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More cells, but telecoms earn less

Published:Wednesday | March 21, 2012 | 12:00 AM

Steven Jackson, Business Writer

Jamaicans now own more mobile phones - 3.1 million - than there are people in the country.

But for the first time they spent less money on them for the December 2010 quarter than the corresponding period a year earlier, new data from the industry's regulator, the Office of Utilities Regulation (OUR), show. The OUR collects data as part of its remit, but delays its publication arguably to avoid advantaging competitors.

This decline in the cell market actually hid rising revenues of other services, including fixed and Internet broadband services.

For the review period, Jamaicans talked 33 per cent longer on their cellphones totalling 1.78 billion minutes for the December 2010 quarter. But more critical for the bottom lines of the mobile, fixed and Internet service providers was the $11.3 billion, or 16 per cent, decline in revenue for the October to December period, compared to the corresponding three months a year earlier.

On the positive side, fixed call revenues increased 12 per cent to $3.4 billion year-on-year, which the OUR attributed to a more than 7,000 per cent rise in outgoing international minutes, to 1.1 billion during the review period.

However, fixed-call service subscriptions, provided mainly by LIME Jamaica and Flow Jamaica, declined to 283,100 customers, or 6.3 per cent year-on-year. These companies offer services to residential and business customers with access to fixed-to-fixed, fixed-to-mobile and international calls.

Disturbing numbers

Up to press time, the mobile service providers, market leader Digicel - which since the report has acquired the Jamaica operations of a former Claro - and LIME had not responded to questions about the implications of the data on the decline in talk revenues from key sides of their operations.

But the numbers may worry the companies, especially if it signals a new trend in the island's telecoms market that has been on a robust growth path since liberalisation a decade ago.

LIME Jamaica, Digicel Jamaica and Claro Jamaica (prior to its acquisition and subsequent closure) accounted for the bulk of the revenue decline. Combined, their revenues went down 26 per cent, from $9.9 billion to $7.3 billion over the review period.

This income retreat was despite a 7.6 per cent growth in mobile phone subscribers to 3.18 million during the review period. Jamaica's population is estimated at 2.7 million, which would mean mobile phone penetration rate of 117 per cent, or that there were 17 per cent more active mobile phone subscriptions than there were people in the country.

"The increase was attributable mainly to prepaid customers of 3.049 million, representing over 95 per cent of total subscriptions," said the OUR.

Post-paid customer users increased 35 per cent to 133,000.

The growth in the market top-end of smartphones such as the iPhone, Android and BlackBerry instruments aided the doubling of mobile data revenue to $609 million, the OUR figures showed.

In keeping with the broader decline in mobile phone revenue, Jamaicans, on average, paid $340 less per month for on-net calls - or calls made on the same network - during the review period than in the same quarter of 2009. This resulted in a slashing of the average on-net spend to $1,904 from $2,245.

On-net mobile calls generated the majority of revenues - 70.9 per cent - for these providers, the OUR said.

Traditional broadband and dial-up Internet services provided predominantly by Flow Jamaica, LIME, Digicel and Infochannel increased 1.9 per cent to $641 million over the review period. The OUR said Internet data remained difficult to obtain. However, subscriptions declined 33.3 per cent over the review period to some 76,300 subscribers.