The Tribune

By NATARIO MCKENZIE

Tribune Business Reporter

nmckenziel@tribunemedia.net

The Bahamas’ information and communications technology (ICT) sector generated revenues of almost $450 million or 5.7 per cent of the country’s total GDP in 2011, a Utilities Regulation and Competition Authority (URCA) executive said yesterday.

Stephen Bereaux, URCA’s director of public policy and regulations, said ICT had the potential to increase a country’s productivity and drive economic growth.

During a presentation at yesterday’s session of The Bahamas Institute of Chartered Accountants (BICA) accountants’s week seminar, Mr Bereaux said: “In 2011, the regulated portion of this sector generated revenues of almost $450 million, or 5.7 per cent of the total Gross Domestic Product of the Bahamas.

“It did so while employing over 1,350 persons or 0.82 per cent of the country’s workforce. It is also clear that electronic communications can have a wider impact upon the economy, so that increases in take up of ICTs can materially increase a country’s productivity.”

Mr Bereaux said it was of critical importance that the Bahamas “never drops the ball” on electronic communications as a key component in development and nationhood.

“Without electronic communications it would be impossible for the Bahamas to maintain cohesive socioeconomic links throughout the country, or effective central Government,” said Mr Bereaux.

He added that a 2009 World Bank study found that for high-income countries such as the Bahamas, a 10 per cent increase in fixed telephone line penetration could be associated with a 0.43 per cent increase in GDP growth.

A 10 per cent increase in mobile telephone penetration equated to a 0.6 per cent increase in GDP growth, while a 10 per cent increase in Internet services (narrow and broadband) equated to a 0.77 per cent increase in GDP. Most significantly, a 10 per cent increase in broadband Internet penetration could be associated with a 1.21 per cent increase in GDP growth.

“If we look only at broadband growth in the Bahamas, we can imagine the potential of ICTs to drive economic growth,” Mr Bereaux said.

“In 2011, Bahamian GDP experienced a nominal growth rate of 0.2 per cent. URCA’s figures show that during that period broadband Internet penetration in The Bahamas remained static.

“Consider the possibility that if the Bahamas could stimulate broadband penetration to grow by 10 per cent, and properly leverage that growth, could we generate GDP growth of more than 1.5 per cent, without even addressing other growth factors?”

Mr Bereaux noted, however, that the Bahamas has not been generating growth in the use and availability of ICTs.

“There has been an inability to attract high level new investment in the sector, no doubt in part due to international economic conditions, but also perhaps in part due to the continuing legal monopoly in cellular services, which is at odds with developments in most of the comparable countries considered,” he added.

“We need to do more to encourage local and international companies, who have the necessary skills, experience and resources, to devote greater investment to the electronic communications sector in the Bahamas.”

Mr Bereaux added that The Bahamas has two major providers of fixed voice and data services, the Bahamas Telecommunications Company (BTC) and Cable Bahamas (CBL), which both provide landline as well as broadband Internet service.

He added that there are also smaller providers who provide broadband Internet services, and certain wholesale services in parts of the Bahamas.

“These markets are fully open to competition, so there is no barrier to further providers entering any market for fixed voice or data services,” Mr Bereaux said.

“At the end of 2011, there were 36 fixed subscribers for every 100 inhabitants of the Bahamas. From a usage or access perspective, these figures are better than they may seem.

“International practices measure penetration by comparing number of subscribers with total population, but for fixed services such as land line phones, broadband and cable TV, subscriptions are generally shared between members of a household or employees of business.

“The picture is different when this is considered. At the end of 2011 there were approximately 84 residential fixed-line subscriptions for every 100 households. Similarly, at the end of 2011 there were 18 broadband Internet subscribers for every 100 inhabitants of the Bahamaa, which was equivalent to 61 broadband Internet subscriptions for every 100 households.”

Mr Bereaux saidcellular services in The Bahamas remain a monopoly market as BTC benefits from a legal restriction on the authorisation of alternate providers, with the law not permitting any process for the introduction of cellular competition s until April 2014.