DIGICEL is finally, undeniably here
February 17, 2007
The company's entry into the Caribbean market has been one a mixture of maverick risk taking and adventurous investment, beginning with its initial investment in Jamaica some six years ago.
For example, a Time Magazine article on the region's newest cellular service provider touches on Digicel's decision to enter Haiti, an unstable country with the reputation of being the poorest in the Western hemisphere.
"Digicel's due diligence consisted of CEO Colm Delves driving around the capital of Port-au-Prince for three hours. He concluded that the nation had a rich cash economy, and [Digicel's founder Denis] O'Brien quickly committed $130 million. That money went first to a massive marketing campaign. Next, Digicel began to sells its phones, all brand-name models, for less than half the price of its closest competitor. It even gave some away."
Guyana isn't that poor but our investment climate is still a work in progress, so to speak. Yet, Digicel has invested some US $60 million in this country with a little less than one-tenth the potential customer base of Haiti. What can competitors do to answer such seemingly reckless investment?
No one is predicting the demise of either GT&T in general or its cellular service. But GT&T should nevertheless beware. It took Digicel less than a year to overtake Cable and Wireless in Jamaica's cellular services market.
In the Time magazine article, one analyst attributed Digicel's success to primarily one thing. "All they've faced before," said Yankee Group's Wally Swain, "are sleepy incumbents."
It is clear that Digicel's entry into the Caribbean market is no fly by night, quick rewards investment. Mr. O'Brien is obviously a visionary, intent on getting in on the ground floor of what will be an inevitable evolutionary leap in regional telecommunications. As of today, the company has a presence in some 22 Caribbean and Latin American territories, a number that surpasses its only regional rival, Cable and Wireless.
What we are therefore seeing here is the groundwork for a network linking as large a swathe of the Caribbean (and eventually continental Latin America) as possible. One irony here is that with the full establishment of Digicel across the region, the unity of this famously fragmented region will be for once more than submarine.
The potential downside for such a widespread service distribution – from a company that is still 80% owned by its billionaire founder, and one yet to go public – is that there is the danger of Digicel displacing companies like GT&T and C&W.
It will do the Guyanese consumer no good if the advent of Digicel marks the end of what has arguably been a "sleepy incumbency", but heralds another some years down the line.
Today, the Guyanese public is reaping the rewards of our first real taste of out and out corporate battling for its hard-earned money.
It is in its interest therefore for this battle, while conceivably waning in intensity over the upcoming months, to nonetheless continue for some time to come.