Economic Update

Published 18 Sep 2016

Government initiatives in Trinidad and Tobago’s telecoms sector aim to strengthen the market by bringing new players into the mobile segment and creating plans to develop broadband infrastructure.

In late August the country’s regulator, the Telecommunications Authority of T&T (TATT), renewed its commitment to award a mobile licence to an undisclosed third operator and issue two 4G LTE licences as part of a broader initiative to offer faster mobile connectivity.

The 4G LTE licences have already been shortlisted for the two mobile operators in the country – Bermuda-based Digicel and bmobile, which is owned by the majority state-owned telecoms company Telecommunication Services of T&T (TSTT).

Is three a crowd?

In 2014 TATT released a request for proposals (RFPs) for a new mobile operator, with bids to be evaluated according to four main criteria: the speed of the proposed rollout, indicative pricing, coverage of national territory and speed. The new entrant is set to operate using the existing infrastructure of the incumbents. The TATT also called for applicants to bid for two blocks of 700-MHz bandwidth.

The regulator reportedly received three bids for the third licence that satisfied the qualifying criteria, as well as offers from TSTT and Digicel for the 4G spectrum.

In September of that year TATT presented its recommendations for both RFPs, but the decision of who will be recommended as the third operator ultimately rests with the new government, elected in September 2015.

While support for the third licence was strong under the previous administration, some industry leaders have voiced concerns regarding the decision to bring a third operator on board as penetration rates are already among the highest in the region and mobile revenues remain stagnant.

The country’s mobile phone penetration rate increased from 149% in 2014 to 160% last year, according to data from TATT, compared to around 110% in Jamaica in 2015.

Despite high mobile penetration, total revenues from domestic mobile voice services showed a slight decline in recent years. From 2010 to 2013 total revenues grew from TT$1.96bn ($291.9m) to TT$2.32bn ($346.3m), but slipped to TT$1.99bn ($297m) last year, according to the latest data from TATT.

In mid-August Emile Elias, chairman of TSTT, described TATT’s 2014 RFP for a licence as “legally flawed” due to a lack of spectrum available for future market players.

“It’s our position that T&T’s mobile market is already saturated, meaning that there is neither a demand nor a need for a third player,” Ronald Walcott, CEO of TSTT, told OBG. “Also, with only two 4G LTE bands up for grabs, a third player would be left at a disadvantage, and so there is something fundamentally wrong with this spectrum plan.”

Strategic plan

As demand for mobile internet usage has increase, T&T has also witnessed a rise in fixed internet uptake. Last December the country had 279,000 fixed subscriptions, a 12% increase year-on-year, with total revenues from fixed internet services growing by 8% over the same period.

Much of the demand stems from businesses, which, despite comprising roughly 21% of the country’s 279,000 fixed-line contracts as of last December, accounted for more than half of the segment’s TT$740m ($110.4m) in revenues.

In early August TSTT inaugurated a five-year, TT$3.7bn ($551m) strategic plan to build on this growth and further develop the country’s fixed and wireless infrastructure as part of a larger initiative to provide high-speed coverage.

TSTT aims to install a fibre-optic-based system that is expected to serve over 200,000 homes throughout the country.

Under this plan, TSTT plans to increase its international bandwidth five-fold, which will allow it to offer a more varied range of service configurations to its customers.

This could also help the operator boost flagging revenues; TSTT posted a TT$316m ($47.1m) after-tax loss for the fiscal year ending March 31. TSTT aims to achieve more than 20% growth over the next five years, mainly built on gains already made in broadband.

Digicel is also taking steps to improve its infrastructure. In November 2013 the Caribbean telecoms operator launched a TT$100m ($14.9m) investment to improve its 4G backbone, and in May of this year Digicel Play – the firm’s fibre and TV service – announced plans to roll out fibre to much of Trinidad by the end of the year, with full national coverage to be achieved by end-2017.

“We are aiming to roll out affordable fibre optics in over 50% of T&T’s populated areas in 2016 and aggressively increase this penetration in the following year,” Gavin Madera, CEO of Digicel Play, told OBG earlier this year. “In Tobago, which had a high concentration of unconnected households, 90% of the island is already covered by fibre connections.”

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