Ubiquity Broadband Service in Small Island Developing States

Abstract

Small Islands Developing States (SIDS) and territories face risks of natural disasters, climate change and are economic shocks. Markets are small and monopolistic or oligopolistic, with few realistic possibilities of further entry. There is insufficient competition to drive prices down to affordable levels. Without an undersea cable they must use expensive satellite services; with one they have a competitive bottleneck. Servicing outlying islands adds additional expense. Operational costs are high; sometimes partially offset by spending by tourists and migrants. Access networks are predominantly mobile; migrating from GSM to LTE. Markets can extend coverage and inclusiveness through increased competition, targeted regulation and selective state aid. The challenges are to ensure the availability of affordable services and inclusion of the poorest and the disabled through cost-effective interventions that do not further distort markets.

Keywords: SIDS, universal service, telecommunications, wireless, islands

JEL Classification: K20, L96, N4, O1, R38