Digicel, 100% privately owned, now owns 32 networks from the
Caribbean to central America to the Pacific. It’s
growing fast, launching 3G and WiMax, and is on the look-out
for further opportunities, CEO Colm Delves tells Alan
Colm Delves: Opportunities often arise when you least expect
them. As a privately held company, Digicel can move quickly
Telecoms operators have many challenges but few, fortunately,
have experienced tragedies to compare with
Digicel’s in January 2010.
The privately held operator, which is the biggest in the
Caribbean, lost five staff and 100,000 customers to the
earthquake which destroyed Port-au-Prince, the capital of
Haiti, and the surrounding area.
"It was a very challenging period for Digicel," says Colm
Delves, the CEO of the group, whose interests have expanded
from the Caribbean to central America and the Pacific.
The company’s headquarters building was only two
years old and had been constructed to earthquake-proof
standards. None of the company’s standalone base
stations were affected, but "a number of rooftop towers were
destroyed" and the company had to bring in cellsites on wheels
to ensure service continued.
"We did that in days and we expanded over the next few weeks
and months," he says. Reliable mobile phone services were
essential to the rescue and reconstruction effort —
and also vital in allowing Haitians’ many
relatives in the US and elsewhere contact their surviving
"There was a big spike in traffic in the immediate aftermath,
especially when the US operators started to offer free calls.
Traffic in Haiti moved to a higher plateau."
The earthquake happened late in the afternoon local time so
most of Digicel’s staff were at work in their
protected building. "I shudder to think what would have
happened if it had happened a few hours later or at night,"
says Delves: staff would have been crushed in their collapsing
homes, the fate of 230,000 Haitians that day.
Digicel has been heavily involved in helping the community
since the earthquake. "We committed $20 million to the relief
effort," says Delves.
Digicel has 11 million customers in 32 markets worldwide,
though is not as well known as many other operators of similar
size. That’s because it is 100% privately held by
Denis O’Brien, an entrepreneur who set up
Ireland’s second mobile phone network and sold it
to BT five years later.
But Digicel does issue bonds so it publishes trading
statements. At the end of August it announced quarterly revenue
of $518 million, "and our ebitda margin is 44%", says
Jamaica-based Delves, who has been with the group since 2004,
first as group CFO, then group CEO from June 2005.
Digicel was created at about the time BT bought Esat for $2.5
billion in 2000. "Digicel is just over nine and a half years
old," says Delves.
The company set up in Jamaica first of all to take on
BT’s old rival, Cable & Wireless, the
incumbent in one of the Caribbean’s largest
islands. "There was a huge amount of pent-up demand in
Jamaica," says Delves. "It ticked all the boxes." Services
started in 2001.
From there O’Brien expanded across the Caribbean,
"mainly greenfield operations but some acquisitions", says
Delves. When he joined the company, Digicel was active in eight
markets, but in 2005 it acquired AT&T’s mobile
business in the region. "We overlapped in five markets and
AT&T was in five markets where we had no presence." The
businesses were integrated over a 12-month period.
Since then, Delves has seen a rapid increase in the number of
markets the company serves. The biggest investments were in
Haiti "where we were the largest foreign direct investor" and
"Since then we’ve moved into central America."
O’Brien’s company acquired a small
business in El Salvador with 100,000 customers "and we invested
heavily and made it highly competitive". The others
Oddly, the El Salvador acquisition was also called Digicel, so
the now owner’s entrance to the market could not
be strengthened by a rebranding. "We tried a different tactic:
we offered customers money back if they could not get
The strategy was successful. "Now we have more than a million
customers and we are number two in the market." Competitors
include Millicom, América Móvil and
Telefónica. Now, only Millicom is bigger in El Salvador,
"In Honduras we went from the third player out of four to
number two, overtaking América Móvil," he adds.
We launched in Panama in December 2008. "It’s been
a huge, continuous expansion over 10 years, using rollouts and
The main Digicel group’s expansion to the Pacific
is only a few months old. In April 2010 the group acquired
Digicel Pacific, also 100% owned by O’Brien but
until then an independent company with a separate board. The
group paid for the Pacific company through a $775 million bond.
At the time Digicel Pacific was in six markets in the area and
had 1.6 million customers. "It had grown and reached scale and
having reached scale it was acquired by the Digicel group,"
says Delves, who now runs a company that stretches from Jamaica
in the Caribbean to central America to Fiji in the south
Now the group operates in 32 countries, "some of which are
small but some are quite large", he notes. That gives the group
a wide diversity: businesses include Digicel Bermuda, where the
gross domestic product per person is the fourth highest in the
world, as well as Haiti, 197th in the list of countries by
The diversity also means Digicel can concentrate its
back-office activities in key areas. Trinidad is a major hub
for many of the operations, while Jamaica covers the east
Caribbean. "Haiti is a standalone network", but it also
— because of the language — provides services
to the group’s operations in French-speaking
territories in the West Indies and French Guiana, on the
mainland of South America.
"For central America we run customer care in El Salvador. We
use our scale and our networks to obtain scale." The system
"would not be viable" if every operation were independent.
Scale applies to the network equipment deals too. "By and large
we use Ericsson in our greenfield operations," says Delves. "In
other networks we inherited Nortel equipment but we have
replaced that with Ericsson."
CDMA service for tourists
Technology is mainly standard GSM, and fortunately for Digicel
the old AT&T properties were also GSM. "But we have
overlaid CDMA on some networks," he adds. "For US tourists."
That means Americans visiting places in Digicel’s
footprint such as Jamaica, Bermuda and Aruba can bring their
CDMA cellphones — working at home on the Sprint or
Verizon networks, for example — and they can make and
"We don’t market the service ourselves" to
residents in those areas, "but we provide it just for roaming
customers. It’s not core to our market but it
provides a nice little additional income."
There are 3G services, with HSPA+ just launched in Bermuda.
"People in Bermuda have the highest per capita use of
BlackBerrys in the world," claims Delves. "Bermudans are huge
And the company is "in the process" of installing HSPA+ in the
French West Indies "this year", including French Guiana and
"Our focus is on WiMax in other markets," says Delves. In
Jamaica "we can provide out-of-the-box coverage to 60% of the
country". There’s a clear demand: only 17% of
Jamaicans have internet access and only 25% of that 17% have
broadband, so most of Digicel’s existing mobile
customers in the country are not connected to the net.
Digicel’s first WiMax rollout was in the Cayman
Islands, three years ago, targeted at both the residential and
corporate markets, and the company launched a corporate WiMax
service in Jamaica about the same time, expanding it to the
consumer section in August 2010, with prepay options as well as
postpay. "It’s a pure plug-and-play service." ZTE
is the vendor. "We have found them very good."
At the same time Digicel has been promoting packages aimed at
the huge Caribbean diaspora, largely in the UK and the US. "We
have an international calling package, but we also allow
friends and relatives overseas to top up people’s
accounts in the Caribbean. That allows them to bypass agents
such as Western Union."
Online top-up was hugely beneficial after the Haiti earthquake,
when relatives were desperate to get in touch and much of the
residential and commercial infrastructure around Port-au-Prince
"The vast majority of top ups in Haiti were already done
electronically. We have been pushing phone-to-phone top ups
too." Haiti has — even before the earthquake
— a poor road network and traditional methods of
distributing vouchers are inefficient.
Digicel has been slow to move into mobile banking —
though many of its territories do not need it. "We have started
to look at it. There’s a lot of hope about it and
we have launched trial financial services in Haiti." Again, the
poor transport system creates the right environment: "It can
take three days to get to the north coast from Port-au-Prince
and inter-city transfers are a godsend. We will be launching
the service in the next few months." Digicel is working with
the Bank of Nova Scotia, but that is not an exclusive deal: "We
plan to work with all the other banks."
Where next? Organic growth is strong. Even the Haiti
earthquake, tragic though it was, did not leave Digicel with a
net loss of customers as new subscribers signed up.
Data is growing strongly with WiMax and 3G both expected to
contribute to growth. "We’re looking for
opportunities," says Delves.
Costa Rica has asked for proposals for a new licence and in the
Caribbean he is looking for "small, bite-sized opportunities".
Not in Africa, though: "We think it’s overvalued."
The company does not need funds for expansion, he says: "We are
fully funded. We have more than $500 million in cash reserves.
We have no need for equity funding and we have no immediate
plans to go public."
He and the team are keeping their eyes open. "Opportunities
often arise when you least expect them," he notes. And, because
the company is privately held, "we can move quickly".