This report provides information on Mexico and the Caribbean Countries (Cuba, Dominican Republic, Haiti, Jamaica, Puerto Rico and small island nations). Each country has its own chapter and covers the following subjects.

Key Statistics
Market and Industry Overviews
Regulatory Environment
Major Players (fixed and mobile)
Infrastructure
Mobile Voice and Data Markets
Internet, VoIP
Broadband (DSL, cable, wireless)
Pay TV and Convergence

Executive Summary
The region comprising the Caribbean Sea and its numerous islands is commonly known as the Caribbean. It lies south of the Gulf of Mexico, covering an area of about 2,754,000 sq km. For many years, it was referred to as the West Indies; however, the name Caribbean has been universally adopted since the early 20th century. Varying considerably in size, the Caribbean islands form a wide arc between Florida in the north and Venezuela in the south, as well as a barrier between the Caribbean Sea and the Atlantic Ocean.

Caribbean Countries: These countries include Anguilla, Antigua & Barbuda, Aruba, Bahamas, Barbados, Bermuda, British Virgin Islands, Cayman Islands, Dominica, Grenada, Guadeloupe, Martinique, Montserrat, Netherlands Antilles, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Trinidad & Tobago, Turks & Caicos Islands, and the US Virgin Islands. Despite being relative small markets by global standards, telecommunications has become one of the Caribbean’s major growth industries. Liberalisation agreements have been reached in most countries, and Cable and Wireless, historically the monopoly provider of telephone services in many Caribbean markets, is facing growing competition, especially in the mobile sector, where Mossel-owned Digicel has made a meteoric ascent. From 2001, when it first launched GSM services in Jamaica, it has grown into a pan-regional mobile provider, with operations in over 15 Caribbean nations.

Cuba: Despite strong economic growth in 2006, Cuba still occupies last place in this region for Internet penetration and is second lowest in fixed-line teledensity. The potential demand for international telephony services is high as Cuba has the largest population in the Caribbean. However, in early 2007 supply was still constrained by the US embargo, which has prevented the implementation of submarine fibre-optic cables, as well as by Cuba’s information security laws. Thus Cuba still has to rely almost exclusively on satellites for international connectivity. In addition, Cubans cannot legally buy a computer or subscribe to an ISP without having a government permit. Mobile rates are prohibitive for the vast majority of Cubans. Etecsa, controlled 73% by the government and 27% by Telecom Italia, holds a monopoly in both fixed and, through its subsidiary Cubacel, in mobile services.

Dominican Republic: Telecommunications in the Dominican Republic is one of the fastest growing and most competitive sectors of the economy. Despite a relatively modern telecom system, the Dominican Republic’s fixed-line teledensity lags well behind the Latin American average. In contrast, with about five times more mobile phones than fixed lines, mobile penetration is about average for Latin America. Verizon Dominicana, the dominant provider of fixed-line and mobile telephony, as well as Internet services, was acquired by Mexico’s América Móvil in December 2006, ushering the entry of the largest Latin American telco into the Dominican market. Following the acquisition, in February 2007 Verizon Dominicana’s fixed line business was renamed Codetel, the company’s original name, whilst the mobile business was rebranded Claro. The economic recovery of 2005 and 2006 is encouraging telcos and cable companies to undertake new investments in emerging services such as wireless broadband and VoIP.

Haiti: Fixed-line teledensity in Haiti is the lowest in Latin America. Fixed-line services are provided by state-owned monopoly operator Teleco which is inefficient and poorly managed. In addition, political unrest has severely affected investments in a country where most people have no electricity or running water. In contrast, in May 2006 the Haitian mobile sector received a significant boost when Digicel launched the fourth mobile network. In its first eight months of operation Digicel claimed to have secured over 1 million subscribers, thereby ushering in a new era of mobile competition. Internet access is also open to competition although it remains constrained by low teledensity. WLL and VoIP are in part being used to supplement the shortage of fixed lines.

Jamaica: Jamaican fixed-line teledensity, currently experiencing a downward trend, is one of the lowest in the Caribbean. Despite liberalisation and the award of numerous licences, Cable & Wireless Jamaica continues to dominate the Jamaican fixed-line telecom scene. Mobile telephony, on the other hand, has experienced a remarkable boom since the market was opened to competition, so much so that there are about six mobile phones for every fixed line in service. Approximately 50% of Internet access on the island is via narrowband connection. However, with continually increasing demand and new investment, Jamaica’s broadband market is exhibiting signs of solid growth. Although cable broadband only accounted for around 4% of the Internet market in late 2006, its share is expected to rapidly increase given the relatively high penetration of cable TV in Jamaica. In addition, recent investments in wireless and cable broadband, together with the launch of two new submarine fibre-optic cables, are expected to put downward pressure on broadband access prices and to drive broadband growth during 2007 and 2008.

Mexico: Fixed-line teledensity in Mexico is relatively low at around 18.5%, suggesting significant room for growth. However, strong competition from the mobile sector will continue to constrain traditional fixed line subscriber growth. Indeed growth in fixed lines has been steadily declining for the past seven years with estimates for 2006 suggesting that teledensity actually declined for the first time. Despite liberalisation Teléfonos de Mexico (Telmex) still holds around 92% of fixed lines and Telmex’s sister company América Móvil holds around 77% of the mobile sector through its unit Telcel. Expanding broadband networks are driving growth in Internet usage and subscriber numbers. In particular, Telmex’s ADSL product, Prodigy, recorded very strong growth rates during 2006. The main cable TV providers, Megacable, Cablemás and Cablevisión are also experiencing high growth in cable modem subscribers. Consequently, during 2006 broadband growth drove the number of broadband subscribers ahead of dial-up subscribers for the first time. New technologies such as WiMAX and VoIP are increasing their presence in the market and the market is also witnessing a rapid increase in the number of triple play packages becoming available.

Puerto Rico: Puerto Rico has some of the highest rates of teledensity, mobile penetration, and Internet usage in Latin America. However fixed line telephony has stagnated in a market largely dominated by the incumbent Puerto Rico Telephone Company (PRTC) controlled by Verizon. In contrast the mobile market has been experiencing robust competition and growth, led by Cingular Wireless Puerto Rico, Verizon Wireless Puerto Rico (PRTC) and Centennial de Puerto Rico. In addition, with an emerging VoIP sector, a growing broadband market and a healthy cable TV sector, various convergence strategies and triple play services are being observed. In 2007 both the fixed and mobile sectors will witness the entry of the Latin American giant, América Móvil, through its acquisition of Verizon’s stake in PRTC.

2007 Latin America - Telecoms, Mobile and Broadband in Mexico and the Caribbean