Case study: Digicel

When Denis O'Brien began exploring the idea of launching a phone business in Haiti in 2005, he was lured by a single number: just 4 per cent of the population had a cell phone. "We saw a high-cost market, with a poor network and few subscribers," he says. "It was nothing more scientific than that. We turned it on its head."

In the past decade, the situation has been transformed. Today, it is difficult to travel around the country without spotting the company's bright red colours on advertising posters, painted on walls and on the jackets of its extensive network of street vendors.

Digicel, registered in Bermuda with operations in the Caribbean, Central America and the South Pacific, has spent some $1.2bn in Haiti, investing in upgrading the network, installing a system of masts and importing cheap handsets to help win a clear market lead with some 4.5m of the country's 6m subscribers.

"The luck for us was that local families never believed in investing the level of capital required," says Mr O'Brien. "We didn't compete with any oligarchs." But after Voila, another operator, refused to share telecoms equipment, he installed 50-gallon drums in Digicel shops and invited its rival's customers to dump their old phones and exchange them for Digicel's red models.

The company employs some 1,100 staff directly, including many working in a call-centre that serves the Caribbean. It offers a 10 per cent commission to a network of 65,000 freelance sales staff, who collect cash or epayments to charge its phones.

Maarten Boute, who runs the operations in the country, says there were concerns that relatively low literacy rates would impede the use of SMS services, but an initial period with no charges for text messages proved extremely popular.

Digicel also makes no charges on incoming calls - particularly appealing for family members receiving calls home from the large Haitian diaspora. The company's coverage stretches up to 20 miles out to sea, allowing fishermen to sell their catch before returning to port.

Mr Boute stresses the importance of Digicel's foundation, created even ahead of the company. It has spent $40m to date, notably on building schools and training teachers, as well as giving support to football and to the renovation of Port au Prince's historic iron market.

Mr O'Brien adds: "We've always felt philosophically that we didn't want to be seen like the existing oligarchy nor robber barons. We make very good profits, but we also have a massive social impact."

But the company's executives cannot afford to stand still. A short walk from Digicel's downtown headquarters is the blue building that houses NatCom, the former state-owned fixed line operator in which Viettel, owned by the Vietnamese military, acquired a 60 per cent stake shortly after the 2010 earthquake.

The company has since invested in fibre optic networks, cut prices and offered cheap unlimited data packages as well as free mobile access to Facebook. Digicel may be facing tougher competition, but Haitian consumers look set to benefit further.

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation