Keith Collister, Contributor
Colm Delves, chief executive officer of Digicel Group. - FILE
DIGICEL WILL have over two million customers in 20 Caribbean countries after the acquisition of Telecom Caraibe says Colm Delves, Group CEO of Digicel.
He expects to close the Bouygues deal in a few weeks time. This 20-country footprint also includes Digicel's planned launch in Haiti and the Turks & Caicos islands.
Digicel was, in fact, only granted a mobile licence on April 3, to operate in Turks and Caicos, but has been preparing for its launch after breaking Cable and Wireless's 106 year old monopoly there in January of this year.
Bouygues Telecom Caraibe operates in Martinique, Guade-loupe and French Guiana, and Digicel just began service in Trinidad and Tobago on April 6. This follows its recent launch in Antigua.
SUBSTANTIAL GROWTH
The rate of growth of the company's phone penetration has been substantial, as it was only five years ago on April 18, 2001 that the company launched its Jamaican service, Mr. Delves told Wednesday Business in an interview. They have invested US$1 billion in the region, with 1500 employees, which will increase one third by early 2007.
Whilst the average subscriber growth rate (and thus revenue growth) of 69 per cent per annum over the last five years has slowed somewhat over the period since March 2005, Mr. Delves believes the company still has good growth prospects.
He expects "strong double digit growth in revenues" for the current financial year from March 2005, reflecting the continued growth in customers, but points out that the two million subscriber estimate does not include the future growth in the major markets of Trinidad and Haiti.
THE TRINIDAD OPPORTUNITY
With a population of 1.3 million people, Trinidad and Tobago represents one of the largest markets in the Caribbean.
Digicel won a license in June last year to provide wireless service, and has since invested nearly US$200 million to create a state-of-the-art network.
The company already has a workforce of over 300 employees already in place in Trinidad. Its aim there is to offer a service superior to that of incumbent Telecommunication Services of Trinidad & Tobago (TSTT), which is partially owned by the London-based telecommu-nications company, Cable & Wireless.
Digicel T&T is led by 15-year telecommunications expert, Stephen Brewer, whose expe-rience as former CEO of Vodafone Ireland (previously Eircell) should stand him in good stead for what is likely to be a fiercely competitive market.
Commenting on the Trinidad opportunity, Denis O'Brien, billionaire founder and chairman of Digicel Group said, "Our history shows that if people are under-serviced and dissatisfied, they vote with their fingers and that has happened in every market that Digicel has entered."
OPPORTUNITY IN HAITI
Group CEO Colm Delves argues that "Haiti has the potential to be as big as Jamaica with its much larger official population of eight million people."
This figure underestimates the true population, which he believes is closer to 10 million people. Currently, mobile service in Haiti is extremely poor, with the only offering being pre-paid service.
Minimal phone subsidies have created very low accessibility, accounting for the very low combined telephone penetration of only 5.6 per cent, of which only 3.4 per cent is mobile, currently split between two existing operators.
As a result, Mr. Delves is confident that there is a "huge pent up demand" for mobile phone service. Much of this potential demand is quality rather than price driven, as many people have two handsets not due to interconnect fees, but just to complete a call. Interestingly, despite Haiti's much lower GDP per head, he believes average revenue per user (ARPU) per month will initially be broadly in line with Jamaica's, although it is likely to fall over time.
He says Digicel is employing its full team in Haiti in terms of resources, and is "not cutting corners in terms of our investment there."
The company is doing intensive customer care training using Jamaican skills, and is already sponsoring the Haitian Carnival, as well as the national football team and league. Mr. Delves expects Digicel to launch its Haitian service this quarter.
FIRM COMMITMENT TO JAMAICA
Digicel is still growing in Jamaica, with the Jamaican subscriber base having increased to 1.5 million from 1.3 million a year ago.
Digicel is also building a substantial new office building on Lady Musgrave Road to house its Jamaican operation and regional group head office.
Whilst Mr. Delves is "still confident that they are going to see further subscriber growth in the Jamaican market", in his view much of the future revenue growth is likely to come from new technology, particularly WIMAX (wireless broadband).
He does not believe that this will be substantially affected by Flow cable company, which would be offering a fixed line service, as opposed to the "portable" laptop market Digicel is targeting.
