Camilo Thame, Business Reporter
Seen here in this April 2006 file photo, from left, are Digicel T&T CEO Stephen Brewer, chairman and founder of Digicel, Denis O'Brien, and Digicel Group CEO Colm Delves, at Digicel's Trinidad launch. - file
Mobile telecommunications provider, Digicel Group, is hunting con-trolling stakes in a Colombian cellular company but is up against two other bidders from Europe and South America.
The outcome of the bid for Colombia Móvil is to be announced Thursday.
Digicel Group's head of public relations, Maureen Rabbitt, declined to comment on the pending acquisition, saying it would be inappropriate prior to the August 31 announcement.
State-owned Empresa de Telecomunicaciones de Bogotá SA (ETB), and public utility Empresas Públicas de Medellín (EPM), each owning a 50 per cent stake in the mobile company, commonly known as Ola, had notified Colombia's stock and bond regulator at the start of August that it would complete the sale process - initially set for August 3 - on August 31.
Ola, which is said to be Colombia's third-biggest mobile telephone operator with its 2.5 million subscribers - nine per cent of the Colombian market - had spent just over US$650 million to build out its infrastructure since it began operations in November 2003.
New capital
But, having failed to turn a profit in the three years, decided to seek out new capital by selling off a portion of the company - initially 15 per cent.
Three firms were shortlisted from nine international telecoms, who were invited to bid on the ailing company. Apart from Digicel, Luxembourg-based Millicom International Cellular SA (MICC) and Chile-based Entel SA also qualified to bid.
The planned move into Spanish- speaking South America, comes on the heels of the Irish firm's securing access to the French-speaking Caribbean markets this year, having already firmed up its position in most of the English-speaking Caribbean and the Netherlands Antilles.
In 2001, Digicel started providing cellular service in Jamaica, which it used as a springboard into the rest of the region, having acquired more than half as many subscribers to the then incumbent, Cable and Wireless, within the first three months.
Its customer base has grown since to some 1.3 billion cellphone users.
Debt financing
Since then, Digicel has spent hundreds of millions of U.S. dollars, largely through debt financing, acquiring existing cellular operations in the Caribbean and building out infrastructure in new markets that since Jamaica's liberalisation process began in 2000, have opened up their markets, among them Trinidad and Tobago and Haiti.
This year alone, Digicel committed US$130 million to build out infrastructure in Haiti, where it started providing service in May, and concluded, in March, the acquisition of Bouygues Telecom Caraïbes for €155 million (almost US$200 million), completing access to the Francophone Caribbean.
It also got the go-ahead this month to build a network in Guyana, but the investment it plans there was not made public.
Based on reports, Digicel will remain in expansion mode over the next few years as the Irish group targets the Pacific and U.S. markets, where 168 wireless licences are up on auction currently.
Digicel founder and chairman, Denis O'Brien, told USA Today this week that his group is in the process of applying for licenses in Samoa, Fiji and other islands that dot the Pacific Rim.
He also says he intends to enter the U.S. market by early 2007.
O'Brien's most notable achievement in the industry was the successful competitive mobile business in Ireland called Esat, which he sold to British Telecom for US$2.5 billion.
Esat was the first competitor to the state-owned Irish telephone company in 1991, similar to the situation in Jamaica back in 2001.
The minority shareholders in Digicel are Osmond Kilkenny and Leslie Buckley.
