Digicel Presses For LTE At 700MHz
Pan-Caribbean operator Digicel is pressing the government of the British Virgin Islands to release spectrum in the 700MHz band for use in a planned 4G network. The operator cites success in gaining access to this band elsewhere in the region and makes much of the fact that, as a major global financial hub, the island nation urgently needs LTE-based mobile broadband services. BMI sees little reason why the Telecommunications Regulatory Commission would be reluctant to allow Digicel to offer 4G; it is therefore curious that the operator feels compelled to call for the speedy release of spectrum.
Digicel launched the Caribbean's first commercial 4G LTE network in Antigua and Barbuda in November 2012, after receiving permission from the local authorities in July to use vacant 700MHz spectrum. Then, in February 2013, Digicel's subsidiary in Turks & Caicos Islands proved successful in a six-month auction process for a nationwide 700MHz spectrum licence; it will deploy an LTE network there with all due speed. The company is al so negotiating with the authori ties in the Cayman Islands regarding access to 700MHz spectrum and clearly feels that the regulator in the British Virgin Islands is moving at a relatively laggardly pace. 700MHz is the ideal band for economically viable coverage of island-based territories as it offers excellent signal propagation via a modest number of transceiver sites, helping to keep rollout costs down.
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While it is true that the TRC in the British Virgin I slands has been slow to comment on the prospects of licensing 4G at 700MHz, Digicel's decision to take pre-emptive action reflects on the potential for high-speed mobile broadband services in this important market. Many foreign companies are domiciled in the Caribbean owing to highly favourable business tax regimes, despite the fact that basic telecommunications infrastructure and services are in scant supply or of relatively low quality.
In the main, Digicel is competing with Lime , the mobile unit of Cable & Wireless ' incumbent telephone companies across the Caribbean and its arrival has helped lower prices and forced increased investment in services and networks. In the British Virgin Islands, just 48,703 mobile subscriptions were registered at the end of 2012, up from 46,597 a year earlier. This equates to a penetration rate of just 15.6% and BMI believes that many of these subscriptions are held by enterprises and visiting business executives. Increased investment in affordable mobile broadband services would therefore be welcomed, particularly given that fixed-line telephony and fixed broadband penetration rates are very low, at 3.9% and 1.9%, respectively.
Digicel will therefore be keen to ensure that it does not miss out on any opportunity to be part of the 4G story in the British Virgin Islands . However, it is extremely unlikely that it would be passed over in favour of another entrant or that spectrum is offered only to Lime. BMI therefore takes the view that Digicel's comments are merely aimed at shaking the regulator out of its apparent lethargy as well as provoking a response that would allow it to determine its investment budget for the current financial year.