Dominican Republic 2014 | TELECOMS & IT | REVIEW: ICT

By diversifying beyond tourism, the Dominican Republic has become a regional hub for ICT and related services.

With the inevitable melding of technology and commerce, the paradigm shift to business process outsourcing (BPO) solutions, and the rise of the cloud over traditional indentured IT systems, the services sector has seen exponential growth worldwide. In fact, industry experts calculate that by 2020 the global services sector, today representing 20% of world trade, will account for a full 55%. In light of this tendency, and to diversify the economy beyond tourism, the Dominican Republic has positioned itself as a regional IT hub by leveraging the commercial advantages of the various trade agreements to which it is a party, thus consolidating its export platform, which encompasses 48 markets, to the benefit of state coffers and citizens alike. Freddy R. Dominguez, Vice-President of telecoms provider Claro, in a TBY interview explained that “We have worked on projects in partnership with the state, as with the Rural Broadband project (Banda Ancha Rural - BAR), where we won a public tender to link broadband services and fixed telephone lines with over 500 communities previously without access."

Domestically, the Dominican Chamber of ICT (Cámara TIC) fosters the sustainable growth of the republic's technological backbone, while stimulating the competitiveness of the local ICT sector. Formed by sector players, it seeks to make sure that the sector maximizes its contribution to the national economy, and, atthe public sector level, that eDominicana sees a smooth rollout.

And with regional reach, the InterAmerican Telecommunication Commission (CITEL) is tasked with fostering broad modernization of ICT through the free exchange of information, and the promotion of best international practices in the technical, regulatory, and commercial dimensions. The Dominican Republic, fronted by INDOTEL, currently holds the vice-presidency of CITEL's permanent directive council for the 2010-2014 period.


The Dominican Republic was fortunate enough to brave the global crisis rather well, having grown by 3% in 2009, in stark contrast to the average 2% shrinkage of other Caribbean economies. This has vitally enabled sustained investment in the national backbone for wireless broadband, on which all abovementioned business opportunities are based.

INDOTEL declared that the Dominican Republic had attained a 100% teledensity as of March 2010 based on the 8.78 million mobile phone lines and 987,586 landlines registered, which in tandem made up a teledensity ratio of 100.2%. Yet, national access remains uneven, giving rise to initiatives such as the opening of 1,000 broadband digital centers nationwide to narrow the digital divide, particularly in rural communities. World Bank funding has enabled the building of the national fiber-optic backbone. This drive also gave rise to the concept of eDominicana, a reference to efforts to put the state and the general public online. The government's primary ICT-related goal today is to continue local expertise and employment, the latter in large part accounted for by the call-center business providing nearshore services.


Claro dominates the internet segment in the Dominican Republic, with over 40% of the market. It is followed by Tricom with over 20%, while Orange Dominicana ranks third with 16%. According to Reuter's, as of July 2013 America Movil's Claro held 51.2% of the wireless market compared to Orange's 38.4%, 7.4% for Viva, and 3% for Tricom.

Broadband penetration currently stands at just over 5%, while the number of internet users is around 4 million. “Our early adopters," Claro's Dominguez continues, “were enamored of the performance and benefits of this new technology, and demand is growing so fast that we have already twice expanded our field workforce that installs FTTH and the IPTV Video and Data services associated with it."

Meanwhile, resumed momentum from INDOTEL in seeking to sell off frequencies in the 941MHz-960MHz, 1710MHz-1755MHz, and 2110MHz-2155MHz spectrum bands for wireless telecoms services—suspended since 2011—stands to boost local communications, while making the republic a more tempting investment address. Revenue to be generated from the spectrum sales will in part fund the national shift to digital TV, and the government has already begun handing out 1 million decoders to ease the transition.


The mobile phone subscription rate slipped from 90% in 2012 to 87% in 2013, accounted for by market saturation, which has predictably also led to some consolidation. A case in point is mobile network operator Orange Dominicana, which launched the first LTE network in the Dominican Republic in mid-2012, providing peak data speeds of up to 100Mb/s. Late in 2013, Orange Group, having sunk approximately $150 million into its local network, sold Orange Dominicana to Altice Group as part of a withdrawal from non-strategic markets. The latter also purchased integrated telecoms services provider Tricom Telecom.


The Dominican Republic's mobile service providers are Claro República Dominicana, which operates the Claro brand and is a subsidiary of América Móvil; Trilogy International Partners, operating under the Viva brand, Telecable de Tricom, which operates the Tricom brand; and Orange Dominicana, a subsidiary of France Télécom. Price is very much a determining factor in the selection of a mobile company. According to INDOTEL data, as of December 2013 there were 9.2 million mobile lines in the republic, of which the vast majority, at around 7.5 million, were prepaid, while around 1.7 million were postpaid lines. And due to the prevailing environment of price-oriented competition, average revenue per user (ARPU) has seen a decline over the years. This, as in other emerging markets, has obliged some operators with preference for revenue over market share to offer value-added data products to boost ARPU. Orange's dedicated offers for smartphone postpaid users are a case in point. Considered key to a competitive market, mobile number portability (MNP) in the republic commenced at the end of September 2009.


Established in 2000, Parque Cibernética lies at the heart of the country's IT sector. A free zone with around 111,500 sqm of disposable area for development, it hosts many of the country's 35 call centers and BPO enterprises, notably Stream, as well as many of its 50 software developers, and a film school.