Business

'Full mobile penetration by 2016'

Friday, June 06, 2014    

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TELECOMMUNICATIONS provider LIME aims to get the entire population using Internet on their mobile phone within two years.

That would require well over a million new users and a similar number of web-enabled phones to be sold into the market by 2016.

Mobile data subscribers totalled 780,000 towards the end of 2013, according to the Planning Institute of Jamaica.

LIME's target is much loftier than a more conservative projection made last month by rival Digicel, which expects half the population to get online by year-end.

Still that would put the total number of mobile data subscribers at 1.4 million. In other words, the larger of the two telecoms expects data subscription growth 80 per cent this year.

Higher penetration would allow both providers to earn greater income from data in a market characterised by an over 66 per cent slash in voice call rates in 12 months.

"LIME targets 100 per cent Internet penetration," said LIME in a recent press release on its phone price drops. "Smartphones for all by 2016."

LIME recently dropped the cost on its phones ahead of the Government's removal of the 20 per cent Common External Tariff (CET) on smartphones effective July 1 this year.

"Reducing the import cost on smartphones in order to create ease of access by more Jamaicans who, increasingly, rely on the technology to communicate and do business, is an important step towards increasing national productivity and bringing Jamaica's Internet connectivity rate in line with first world countries,"said LIME's Head of Retail, Stephen Price.

Telecommunications players have committed investments at over $14 billion in mobile infrastructure in anticipation of increased demand from consumers.

Digicel announced that it recently completed "a massive expansion project" on its 4G mobile network, increasing its footprint to 92 per cent population coverage across Jamaica.

These investments come to consumers in cheaper plans, about $50 a day for net surfing, and also cheaper smartphones.

Digicel said that some 200,000 new mobile subscribers jumped on to its network over the last quarter and that it sold 90,000 smartphones carrying its own brand.

The larger carrier has some two million subscribers, while LIME's mobile subscriber base in Jamaica stood at 705,000 at the end of March.

As a result, LIME's mobile service revenue grew by US$7 million or 12 per cent and was 28 per cent higher on a constant currency basis," according to the annual report by LIME's parent company C&W Communications.

Growth in the number of fixed-line broadband subscribers, which stands at roughly 120,000, hardly resembled that of mobile data.

But the shift to mobile Internet is expected to result in increased usage of third-party devices, mostly based in the US, which allow free calls and communication including Skype, LINE, Whatsapp, Yahoo Messenger, Facebook and so on.

LIME previously told the Observer that it expects this shift to earn it greater revenues. While Digicel remained less optimistic.

In March, both providers told the Jamaica Observer that they would allow the pending release of the voice call feature on WhatsApp's messenger service on their networks.

The service would allow an unprecedented number of Jamaican mobile users to make free calls outside a mobile provider's network.

The cell providers cannot block the service on Wi-Fi networks, but can by interference regulate the service inactive once it goes over their respective networks.

The Office of Utilities Regulation, in its latest Quarterly Report for Telecommunications Sector Entities, indicate that smartphones aided the 165 per cent rise in mobile data revenue to $1.19 billion in the first quarter 2011 over year-earlier levels.

The regulator discloses dated statistics ostensibly to protect competition. However, the rise occurred during a period of flattening revenue, earned via voice calls at $5 billion year-on-year. Voice calls, however, still account for the major part of total mobile revenues at some $7.1 billion for the quarter.

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