Regulation in the EU and US: should the Caribbean follow suit?

1. 11thAnnual OOCUR Conference 6-8th November, 2013 – Belize Julian Wilkins – Director, Telecoms Public Policy Regulation in the EU and US: should the Caribbean follow suit?

2. Background • Digicel commenced operations in Jamaica in April 2001 • Digicel operates in 31 markets worldwide • 23 in the Caribbean • 6 in the South Pacific • 2 in Central America • Digicel has over 13 million customers worldwide

3. 3 Digicel’s Footprint: Caribbean & Central America TURKS & CAICOS ISLANDS BRITISH VIRGIN ISLANDS PUERTO RICO ANGUILLA CAYMAN ISLANDS BERMUDA BARBUDA ST. MARTIN US VIRGIN ISLANDS DOMINICAN REPUBLIC HAITI ANTIGUA ST. KITTS & NEVIS MONSTERRAT JAMAICA GUADELOUPE CENTRALAMERICA CARIBBEAN SEA DOMINICA BELIZE MARTINIQUE HONDURAS ARUBA ST. LUCIA BONAIRE BARBADOS GUATEMALA ST. VINCENT & THE GRENADINES EL SALVADOR CURACAO NICARAGUA GRENADA FRENCH GUIANA PANAMA COSTA RICA GUYANA TRINIDAD & TOBAGO SURINAME 23 Markets in the Caribbean 2 Markets in Central America

4. Introduction Proposition: the volume of regulation is a key factor in determining whether a particular country is an attractive place to invest in Broadband or ICT services.

5. Introduction (2) Current legislation and regulatory approaches are sometimes ‘copied’ as opposed to being based on EU and US methodologies.

6. Introduction (3) Results: • Failure to adequately reflect huge differences between the Caribbean and EU/US; • Availability of resources, both financial and human; • Many aspects of telecommunications regulation extremely detailed; expensive to develop and implement; • The burden of work imposed on the industry becoming disproportionate and unmanageable and ultimately counter-productive.

7. Bureaucracy • Proposition: Regulators in small economies need to be innovative in their regulatory approach and regulate differently compared with their North American and European counterparts; • In the Caribbean, we have observed a major increase in ‘red tape’ effectively hindering the progress of Broadband implementation as well as in other ICT services; 7

8. Bureaucracy (2) • It would appear that large country regulations are simply being copied by some Caribbean regulators resulting in the huge volume of consultative documents being produced; • Brings the risk of creating regulators with literally more employees than the carriers (which we have seen) that they are set to regulate – increases the cost of regulation. 8

9. Costs per capita • Country A: the operator has a potential subscriber base of several hundred thousand people from which to recover the cost of regulation; • Country B: the operator has a potential subscriber base of only a few tens of thousand from which to recover the much higher per capita costs.

10. Market Size • It is becoming increasingly difficult for operators to respond to regulatory demands or to have regulatory resources available to deal with a large number of documents in a short space of time; • Maintaining the level of resources to facilitate such excessive regulatory workloads raises the costs to unreasonable levels in relation to the size of the market.

11. 2 Major Factors • The limits on resources, especially in the Caribbean given comparatively small population sizes; • Consequential practical limits on the size of the regulators and operators and what can reasonably be afforded.

12. Recommended Approach • Less and simpler is a better approach; • Instead of implementing a plethora of regulation, the approach should be more pragmatic, focusing on the concerns raised by the public and the industry; • Consultation documents and the level of market intervention should be appropriate given the size of markets in the Caribbean; • Regulators and operators should work together to implement the appropriate targeted levels of regulation in our region; • We want to encourage investment and ultimately lead to greater penetration of Broadband and other ICT services.

13. Thank you for listening! julian.wilkins@digicelgroup.com 13