Phone home: why mobile providers are so eager to tap directly into overseas remittances

Caribbean mobile/cellular service providers have been running campaigns to get family and friends overseas to top up loved ones’ accounts from abroad. This post examines why they are so eager to employ this strategy.

Over the past few months, have you noticed an increase in the SMS text messages from your mobile/cellular provider? If not, lucky you! For many of us across the region, these messages – which are sent almost daily – tend to run the gamut of reminders of free texts and potential minutes, to short-term promotions. However, recently, there have also been messages to get friends and family, in the United States, Canada and the United Kingdom in particular, to top up your mobile/cellular account from overseas.

While this promotion might appear somewhat gimmicky and far-fetched, a recent article in our news roundup clearly highlights Digicel implementing this approach in order to tap directly into overseas remittances to the Caribbean:

Overseas remittances

According to the Inter-American Development Bank, remittances to Latin America and the Caribbean increased by 6%, from USD 57.6 billion in 2010 to USD 61 billion in 2011. As reflected in Table 1, which shows a breakdown of remittances to CARICOM/Caribbean countries, considerable sums of money are being sent back to the region, which not only supplements residents’ incomes but also is a vital contributor to national economies. Moreover, the World Bank projects that remittances to developing countries worldwide will continue grow from an estimated USD 406 billion in 2012, to approximately USD 534 billion in 2015.  More