Caribbean 2005 – Remote Paradise or Untapped Market?

Our neighbors to the south are building a common market:
is a CARICOM Single Market & Economy just around the corner?
 
For a few million northeasterners who have seen June come and go with only a few token days of anything which could be called summer, the Caribbean conjures up visions of paradise –(ie: the opposite of New England weather). When you get there, those visions are rewarded and you begin to forget the grinding 30 days of cold rain in May. Could it really have been that bad?
 
But demonstrating true Yankee essence –(the inability to sit still) – a few hours of sun serves only to warm the brain to action - what kind of business can we do around here? Kind of sad actually, but let's press on.
 
In June I was in attendance at the Caribbean Association of National Telecommunications Organizations (CANTO) conference in St. Kitts and Nevis. A WCG client Global Marine Systems (www.globalmarinesystems.com) presented a paper on the business opportunities in regional networking. To be honest, I had never given the Caribbean much thought as a market outside of tourism, but what I saw and heard is causing me to look much closer at this emerging market.
 
An example case: St. Kitts and Nevis
Quick Facts:
 
Current Market Dynamics:
 
Why should you care?
Imagine the above scenario played out over a dozen Island nations or so, all willing and well on the way to forming a common market called the CARICOM Single Market and Economy (CSME)
 
We believe that the above list of facts point to significant opportunity in 2 key areas:
 
1. Communications build-out
It is no accident that the rise of the outsourcing markets in both India and elsewhere were preceded by the installation of some heavy duty network bandwidth in the region. As you know, the formula is not a mystery:
Stable Gov't. + quality education + good local market wages + english speaking + low telecoms cost = Outsourcing
 
In the Caribbean, the build out is just beginning in earnest and the motivation of Governments to bring these types of jobs in region is clear. The challenge is to work through the politics and the legacy of monopoly which has a tendency to add layers of complexity to the situation. However, the licenses are available and in truth these are all very similar issues worked through in North America and Europe in recent years - I am willing to bet there are more than a couple of telecoms corporate lawyers out there looking to dust of the old skills on a fresh market.
 
From a technical perspective, the combination of mobile technology, now able to deliver a high quality, high bandwidth, secure signal and the relatively inexpensive costs of installing and maintaining undersea network allow for innovative companies to install high speed data networks in a very short time while bypassing the incumbent networks altogether.
 
The value proposition is fairly straightforward. Combining voice minutes via VOIP and rapidly increasing demands for data from both consumers and business - the opportunity for these types of regional networks throughout regional island chains, seems to have arrived.
 
In short, the Caribbean is ideal for the build out of a series of mobile terrestrial networks throughout Islands metro centers and even many secondary residential areas. When all of this traffic is backhauled onto a privately owned undersea cable installed with direct peering onto existing backbones in the US and South America, the traffic actually becomes the negotiation currency. This model gives leverage to the entrepreneurial companies and Governments who can use the model as a replacement for the inevitable revenue loss from the abandonment of traditional and increasingly outdated telephony business models.
 
2. New Business Models
Remember, these networks do not take long to install. Mobile take a few weeks, with the undersea cable obviously requiring more time. Once these types of networks are in place, the types of products and services which can go on top of this model are the exact products which make a services economy grow – at market competitive prices. VOIP, Call Centers, On-Line Education, business applications, mobile consumer features – e-everything, you know the drill.
 
Given the educated populace, market wages and government interest the ingredients seem to be there for a strong Outsourcing regional market. By either augmenting current outsourcing arrangements with comparable resource in the western hemisphere, with English and Spanish speaking personnel, the opportunity to add additional competition into this growing global market is very real. It is important to note that each of the Islands are different, but there is a clear desire to overcome differences with the goal of building and monetizing market power – do your homework.
 
The identification of emerging markets, and early entry into those markets can give great leverage in setting the rules of engagement and the tone of the market.. There were a lot of well known names in town at the conference who seemed to have realized this, interestingly enough there were a lot who were not here as well - from our way of thinking the pecking order of leaders and followers is being set today.
 
Btw - For those on regular flights to India and China - Flight time BOS to the Caribbean - 4 hours.