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2006-06-14 06:45:54

High Telecom Costs Retarding Bahamas Advantages

High cost of telecommunications is eroding certain comparative advantages and is negatively affecting the country's two top industries.

In a report that thoroughly analyzes The Bahamas' Information and Communications Technology [ICT], the Inter American Development Bank [IDB] reported that the high cost of telecommunications is eroding certain comparative advantages and is negatively affecting the country's two top industries.

For many businesses, telecommunications is the highest or second highest cost in their overall operating budgets.

"The high cost of telecommunications is also discouraging the export of services for which The Bahamas would otherwise have certain comparative advantages," the report stated.

"For example, one of the reasons conference organizers are reluctant to choose The Bahamas is because of the very expensive prices for making international calls and roaming on The Bahamas' only cellular mobile network."

The report prepared by Peter Stern of PS Associates - reviews in detail the current situation in policy implementation and the establishment of competitive regulatory structures for the sector as well as the basic infrastructure for information and communications technology in the Caribbean region. Special emphasis was placed on The Bahamas, Barbados, Belize, the Dominican Republic, Guyana, Jamaica, the Organization of Eastern Caribbean States, Suriname and Trinidad & Tobago.

Officials are urging the Government of The Bahamas, through public consultation, to develop and adopt a long term policy for the Information and Communication Technology sector.

"The policy should include specific steps (with specific dates) in the continuing process of reforming the telecommunications sector with a view to alleviating the bottlenecks to potential growth which have resulted in stagnation of the ICT sector in The Bahamas and have had a negative impact on tourism, financial service and the development of new sectors," noted the report.

The IDB report also made five specific recommendations about what the policy should entail. Among the recommendations were a commitment to proceed with the privatization of the Bahamas Telecommunications Company [BTC] and an indication that the government is prepared to accept a fair market price for the company; a clear indication of how long the government intends to maintain market entry restrictions in the cellular mobile and voice telephony markets and when the government intends to implement regulatory rules and mechanisms for universal service programme and related funding.

Additionally, there was a suggestion that the policy should entail an outline of when and by how much BTC tariffs should be rebalanced and a process to educate and inform the public on the importance of the ITC sector to the overall economic development of The Bahamas.

In explaining its approval of reduced long distance rates for BTC, the Public Utilities Commission said the new prices would bring benefits to residential and business customers, especially those in the hospitality industry and financial services.

It named specific benefits to the telecommunications sector as bringing the prices more in line with providing the service, making the bypass of BTC's network less attractive, providing the right signal for consumption and investment and stimulating the development of ICT.

On another note, The Bahamas can boast of a certain level of success in making high speed Internet access available to the resident of New Providence, Grand Bahama and Abaco at affordable prices, it was stated.

The IDB report said, however, more needs to be done to deliver access to broadband in the Family Islands for their continued economic growth and development.

The Bahamas has a fixed line penetration rate of about 43 percent, a mobile penetration rate of 64 percent and an Internet access penetration of 13 percent. Also, of the 88,000 households, over 70 percent subscribe to the country's only cable TV network.

By: Tameka Lundy, The Bahama Journal

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