Over US$500m for network upgrades, only 2% back from Big Tech

After comparing how much Big Tech – Meta, Alphabet, Netflix, TikTok, Amazon and Microsoft – pays in other countries, CEO of the Telecommunications Services of TT (TSTT) Lisa Agard said Trinidad and Tobago earns only two per cent, since they already pay in South Korea, Australia and the US.

Speaking at Canto’s 38th annual conference and trade exhibition at JW Marriott Turnberry, Miami on Tuesday, Agard said, “We are in an existential crisis, and the crisis is driven by Big Tech operators generating a considerable amount of traffic on our networks.”

She said Big Tech is responsible for 67 per cent of the total internet traffic in the Caribbean, but offers no network investment.

The telecommunications services invest 18-20 per cent collectively just for LTE and are working on investment capacity for Big Tech, while 4G investment has not recovered, even though construction started five years ago, but 5G is still here, Agard said during her presentation.

“We have invested collectively over US$500 million a year, or 0.5 per cent of the GDP of the Caribbean, in network upgrades and improvements since 2017. Did we have a choice about doing that and whether we raised capital from equity injections or by debt financing or other loan financing is an irrelevance. The fact is, we had to do it,” she said.

Drawing from the context of flat and declining revenue of telecommunications services in the Caribbean, Agard asked, “Who is benefiting the most from telecommunications services’ investments?”

The average cost of capital in the Caribbean is between 11 and 13 per cent, she said and was unsure as to how Big Tech's conclusion was that the most profitable part of the value chain is connectivity. She added that all equipment is bought from the US.

Agard also brought to the audience’s attention a study by the Telecommunications Authority of TT which showed a significant decline in fixed voice calling –  74 per cent – while mobile voice calling as a result of Big Tech apps also declined by 22 per cent between 2009 and 2021. But the rate has accelerated in the last few years. International outgoing and incoming calls have also declined by 81 per cent, which diminishes a source of US currency.

“While we have accept that there has been an increase broadband coverage and revenue, that has not been sufficient to offset the loss in switched voice revenue,” she said.

During the question-and-answer segment, she said, “The time for talk is over, the time for action is now, and if we want to see our islands develop and participate fully in the digital economy, we must act in the interest of our customers and our people.”