Barbados Telecoms Sector On Its Way To Liberalisation

Mandy Robinson, Tax-news.com, London

15 February 2001

In a bid to fall into line with a growing liberalised international telecommunications market, Barbados' Industry and International Business Minister, Reginald Farley, introduced a Green Paper reviewing the country's Telecommunications Sector Policy into parliament earlier this week.

In his address to parliament, Mr Farley explained that the telecommunications industry in Barbados 'no longer addresses the issues which are of critical importance to the on-going development of the sector and also by way of the regulation and the administration of the sector being built around a monopoly (not) maximising all the opportunities available.'

The Minister for Business and Industry said that the present policy of setting international telephone rates 'artificially high' to subsidise other services prohibited the development of new businesses, start-up Internet companies and consequently e-commerce. He commented: 'But today, when we have the problem of finding new jobs, when we have the challenge of maximising the opportunities for corporate development, for e-commerce and other forms of business which are heavily dependent on telecommunications services, that is no longer a viable option.'

The Green Paper highlights a study conducted in 1997 by Price Waterhouse which discovered that the domestic network in Barbados incurred a loss of over BD$52m (US$26m) each year. The service for business customers also added to the loss with an average domestic revenue of BD$82 a month - the average cost of providing the service is BD$87 a month.

In the Green Paper the government calls for the telecommunications sector to become liberalised and to introduce a cost-based (metered) pricing method. The paper states: 'If affordable international rates are to be achieved in Barbados, while allowing for continued network expansion and increased accessibility by consumers, it will be necessary for the domestic service to bear its cost, to ensure that it earns a margin to allow for continued investment.'

Plans for the move to a cost-based pricing structure are underway and scheduled to be implemented incrementally, as will the transition to liberalisation, by December next year.

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