Bermudians spend five times more on telecommunications than most of their Caribbean neighbours, according to a new study of telecommunications in Caricom member and associate member markets.

The benchmarking and monitoring report by telecommunications and information society consultancy, Systec, examined issues related to telephony and the Internet including legislation, competition, quality standards and prices. The company based in Belgium previously played a key role in restructuring the telecommunications sectors in the ten new EU member states.

The Caribbean Region Telecommunications Sector report examined the markets of Bermuda as well as Anguilla, Antigua & Barbuda, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, Montserrat, St. Kitts & Nevis, St. Lucia, St. Vincent & the Grenadines, Suriname, Trinidad & Tobago, and the Turks & Caicos Islands.

Bermuda comes out at the top of the list in spending on telecommunications. The island has an average spend level of $1350 per person per year compared to the rest of the Caribbean where spending averages $250 per person per year.

?Bermuda is more advanced than the other countries to a certain extent because of the fact that telecommunications represents a higher amount per capita but a very low amount of GDP,? said Mick Reid, a principal consultant at Systec Belgium.

Bermuda spending on telecommunications represents about 2 percent of GDP which Mr. Reid said, ?shows that telecommunications are being used in Bermuda as a tool and people aren?t afraid to use telecommunications.?

?It is economically beneficial for Bermuda so in that respect Bermuda is one of the most advanced countries,? he said.

However the Island falls behind her Caribbean counterparts when it comes to regulation. With the Minister of Telecommunications still the ultimate overseer of the sector, Bermuda is one of the few countries in the region that does not have an independent national regulatory authority to monitor its market and ensure that the market is functioning freely.

?If it is a ministry actually monitoring the market, it means that the way the market is operating can change if the government changes because the government can then change the people who are actually monitoring the market,? said Mr. Reid.

He continued, ?If a company gets a license it could be by a political decision rather than be an open call for tender for using the spectrum. If it is then left up to political decisions then companies that want to operate in a particular market can?t rely upon a stable environment,? he said.

The report notes that there are many challenges ahead for the the CARICOM members and associate members before their telecommunications markets are operating in an open, transparent and completely competitive manner. Liberalisation has to go go hand-in-hand with effective competition in the provision of generally available, high-quality services at affordable prices, the report said.

Currently, no Caricom jurisdiction has true fixed line alternatives and none are considering giving alternative operators access to the existing fixed line operator?s network. The report notes this would be the most realistic option to provide competition.

Without competition and consumer protection mechanisms, telecommunication operators in the region can indulge in anti-competitive practices, the report said.

Amongst its findings, the report notes the costs of installation, calling and monthly charges from fixed lines.

In Bermuda, the installation charges and monthly charges for a fixed line are ?extremely high? in comparison to the Caribbean average. While call costs are low, high monthly charges may imply that the operator is subsidising some of the call costs, said Mr. Reid.

?If there was actually competition in market that would mean the monthly charges would have to go down.

The regulator would have to insist that those charges are based upon what it actually costs to maintain the line and service.

The prices of the calls would have to be the prices for the calls themselves and would have to be based on what is actually the cost of providing the call and there is no cost subsidisation between services,? he said.

The report also questions whether business users in the Caricom region might be subsidising the residential market with the prices they pay for fixed lines.

The average monthly rental charge for a business telephone line in the Caricom region was 30 percent higher than the monthly charge for a residential line.

In Bermuda, the report found that the installation costs for business line are 50 percent more than for a residential line.

?It doesn?t make sense because the actual work involved in installing a line is going to be the same whether it is going to be used by resident or business,? said Mr. Reid adding that in Belgium the cost of residential line is exactly the same as cost for a business line.

While such charges could be rationalised in the past due to mechanical wear and tear caused by business callers, Mr. Reid said that since fixed line operators now have ?digital? telephone exchanges there is no physical wear and tear on the equipment and there is no longer any reason for business users to pay higher rates than residential users do.

An independent regulator would be to enforce rules ensuring that the costs being charged to users are based upon the actual costs of providing the service, he said.

Bermuda bucks the trend when it comes to Internet services in the region, boasting extremely low prices for dial up and broadband services alongside Bahamas and Cayman Island.

Costs for such services are ?exceptionally expensive? in most other countries studied in the report.

The Caribbean average purchasing power parity cost of a residential broadband line operating at a speed of 256K/128k is about $150 per month while an xDSL broadband line operating at 4MB/256K would only be about $70 a month in Europe, 16 times faster at less than half the price.

On average, mobile subscribers in the Caricom region paid about 30 percent less calling another subscriber on the same operator?s network compared to calling someone on a different operator?s network in the same country. Such a situation can be misleading for subscribers using the services of an operator with a small market share because they will likely make most of their calls to subscriber?s on other networks and be charged significantly higher prices. In Bermuda, as well as a few other jurisdictions, Mr. Reid said that it was difficult in Bermuda to get information about the tariffs operators were charging for calling the other operators.

?Some operators just don?t like divulging the information which is why a competition authority, if it existed, could ensure operators are in fact providing information to users so they know what they are getting into when they start using phones,? he said.

In general the region lacks competition authorities to ensure the mobile/fixed operators are competing fairly and telling the truth about what they actual have on offer, he said.

Systec created its report on the Caricom market as a commercial venture. It plans to sell its findings to government agencies and regulators in the region since the report is designed to help jurisdictions see what is happening in their own as well as other markets so they can apply common standards, rules and legislation.