Investor's Guide: Infrastructure - Telecommunication

St. Kitts boast one of the most technologically advanced telecommunications system in the world. Currently, there are 22,000 fully digital telecom lines serving the island, which is linked to the Eastern Caribbean Fiber Optic System (ECFS). In 2000, the telecommunication facilities were upgraded to MMP 13 offering services in International Direct Dialing, ADSL, Frame Relay, Direct Connect, International Private Circuits, Mobile Roaming, Managed Router Service (MRS), among others.

There has been tremendous growth in the telecommunications industry since the Telecommunications Act of 2000 provided the legal framework for the liberalization of the sector by revoking the rights previously given to Cable and Wireless to be the monopoly provider of telecommunications services in the Eastern Caribbean Telecommunication (ECTEL) group. While Cable and Wireless remains the de factor fixed line service provider, there has been robust activity in the mobile market where Cable and Wireless, Digicel and UTS-CariGlobe maintains an intensely competitive market place. In the Internet market, Cable and Wireless and The Cable both provide high speed internet access. The demand for high speed internet access is favorable with broadband services accounting for 91 % of subscribers.

VoIP service was introduced in 2005, and since then has been growing steadily. The rate for VoIP (in ECTEL member states) from a fixed line is approximately 50 Cents, 50 to 85 Cents from a mobile phone, while the rates to mobile phone range from 85 Cents to $1.00.  The rates for calls to the United States and The United Kingdom range from $1.30 to $1.39.

The rates for SMS text messaging range from approximately 9 to 20 Cents while International SMS text messaging is approximately 40 cents. The obvious beneficiary of the increased competitiveness in the marketplace is the customer, where prices for telecommunication services have dropped significantly. After the ECTEL agreement, the cost of fixed line calls to regional territories dropped 77 % (2002), while fixed line calls to The United States dropped 50 %. These significant cost cuts by were realized through a Price Cap Plan by Cable and Wireless at the behest of the ECTEL group.

The rates for mobile services are not regulated by ECTEL; instead, they are set by competitive market forces. The emergence of two (2) new mobile service providers in the market place (Digicel and UTS-CariGlobe) triggered a 70 % drop (2002) in the cost of mobile calls to the United States. There are currently approximately 64,346 mobile telephone subscribers representing a penetration mark of 128.7 %; the highest penetration mark in the ECTEL group. Prepaid subscribers account for 92 % of all mobile telephone subscribers. Rates for On-Net calls are approximately 0.50 to 0.65 Cents per minute, while rates for mobile calls between networks are approximately 0.89 Cents per minute and mobile to fixed line calls are approximately 0.85 Cents per minute. The liberalization of the telecommunications sector has also led to the entrance of a new internet services provider (The Cable Company). This resulted in a 35 % drop in the cost of ADSL internet service and a 135 % increase in internet subscribers in 2003.

ECTEL Country Report 2007 – St. Kitts
Activity in the telecommunications sector continued to be fuelled by robust competition in the mobile market and efforts to expand Internet services penetration and in particular broadband deployment. Mobile phone subscription continues to increase as consumers today demand the convenience and affordability of mobile phone services. The number of active mobile subscribers outnumbered the number of fixed lines in service by 3.1 to 1 at the end of March 2007. Mobile penetration, which surpassed 100 per cent last period increased a further 25 percentage points to 128.7 per cent.
St. Kitts and Nevis has the highest Internet service penetration in the ECTEL Member
States and Internet services penetration edged up 1.2 percentage points to 18.8 per cent from 17.6 per cent a year earlier.