By Omar Silva

Editor: National Perspective Bz DIGITAL 2024

www.nationalperspectivebz.com

Belize City, Saturday 2nd November 2024

The Social Security Board (SSB) recently raised a critical issue to the Public Utilities Commission (PUC) about Elon Musk’s Starlink application to operate as an internet provider in Belize. Starlink’s satellite-based model could provide high-speed internet in remote areas of the country. However, SSB’s concern reflects the potential financial risks to Belize Telemedia Limited (BTL)—in which the board holds a 34% stake, representing Belizean workers’ funds. This situation places a spotlight on the challenges and opportunities facing Belize’s telecommunications market, particularly for local telecom providers SMART and DIGI.

Starlink’s Application: A Double-Edged Sword

Starlink’s unique satellite technology could increase internet access in areas where infrastructure for high-speed connections has been challenging to establish. While this offers potential for growth and connectivity in Belize’s most underserved regions, it also brings heightened competition to the market. For local telecom providers like SMART and DIGI, Starlink’s entry could disrupt an already saturated market.

Dr. Leroy Almendarez, CEO of the Social Security Board, shared the organization’s concerns regarding Starlink’s impact on Belize’s telecom market. “For Digi to offer its services, think about the investment they need to make, the infrastructure they have in place,” said Almendarez. "Because it’s so capital intensive...we want greater efficiency within the market, but we want to ensure there continues to be returns on our investment.” The potential decline in revenue for BTL could impact SSB’s investment returns, which might pressure the board to increase contributions from Belizean workers.

Implications for Belize’s Local Telecom Providers

Belize’s telecommunications market, with a population of approximately 500,000 and limited customer growth potential, faces unique challenges. Here’s what Starlink’s entry could mean for the local telecoms:

Revenue Pressure on DIGI and SMART: The addition of Starlink may stretch an already competitive environment, dividing the market and potentially impacting revenue. If a large segment of customers moves to Starlink for its high-speed connectivity, DIGI and SMART may struggle to maintain profitability while supporting the costs of terrestrial infrastructure.

Monopoly Risks: There is a risk of Starlink capturing a dominant position in the market. Almendarez noted that if the company creates a significant shift among customers, it could eventually leverage its position to control prices and reduce competition, impacting Belizean consumers.

Rural Access vs. Market Saturation: Starlink’s satellite reach offers an appealing solution for Belize’s rural and remote areas, where internet access has been limited. This would advance Belize’s digital landscape, but it could also limit the incentive for SMART and DIGI to invest further in infrastructure expansion if their market share dwindles.

Recommendations for SMART and DIGI

To strengthen their position and serve Belizean customers better, SMART and DIGI could consider the following strategies:

Enhancing Network Reliability and Speed: To keep customers satisfied, SMART and DIGI must prioritize network quality. By improving reliability and investing in faster infrastructure, local providers can retain customer loyalty even in the face of new competition.

Reaching Out to Rural Areas: Expanding services to rural communities has long been an underserved aspect of Belize’s telecom sector. SMART and DIGI could work together with government and local communities to establish cost-effective infrastructure in rural areas, possibly with incentives from the government to make this goal achievable. Given Belize’s compact geographic size, this objective is within reach and could position both companies as champions of national digital inclusivity.

Offering Unique Value: SMART and DIGI can differentiate themselves by providing services that Starlink cannot, such as tailored packages with mobile and internet bundles, cybersecurity features, or digital solutions for businesses. Engaging with customers on their specific needs can also help create a more personalized approach to telecom services.

Building Customer Loyalty Programs: Local providers could introduce loyalty programs to reward long-term customers. Offering special discounts, family packages, or perks could motivate Belizeans to stay committed to their homegrown providers.

A Balanced Path Forward

The PUC now faces a delicate decision in balancing the benefits of improved connectivity with the need to protect Belize’s existing telecom industry and the workers’ investments held by the SSB. While competition can drive growth and innovation, it is essential to ensure that local players are not overpowered by a major international provider.

With the right regulatory approach, the PUC could create an environment where both Starlink and local providers coexist, driving national connectivity goals without destabilizing Belize’s telecom ecosystem. As SMART and DIGI adapt, Belizean customers can benefit from a future where expanded choices, better service, and fair competition drive the digital transformation Belize needs.