Denis O'Brien, chairman and founder of Digicel Group. File

n one week, Digicel Group with all the fanfare that has become part of the company's operating signature, has officially launched operations in three regional markets where its spend has topped US$800 million.

It sounds like a hectic schedule for the company's business development and marketing teams, but it is a pace that is well matched and sometimes surpassed by chairman and founder Denis O'Brien.

The only difference is he is a billionaire, worth US$2.2 billion, who hops around the world on his luxury private jet, wheeling and dealing at a frantic pace that O'Brien thrives on.

O'Brien on one of those jaunts - on the way from Honduras to London, but with a half-an-hour or so refuelling stop in Kingston at around midnight - admitted that even he cannot maintain that pace forever.

In a matter of days, though not necessarily in the following order, he was in Jamaica with his 'war council' of about 20 or so people, he tells the Financial Gleaner, brainstorming and mapping out a game plan against upstarts in the market; in the United States, Vancouver, back to New York, and on to Tegucigalpa, Kingston, then London.

Indeed, in two days, O'Brien was in no fewer than four countries.

And while he is still a young man, just five decades old, and appears to sweat adrenaline, he says there will come a time when he settles into a calmer schedule.

At that point he will hand over management control of the Digicel family of companies to, he said, either Leslie Buckley, the current vice-chairman, or Colm Delves, group chief executive officer whose worldwide jaunts are as legendary as his boss' within the company.

No slowing down

Delves, at the end of November and on his way to Panama via Honduras, said within the next month or two he expects to spend a grand total of four days inside his office. Or, to be more precise, at his desk - because the office is always with him, on his cellphone and laptop.

But it will be years yet before O'Brien slows down. He still has a young company - just seven years old - to grow by expansion.

Digicel is now in 31 countries and he plans to expand to 40 worldwide.

"There are nine more profitable countries we can go into," said O'Brien.

Now "in the pipeline" are plans to build out "bigger better" networks in places such as Kiribati in the Pacific, Solomon Islands, East Timor, Nicaragua, Costa Rica and Belize.

O'Brien chooses markets that are notoriously difficult to do business in but, paradoxically, it is often their volatility and/or social deficiencies that give rise to the business opportunity - such countries tend to lack infrastructure, including reliable or full coverage communication. Or they may be on the verge of liberalising their telecommunications markets with populaces hungry for quality service they can afford.

Costa Rica, for example, is going through that process now - though with many delays - with telecoms industry watcher Signals Telecoms Consulting, saying early interest in the market, through acquisitions, sponsorships and media presence, are already coming from Digicel, Millicom, and Telefonica.

Great team

O'Brien's venture into challenging territory, such as poor and sometimes violent Haiti and Papau New Guinea, has been questioned, but the Digicel chairman has a simple response to such critics. They, too, need the tools of communication - mobile phones.

But O'Brien also acknowledges the company could not take on those markets without the team of people he has at Digicel, who have proven themselves willing to take on assignments most would fear.

It also helps, he said, that he does business with World Bank affiliate International Financial Corporation, which finances several of his projects, and whose name, O'Brien tells the Financial Gleaner, is often sufficient to clear bureaucratic hurdles.

"IFC is a good financial partner, he said. "Nobody messes with them."

Since the company's 2001 launch in Jamaica, Digicel has invested US$3.4 billion in 31 countries. Each project is financed with 50 per cent equity, 50 per cent debt.

O'Brien says he will spend another US$1 billion or US$1.2 billion to build out networks in the other nine markets within Digicel's long-range plan.

The single largest spend to date was in Honduras, where Digicel invested US$450 million to buy out a company of a similar name, acquire a mobile licence, build new mobile infrastructure, create an expansive network of sales outlets and, said O'Brien, buy a WiMAX or wireless broadband licence under which service is to be rolled out in a matter of months.

Comfortable investment

O'Brien has not fully explained why Digicel Honduras was worth the big spend that not even the group's flagship, largest and top-income generating market, Jamaica, got.

The Central American country, he said, is a big market that is underserved, adding that the "big companies took their eye off the ball".

"We are comfortable with the investment," he said earlier that night at a press conference at the Marriott Hotel in Tegucigalpa.

Comparatively, the investment in Jamaica is "maybe US$400 million over time".

Honduras is a country of 7.5 million people spread across 112,000 square kilometres; Jamaica has 2.7 million people over 11,000 square kilometres.

Betting on honduras

O'Brien says Honduras will lose money in year one, but will likely show signs of a turnaround in year two, 2010. He projects, with fingers crossed, that the market will be fully profitable in five years.

"I hope," he quickly adds. "I'm saying a prayer."

Digicel Group, which incorporates the company's Caribbean and Central American operations, incorporated under some 75 subsidiary companies, was worth more than US$2 billion by assets at balance sheet date March 2008.

But the weight of the company's debts was telling on it. Annual losses were declining - from US$147 million in 2007 - but the company still ended the year with a deficit of US$78 million, and accumulated losses of US$1.2 billion. The company was also devoid of equity, reporting negative capital of US$954 million, which accounting experts said meant that O'Brien may be forced to recapitalise if revenue flows fail to grow sufficiently.

But at the end of November, in a flight over the Caribbean Sea, O'Brien said the Caribbean businesses, with the exception ofone country that he did not name, had turned the corner and were all "net income positive". They were now profitable.

Good promotions

In addition, the group had substantially reduced its leverage or levels of indebtedness from more than seven times earnings before interest taxes amortisation and depreciation to 4.3 times EBITDA.

When Digicel Group bought out Digicel Holdings in 2006, it had 4.5 per cent market share. At the launch of the new network on November 24, Chief Executive Miguel Garcia said the company had a 28 per cent share, and had leapfrogged from No. 4 to No. 2 of four players, through "good pricings and promotions".

"It was the team," added O'Brien. "It was a great result," he declared. "We have loads of ambition. We want to be number one."

The press conference preceded a grand reception at the Marriott. There a 'curtain' of lights was created at the entrance to the reception room on which Digicel advertisements were projected. Drinks, food and entertainment flowed aplenty. But the curtain of lights was matched only by the young pelvic-thrusting 'Elvis Presley' who serenaded guests.

On the go

Satisfied with the successful launch, the Digicel team, on their way to the airport, immediately began thinking of the other two launches to happen days apart.

British Virgin Islands was next, November 29, then Panama four days later, posing a challenge - how to get O'Brien to the venue at the same time he was supposed to be in the South Pacific.

Why not 'beam' him in, came the suggestion. A firm with the capability had been identified.

They could project his image at the podium, not entirely in the vein of Star Trek, but moreso a replication of what CNN did on the night of the United States election when it projected, separately, images of a CNN reporter and musician/social commentator will.i.am into the studio, as if they were physically there.

It would be costly, but cheaper than flying in the chairman, came the selling point.

The idea remained just that, but it is that type of thinking that O'Brien encourages. Indeed, on the flight to Kingston from Honduras, from an airport that is locked down nightly for security reasons, the Digicel chairman declared himself impressed with a young salesman called Marlon, who in the last 'war council' meeting kept reeling off several off-the-cuff ideas that the company was acting on.

Marlon has since earned himself the nicknames of 'Bubbles' and 'Squiggles'.

BVI was a US$17 million investment in a market of 25,000 high-disposable-income people.

Topping competitors

Panama launch was on Tuesday, December 2, following a US$350 million of investment there to serve a population of 3.4 million with 71 per cent mobile penetration, and linking into the seamless network that Digicel has built across its three Central American markets.

Digicel's war room was created when the company learned that giant telecoms America Movil was entering Jamaica through acquisition of MiPhone, now renamed Claro Jamaica.

Claro has 153 million customers in the Latin American and Caribbean region, operating in big markets like Brazil, which has a 190 million population.

O'Brien laughed at what he called the "fascination" that onlookers seem to have with his interaction with Carlos Slim, 68, the world's second-richest man with a fortune of US$60 billion and owner of America Movil.

Rumours that he was in talks with Slim to sell Digicel to the Mexican were dismissed by O'Brien, who is Irish.

"Absolutely, categorically not," he said, when asked if the speculations were true.

"There's too much fascination, too much speculation."

What about floating the Digicel Group either as a whole or in part? Again the answer was "no".

Digicel now has a 6.4 million customer base, which O'Brien says should grow to 10 million when the company is up and running in the other nine targeted markets.

He said Digicel has deliberately chosen countries with populations under 10 million people to set up operation, saying his playbook eliminates big countries as prospects.

"The amount of capital that we would have to lock up in one country would be too much," said O'Brien. "We are not going after markets with 30 million to 40 million."

Though his history with his other investments tells a different story, O'Brien says he is not driven by the need to compete on size with other telecoms, but on quality and price.

"It's not about going after the big boys," he said of Digicel's strategy. "There are other bigger companies than Digicel. What customers want is a network that works."

lavern.clarke@gleanerjm.com

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Digicel outlet in Haiti, the group's largest Caribbean market.