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The opening of Trinidad and Tobago’s telecommunications market represents one of the last Caribbean markets to open its sector to competition, leaving the Bahamas as the only other closed market in the region. The entrance of Digicel and a third mobile operator, Laqtel, is likely to take significant market share away from the incumbent, TSTT. Trinidad & Tobago is shaping up to be the next battleground between Irish-owned Digicel and Cable & Wireless, which owns a majority stake in TSTT.
The current situation in Trinidad & Tobago is similar to that of Jamaica in 2001 when Digicel and another minor operator entered a market controlled by Cable & Wireless and severely eroded the incumbent’s market share. While Digicel is unlikely to grab market leadership in less than 2 years as it did in Jamaica, I do expect the challenger’s impact to be significant.
Trinidad & Tobago has the potential for explosive growth. Mobile penetration stands at 40%, which is low considering that Trinidad & Tobago has a relatively high GDP per capita of US$12,000 and an economy benefiting from the rise in global energy prices (it is an exporter of petroleum and natural gas). Liberalization of the market and increased competition will serve to drive penetration. Also, if any difficulties arise with signing interconnection agreements, users may purchase multiple phones creating a situation similar to that of Jamaica where penetration is above 80% despite a GDP of merely US$3500.
The country’s newly-founded telecoms regulator, TATT, has been very active and efficient over its one year tenure and may extend its liberalizing efforts into other segments, including broadcasting. Trinidad & Tobago may turn out to be a small but interesting and dynamic telecoms market.
Contact info@pyr.com with any questions regarding Trinidad & Tobago or the Caribbean telecoms markets.
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