AT&T Mobility, Claro, T-Mobile,
Open Mobile, Choice Communications, and Sprint.

Puerto Rico trails the mainland United States when it comes to Internet
subscriptions, but the government is working hard to grow this part of the
market. According to the most recently available information from the ITU, just
over 83 percent of the population uses the Internet and
there are 660,100 broadband subscribers (about 18 percent of the population).

St. Kitts &
Nevis. St. Kitts and Nevis is the smallest
nation in the Western Hemisphere in terms of size and population, a two-island
country located in the West Indies. The leading provider is Flow St. Kitts and
Nevis, operates 17,293 local access lines, which connect into the Eastern
Caribbean Fiber-Optic System. In September 2007, the government sold its 17
percent stake in the company back to Flow, completely privatizing it.

The islands have a mobile density of 138.9 percent, and there are three
mobile operators on the islands: Flow, Digicel, and Chippie.

There are 16,000 broadband subscribers, which puts the penetration rate at
28.9 percent, which is high for the region.

St. Lucia. St. Lucia is an independent nation located in the
Lesser Antilles. The country's telecommunications market was deregulated in
2001, ending a monopoly held by Flow. The local government has issued over a
dozen fixed-line licenses, but most of these carriers have not launched service
and the incumbent still holds most of the market.

Like several
other countries in the region, the two mobile operators are Digicel and Flow.
The island has 176,694 mobile customers and a density rate of 98.8 percent.

St. Lucia has a broadband density rate of 17.8 percent and 79.6 percent of the
population is online.

St.
Vincent/Grenadines. Located in the Lesser Antilles, this area comprises
32 islands, all forming one independent nation. The telecommunications market is
fully deregulated, but, like so many other countries in the region, Flow is the
former monopoly and the dominant player.

Flow and Digicel provide service to the islands’ mobile customers. There are 115,844
subscribers, for a density of 105.4 percent.

St. Vincent and
the Grenadines has 24,175 broadband customers, which puts the penetration rate at
22 percent.

Trinidad &
Tobago. Trinidad and Tobago is an island archipelago made up of two
main islands and 21 smaller ones. Telecommunications Services of Trinidad &
Tobago (TSTT) is a joint venture by the government and Flow. It is the exclusive
provider of local and long distance services.

Trinidad and Tobago has 2 million mobile customers, and there are two carriers operating
there. bMobile and Digicel.

There are
326,776 broadband users in Trinidad and Tobago, which comes to about 23.9 percent
of the population. 73.1 percent of the population uses the Internet.

Turks &
Caicos. Turks & Caicos a British overseas
territory comprising two groups of islands in the West Indies. The market was
opened to competition in 2006, when Flow Turks & Caicos agreed to end its
monopoly over the industry six years ahead of schedule.

Digicel and Flow are the two mobile companies operating in Turks & Caicos.
Both of them launched 4G in 2015.

Market statistics are not available.

Market Leaders

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Central
America

Two companies have emerged as very strong regional players in Central
America.

America Movil. America Movil is the largest mobile
operator in Latin America and the fourth largest wireless carrier in the
world, servicing approximately 289.4 million customers. The company operates
in the Dominican Republic, El Salvador, Guatemala, Honduras, Jamaica,
Nicaragua, Panama, Puerto Rico, and elsewhere. In addition to its mobile
assets, the company operates approximately 26 million fixed-lines in Central
America and the Caribbean. It is owned by Carlos Slim, one of the richest
men in the world.

Telefonica. Telefonica is the former monopoly
service provider of Spain and one of the largest telecommunications companies
in the world. Its wireless division, movistar, is the fifth largest wireless
carrier in the world, with nearly 343 million customers around the globe.
Relative to the scope of this report, Telefonica has a presence in Costa Rica,
Dominican Republic, Guatemala, Panama, Puerto Rico, and elsewhere.

The following table lists the regulators and major telecom providers in
each Central American country.

Caribbean

The following companies are leading players in the Caribbean
telecommunications market.

Cable & Wireless.

Cable & Wireless has been a strong player in the region for years, and it became
even stronger in March 2015 when it acquired Columbus International, a
telecommunications company with 700,000 customers across the Caribbean and
Central America, for $1.85 billion. When the merger was complete, Cable &
Wireless announced plans to invest $1.5 billion to upgrade its networks and
services across the region. The new company also decided to rebrand most of its
operations under Columbus International's Flow brand.

Regardless of what it calls itself, it is one of the largest telecommunications
carriers in the region. It was the monopoly service provider in 15 former British
colonies in the region.

Despite its cooperation, however, Cable & Wireless retains a virtual monopoly
throughout the region in most services. It is also often resented as a
"colonial" entity, a factor which has worked in favor of its biggest regional
competitor, Digicel.

In the Caribbean, the company has a presence in Anguilla,
Antigua & Barbuda, the Bahamas, Barbados, British Virgin Islands, Cayman
Islands, Dominica, Grenada, Jamaica, Montserrat, Panama, St. Kitts & Nevis, St.
Lucia, St. Vincent & the Grenadines, and Turks & Caicos. Overall, it has
invested heavily in these countries, particularly in the mobile and Internet
sectors. It also operates in Panama.
In 2016, the company awarded a three-year contract to Ericsson to upgrade and
maintain its mobile networks across the North Caribbean.

In November 2015, Liberty Global agreed to buy Cable & Wireless for $5.3
billion. This move was not much of a surprise since John Malone, the owner of
Liberty Global, was a major shareholder in Columbus International and owned 13
percent of Cable & Wireless after it bought Columbus.

Digicel. Digicel is the fastest-growing wireless carrier in
the Caribbean basin. It provides service to about 13 million countries through
the Caribbean basin, South America, Central America, and the Pacific. Within the
Caribbean, Digicel provides service in Anguilla, Antigua and Barbuda, Aruba,
Barbados, Bermuda, the British Virgin Islands, the Cayman Islands, Dominica,
Grenada, Guadeloupe, Haiti, Jamaica, Martinique, the Netherlands Antilles, St.
Kitts & Nevis, St. Lucia, St. Vincent, Trinidad & Tobago, and Turks
& Cacos. In Latin America, the company operates in El Salvador, Honduras,
and Panama.

The following chart shows
the regulatory agencies and leading players in the Caribbean.

Market Trends

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After
several years of continued economic hardship, Central America and the
Caribbean
are starting to bounce back. Telecommunications, particularly wireless
technologies, are playing a critical role in economic growth. The mobile density
rate is higher than the landline rate in every country in these two regions.

Broadband
is also growing at an impressive rate, although the poor economic conditions in
some countries, like
Haiti
and Cuba, has stifled growth. Growth
remains at a high apparent rate largely because it springs from nothing.
Subscriber numbers remain tiny, but there is potential for further growth and
services. More and more countries are starting to install FTTH service and even Cuba
has begun letting citizens have their own Internet subscriptions for the first
time in its history.

The
fixed-line sector continues to see slow growth and even stagnation in some
places. Infrastructure is still poor in many rural areas, and most of the
countries either are still a monopoly or a virtual monopoly. Further
complicating matters is the general consumer shift from fixed-line to mobile
phones.

Investment in the region is coming from a handful of international companies
that have a presence there, including America Movil, Telefonica, Cable &
Wireless, Altice, and Digicel. These companies are upgrading their remaining 3G networks to
4G and are introducing faster broadband connections.

Strategic
Planning Implications

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Overall, further progress in the telecommunications sector of the Central American and
the Caribbean regions hinges on private sector investment. The establishment of
proper regulatory frameworks by governments for fixed-line and broadband
services will help spur this investment by guaranteeing competitive environments
and avoiding crossed subsidies by the incumbents. With increased private sector
investment will come lower consumer costs and a much improved telecommunications
infrastructure, which will open the door to expand trade from mainly the
agricultural sector to the financial and call center sectors as well.

One
nation that has shown leadership in terms of building a solid regulatory
framework to encourage private investment is the small island nation of Bermuda.
Bermuda’s regulation has been dubbed managed competition because it
limits telecom licenses to a specific market segment and prohibits resellers by
making all providers invest in infrastructure in order to offer their service.
As a result, new service offerings are deployed and liberalized more quickly in
this market than any others in all of Latin America. It should be noted,
however, that the restriction of resellers does violate the WTO specifications
regarding the opening of telecoms markets, but the results are speaking for
themselves.

While
there appears to be some positive signs of growth in the region, telecom is
still behind most nations in North America, Europe, and Asia. In many cased
Central American and Caribbean infrastructure is even less developed than that
of South American countries. Telecoms that have invested in the region have
found that the communications boom that was predicted has not occurred. It
cannot be said that it will not occur but the future is hazy at best.

Companies doing business or looking to do
business in these regions should be ready to concentrate their investment in
telecom equipment in the wireless arena, even satellite. It is expected that
wireless will continue to out-perform wireline infrastructure in growth. It is
also possible that wireline equipment will deteriorate as the countries look to
wireless to improve teledensity throughout the area, including in the rural
markets.

Web Links

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Regulatory Agencies

• ARCEP: http://www.arcep.fr/
• ASEP: http://www.asep.gob.pa/
• Barbados Telecommunications Unit: http://www.telecoms.gov.bb/
• Belize Public Utilities Commission (PUC): http://www.puc.bz/
• Bermuda Ministry of Telecommunications and E-Commerce:
  http://www.mtec.bm/
• British Virgin Islands Ministry of Communications and Works:
  http://www.bvi.org.uk/government/ministries/communicationsandworks/
• Broadcasting Corporation of Jamaica (BCJ):
  http://www.broadcastingcommission.org/
• Comision Nacional deTelecomunicaciones (CONATEL): http://www.conatel.gob.hn/
• Conseil National des Telecommunications (CONATEL): http://conatel.gouv.ht/home/index.php/
• Cuba Ministerio de la Informatica y las Comunicaciones: http://www.mincom.gob.cu/?q=node/353/
• Eastern Caribbean Telecommunications Authority (ECTEL): http://www.ectel.int/
• Federal Communications Commission: http://www.fcc.gov/
• Instituto Dominicano de las Telecomunicaciones (Indotel): http://www.indotel.gob.do/
• National Telecommunications Regulatory Commission of Saint Kitts and Nevis: http://www.ntrc.kn/
• National Telecommunications Regulatory Commission of Saint Lucia: http://www.ntrc.org.lc/
• National Telecommunications Regulatory Commission of Saint Vincent and the Grenadines: http://www.ntrcsvg.com/
• Netherlands Radiocommunications Agency: http://www.agentschaptelecom.nl/radiocommunications-agency
• Public Utilities Commission of Anguilla: http://www.pucanguilla.org/
• Superintendencia de Telecomunicaciones: http://www.supertel.gob.ec/
• Superintendencia General de Electricidad y Telecomunicaciones: http://www.siget.gob.sv/
• SUTEL: http://www.sutel.go.cr/
• TELCOR: http://www.telcor.gov.ni/
• Telecommunications Authority of Trinidad and Tobago: http://tatt.org.tt/
• Telecommunications Commission (TCITC): http://www.telecommission.tc/
• Telecommunications Division of the Government of Anguilla: http://telecom.gov.ag/
• Utilities Regulation and Competition Authority (URCA): http://www.urcabahamas.bs/

Telecom Carriers

• Antigua and Barbuda Public Utilities Authority (APUA): http://www.apua.ag/Telephone/index.htm/
• AT&T: http://www.att.com/
• Bahamas Telecommunications Company: http://www.btcbahamas.com/
• bMobile: http://tstt.co.tt/
• Belize Telemedia (BTL): http://www.belizetelemedia.net/
• Cable & Wireless: http://www.cwc.com/
• CCT: http://www.cctbvi.com/about-us/
• Cellular One Bermuda: http://www.cellone.bm/
• Chippies: https://www.uts.cw/chippie/
• Claro: http://www.claro.com/
• CODETEL: http://www.claro.com.do/portal/do/sc/personas/
• Columbus Communications: http://www.columbuscommunications.com/
• Comcel: http://www.claro.com.co/portal/co/pc/personas/
• Cubacel: http://www.etecsa.cu/
• Digicel: http://www.digicelgroup.com/
• ETECSA: http://www.etecsa.cu/
• ICE: http://www.groupoice.cr/
• Infonet: http://www.infonet.com.gt/
• movistar: http://www.movistar.com/
• Open Mobile: http://www.openmobilepr.com/
• Orange: http://www.orange.com/
• Outremer Telecom: http://www.outremer-telecom.fr/
• RED: http://www.intelefon.com.sv/
• SETAR: http://setar.aw/
• Smart: http://www.smart-bz.com/
• Sprint: http://www.sprint.com/
• Sunbeach Communications: http://www.sunbeach.net/home/
• T-Mobile: http://www.t-mobile.com/
• Telcell: http://www.telcel.com/portal/home.do
• Telefonica: http://www.telefonica.com/
• Tigo: http://www.tigo.com.sv/
• UTS Wireless Curaco: https://www.uts.cw/

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