The
Development Planning Unit
Government of the British Virgin Islands

NATIONAL INTEGRATED DEVELOPMENT STRATEGY
Communication Sector in the BVI

INTRODUCTION

Communication services are a complement to transportation, and provide a fast link between areas of production and market centres nationally and internationally. Consequently, telecommunication services are very essential for effective and competitive business.

In the BVI, communications sector comprises of all communication services offered by Cable and Wireless, Cable Television (both privately owned), Postal Services, as well as several express mail companies. A wide range of services are offered including international data access service, 32 Cable Television channels, facsimile communication and delivery of document and packages to virtually everywhere in the world. The following are the companies which offered express mail services and delivery of documents:

1.   DHL Worldwide Express
2.   Federal Express
3.   Inland Messenger Service
4.   Rush It Inc.

CONTRIBUTION OF THE SECTOR TO THE ECONOMY

The leading key sectors of the BVI's economy are tourism, financial services and government. These are all service-oriented and heavy users of telecommunication services with the international community for day-to-day operation. Tourists visiting the territory place calls to their countries of origin, and accommodation establishments use telecommunications in their normal course of business. The international financial services relies on communication as it trades with global market. Also, in the course of managing the country, the public sector is consuming more and more telecommunication services. The general public use of telecommunication service has grown with increased economic activities.

Communication Contribution To The GDP

According to 1992 National Accounts, the Communication Sector contributed US$15,865,423 to the Gross Domestic Product at constant price. This is equivalent to 4.61% of the total GDP. The total GDP at this particular year stood at US$344,612,096. (Refer to Table 2). If you compare the percentage contribution with the past years, e.g. 1987, it contributed 5.21%, in 1989, it contributed 7.76% and in 1992, it contributed 4.61%. In 1992, there was a drop in percentage contribution which was attributed by the better performance of other sectors, like wholesale/retail trade which contributed 32.93% followed by Real Estate, 14.90%, followed by financial intermediation 13.31% and hotel and restaurants, 11.80%. (For more information, see Table 3.)

Note that the better performance of other sectors was a result of better telecommunication facilities. In other words, the Communication Sector has a multiplier or linkages effects to the other sectors. With poor telecommunication facilities, investments and trading cannot take place, etc. Therefore, the Communication Sector, with its multiplier effects to other sectors of the economy, has contributed indirectly more percentage than the one shown on Table 3.

Employment Contribution

According to the survey made in 1994, the communication sector had 256 employees which is about 2.25% of total employees in the whole territory. The total wage bill for this sector was US$3,562,665. The total workforce in the territory stood at 11,366 with a total wage bill of $118,638,953. (See Table 4.) If you compare the 1992 figures, there is an increase of 27 employees. From the 1994 figures, the main employers were Hotels and Restaurants with 2,539 employees which is equivalent to 22.34% of the total working labour force followed by public administration with 2,318 or 20.39%, wholesale and retail trade with 1,469 or 12.92%. As we have seen before, the percentage contribution to working labour force might be small, but, because of its multiplier effects, its contribution is much bigger.

Capital Investments In Communication Sector

The government investment in this sector is very small, if you compare with other sectors of the economy. May be this is because the telecommunication sector is mostly run by private companies. If you look at Table 6, you will note that in 1990, 1991 and 1992, the government capital investment was $1,083,474 and 1994 the capital investment was reduced to $156,725. The capital investment in these two years was used in purchase of telecommunication equipment. If you look at Table 5, you will see that the leading sector in terms of capital investment from 1990 to 1994 was transportation sector with 32.23% of national capital investments followed by Public Services Investment, 24.08% followed by Education Affairs and Services, 14.63%. There is a need for the government to increase more investments in this sector in order to increase its contribution to the national economy.

COMMUNICATION SERVICES

Telephone Services

Telephone service is offered by Cable & Wireless (West Indies) Ltd. The company is doing a commendable job, and has committed itself to the government to improve the telecommunication by providing its service to every corner of the BVI. In 1994, there were 8758 telephone in use, an increase of 2280 or 35.2% over 1990. Of this total, 5520 or 60% were private and 2621 or 20% were business together accounted for just 90% of phones in use in the BVI. There were 121 pay stations, both card and coin and wireless.

Table 14
Telephone in use (1985 - 1994)

Out-going international calls were recorded at 12,320,544 paid minutes, an increase of 4,727,138 or 62% over 7,593,406 paid minutes in 1990. Similarly, incoming international calls were recorded at 11,653,204 paid minutes, an increase of 4,141,147 or 55% over 1990. Local calls increased from 12, 800,000 units to 19,088,767 in 1994, an increase of 6,288,767 or 49%. The number of telex subscribers decreased from 38 in 1990 to 21 in 1994. This represents a decrease of 44.74 %. The number of incoming and outgoing telegrams both decreased in 1994. It is expected that this trend will continue in the future. However, the telex, although obsolete, will never be completely phased out, as long as there is a need to communicate with countries without facsimile services. The facsimile continue to increase from 252 in 1990 to 550 lines in 1994. This is an increase of line of 118%. (See Table 16).

Table 15
Telephone Traffic Volume (1989-1994)

Table 16
Telex and Facsimile Subscribers and Telegram Movements (1990-1994)

All in all, the performance of telephones and related services in use is excellent and it reflects a constant growth pattern which is a good sign of development of the sub-sector.

BVI Boatphone

The Cable & Wireless (WI) Ltd. has provided this cellular radio service which has been created specifically for the region. It has the most extensive cellular network in the Caribbean, with virtually seamless service in the eastern chain of the islands. Such a telecommunication infrastructure investment has increased the capacity and quality of service especially for tourists, i.e. Charter Boat Services.

Postal Services

Communication services of the Post Office constitute the dispatching and receiving of all local and international mails, i.e. letters and parcels. With the recently introduction of facsimile, the flow of mails to and from the BVI has been fluctuating at certain year, it shows a decline and certain year, it shows an increase. Table 17 shows that in 1989, the number of letters received stood at 2,356,000 while the following year, 1990, it dropped to 1,509,000 letters , in 1991, there was a small increase to 1,553,000 and again in 1992, it dropped again to 1,443,000 letters. From 1993 to 1995, there was an increase of 2,124,000, 2,314,000, 2,676,000 respectively with this trend being the same for letters dispatched from the territory.

On small parcels, in 1995 3384kg was received. If you compare with past years, for example in 1991, 31359 parcels were received. Since that year, the number of parcels has been fluctuating; it has never reached the 1991 figures.

Table 17
Movement of Letters and Parcels (1989-1995)

Note that the presence of courier services in the territory has not had much impact on the number of letters received and dispatched by the Post Office. However, in the category of parcels, the Post Office has lost quite a bit of business to courier services. Currently, the Post Office is consulting with the Postal Union about the possibility of introducing the express mail services in order to compete with the other couriers.

Among the main carrier operating in the territory are Federal Express, Rush It Inc. DHL and Inland Messenger.

The Post Office is facing a number of problems, one of these problems is the lack of transportation; the number of vans to transport mails to transport centres, i.e. seaports and airport are not enough; this has contributed to mail delay.

Another problem is related to mail transport facilities especially in sea. Most of the boats do not have proper facilities to keep mail in transit to other islands. The Authority concerned should take immediate action to solve these problems so as to improve the services rendered by this institution.

Cable Television

Cable Television services are provided by BVI Cable TV Ltd. Currently the company has 32 cable channels. For 1996 (up to February), there were 5591 Cable TV subscribers. An increase of 984 or 21% over 1990. The Cable TV outlets in the same period was 7617 an increase of 1030 compared with the 1990 figures which is 15.6%. This positive trend shows an increase in use of television service by the public. This implies that television service is a major means for providing entertainment, news information and education to the public. The performance of BVI Cable TV, Ltd. has always been excellent and its contribution to the economy is recognized by the government.

Table 18
Cable Television use 1985-1996

Broadcasting Services

In the BVI, there are two local privately-owned radio stations, i.e. ZBVI and ZROD, providing broadcast media. They provide the service of information, entertaining and educating the public on current events and development issues. During the disaster, they played a big part in informing the public what to do. Generally, the service of two stations have proven to be effective and efficient. Since the government does not have its own radio station, it should assist these radio stations to raise efficiency and effectiveness in the broadcasting service, information collection, analysis and dissemination in the territory.

COMMUNICATION POLICIES AND STRATEGIES

The BVI government has enacted telecommunications legislation; however, there is no defined policies on communication for future development. The government's policy should aim at the following objectives:

1.   To improve local and international communication services.
2.   To widen coverage of communication services.

With the above objectives, then we should develop policies to guide our objectives.

Policies

In order to achieve the objectives, the following policies should be pursued:

1. The government should place emphasis on policy formulation, monitoring, evaluation, and regulation.
2. Promoting private sector participation;
3. Strengthening the management of communication sector;
4. Encourage government companies or institutions to become more commercially viable;
5. Enhancing benefits from global communication organisations;
6. Improving customer services and telecommunications and postal services.

Strategies

In an endeavour to achieve the policies and subsequently the objectives, the following strategies should be implemented:

1.  Constantly reviewing the legislation; and monitoring the communication institutions;

2.  Related to promotion of private sector participation. This can be achieved through:

a)  Transferring activities not best carried out by public institutions to the private sector;
b)  Constantly reviewing legislation which hinder the development of the sector

3.  To strengthen the management of the sector, the following will be carried out:

a)  Building capacity for monitoring the sector, as well as setting and enforcing service quality standards;
b)  Training of officials in areas of management in higher learning institutions.

4.  Encourage government companies and institutions to become more commercially viable. This will be achieved by:

a)  Encouraging investment based on commercial viability;
b)  Leave supply and installation of subscriber equipment to private sector;
c)  Decentralising management into zones, where convenient;
d)  Carrying out studies to identify problematic areas.

5.  Enhancing benefits from global communication organisations. This will be achieved mainly through effective participation in regional and international cooperation arrangements.

6.  Improvement of customer service in telecommunications and postal services will be done by:

a)  Upgrading of infrastructure;
b)  Encouraging competition through private participation in requisite services;
c)  Continue to provide call boxes (pay-phones) at strategic locations.

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PROJECT PROPOSALS

The sector's institutions are mostly privately-owned e.g. Cable & Wireless (West Indies) Ltd., Cable TV, the radio stations. Most of the development progammes or project will come under the Private Sector Investment Programme. May be the government can only assist in the area of training and retraining. The following project proposals will come under the Public Investment Programme in implementing the National Integrated Development Programme.

SUMMARY AND CONCLUSION

Generally, we can say that the Communication Sector is vital because it provides the necessary support for increased economic development as well as improvements in social services. Communication services complement transportation and it provides a fast link between areas of production and market centres within and outside the country which is very essential for effective and competitive business. Because of the importance of this sector, the BVI government had committed itself to development of this sector so as to boost the economy of the territory. We have found that the economy depends very much on the tourism and financial sectors; therefore, the better performance of these sectors has been attributed by the improved service of communication sector. The international financial services relies very much on telecommunications, as it trades with global market. Visiting tourists place calls to their countries of origin, and the public uses telecommunication services with their daily economic activities.

In this case, the government should support all public and private institutions falling under this sector in order to boost the economy. The government recognises that it cannot provide sufficient financial support because of its limited resources, but it should involve or encourage private sector to take part by creating conducive atmosphere for investment. In order to improve the services of this sector, policies and strategies elaborated in this chapter should be a guide for future development of this sector. In addition to this, the government should try to solve some problems facing the institutions falling under this sector by researching on these problems and making the necessary recommendations to the government.

Communication and Transportation Sectors will always continue to be the key sectors for the present and future socio-economic development of this country; therefore, the government should play its role by supporting these two important sectors.

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