Insight 6/6: ‘The impact of latency on Caribbean competitiveness’

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Bridging Islands, Connecting Futures    

In this final instalment of our insight series ‘Bridging Islands, Connecting Futures’, we focus on latency. Latency – the time it takes for data to travel from one point to another – is a technical provision that might seem insignificant, but the impact of high latency (long data travel time) is deeply felt in everyday life across the Caribbean. With every link clicked, message sent, online game played, or video streamed, latency determines how quickly digital interaction takes place. In industries such as finance, manufacturing and streaming services, even milliseconds in delay matter. A banking app that takes too long to authenticate a transaction or a video call that lags during an important meeting can disrupt progress, leading to frustration. In the Caribbean – a region striving for economic growth and optimized public service delivery via digitalization – understanding and addressing latency is essential. In this regard, everything evolves around regional competitiveness, accessibility to digital services, and ensuring business continuity.  

What implications are brought forth by high latency? 

To fully grasp the impact of high latency, it is important to understand how it directly affects daily life in the Caribbean. Slow internet speeds and poor digital access can make everyday tasks such as loading a website, joining a video call, or using cloud apps painfully frustrating. A universal issue, one might say, however – for local Caribbean businesses, especially those in e-commerce, tourism, and finance, high latency limits the ability to operate efficiently and compete globally. To illustrate, the tourism sector heavily depends on online bookings, digital customer service, and real-time coordination with international partners. High latency can result in booking errors, communication lag, or poor user experience. In gaming and entertainment, latency leads to lag and buffering that ruin user experience and reduces revenue potential for local platforms. Even more critically – high latency poses risks to national security and emergency services. Delayed communication between agencies, disrupted access to cloud-hosted surveillance or dispatch systems, and slower public alerts can all compromise emergency response.  

Why is high latency a Caribbean issue? 

One of the main reasons for high latency in the Caribbean is the region’s (historically) heavy reliance on overseas digital infrastructure. All subsea cabling – required for internet accessibility and the exchange of data – lead to the U.S. and in the case of the Caribbean, to Florida in particular. Many online services and data exchanges therefore travel thousands of kilometers before reaching end users in the Caribbean. This geographical distance naturally increases response times and leads to high latency. In addition, the region’s digital ecosystem is very fragmented with limited interconnectivity between islands. Moreover, the region has an underdeveloped regional cloud and datacenter infrastructure. Instead of keeping traffic regional, data often takes inefficient routes. This slows things down and also increases vulnerability to external outages and creates bottlenecks. Without stronger local infrastructure and cooperation, Caribbean nations will continue to experience latency that stifles digital ambitions.  

Interconnectivity can help local communities 

As described in the first instalment of this insight series, enhancing interconnectivity between Caribbean islands can help the region benefit from lower latency. By expanding local datacenter infrastructure and establishing direct (subsea cable) connections between islands, data can flow more efficiently within the Caribbean region – without a detour through far-off servers in the U.S. or elsewhere. It will result in faster, more reliable access to digital services for local users, such as students attending online classes, small businesses managing orders, or hospitals working with cloud-based systems. Stronger connectivity between islands also encourages collaboration between governments, boosts regional content hosting, and lays the groundwork for new digital industries to emerge. The result is a faster, more resilient, and self-sufficient internet ecosystem that empowers Caribbean communities to thrive in a digitalized environment.  

Caribbean Datacenter Association initiatives  

At its recent ‘Digital Caribbean 2025’ event, the Caribbean Datacenter Association (CDA) unveiled a series of strategic initiatives aimed at addressing the region’s persistent latency challenges. One key recommendation was to incentivize the migration of public digital services to regional datacenters, allowing governments to lead by example in adopting local hosting. By keeping e-government platforms within Caribbean jurisdictions, countries can significantly reduce latency while enhancing data sovereignty and security. The CDA also stressed the importance of harmonizing interconnection and data governance policies – including cybersecurity legislation and digital trade frameworks – to support seamless, low-latency cross-border digital services. Additionally, the CDA has called for the classification of internet exchange points (IXPs), datacenters, and cable landing stations as critical infrastructure, ensuring they are prioritized in investment decisions and integrated into national disaster preparedness and cybersecurity strategies.  

Enabling low latency in the Caribbean 

As more Caribbean nations embrace digitalization, low latency is no longer a luxury – it is a prerequisite for meaningful participation in the global digital economy. Without it, smaller island states risk falling behind in areas such as trade, innovation, and public service delivery. Addressing this challenge demands more than physical infrastructure; it requires sustained political commitment, regional cooperation, and strategic investment in technologies and policies to power a truly connected Caribbean.