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Digicel to take on two new markets - Investing US$15m in BVI roll-out, bids US$80m for Honduras licence
published: Friday | December 21, 2007

Colm Delves (left), Digicel Group CEO and Donal O'Shaughnessy, CEO of Digicel Central America are seen here at an October 3, 2004 press conference in San Salvador, El Salvador. - File

Digicel Group is expanding into the British Virgin Islands and has earmarked US$15 million to roll out services in what will be its 24th regional market.

But the mobile services company also announced on Wednesday that its US$80.1 million bid, using the vehicle Digicel Honduras SA de CV. Digicel - a wholly owned subsidiary of Denis O'Brien's Digicel Central America Holdings Limited - for a licence in Honduras had trounced competing bids.

"Honduras is a very exciting win for us," said Donal O'Shaughnessy, CEO of Digicel Central America.

"There is huge potential for growth in this mobile market."

Digicel's will be the fourth licence to be issued by the Central American country.

Plans to dominate business

In the BVI, it is the third player to enter the market since that British dependency liberalised its telecommunications sector less than two years ago, in early 2005, but Digicel is going in with the message to competitors that it plans to dominate the mobile business there in the continued build out of its pan Caribbean operations.

The company did not specify the amount paid for the BVI licence.

Its services will be rolled out in 2008, but Digicel did not specify the month.

Its other recent foray was in Suriname where it spent US$60 million to establish itself.

By the Financial Gleaner's estimate, the mobile company's regional investments, inclusive of the Honduras licence is US$1.9 billion.

Digicel BVI will deploy a network that covers almost the entire population spread over 16 inhabited islands - another 20 or more are uninhabited - the mobile phone company said, but the direct jobs to be created are limited to about 20.

Indirectly, the network of dealers and agents that the dominant regional player establishes in each of its markets would add hundreds more jobs, the company said.

BVI is a prosperous economy with per capita income of more than US$38,000 in a tiny population below 24,000. Its known for its offshore services but its main income, 45 per cent of GDP, is from tourism. BVI remains a British dependency, but is self-governed.

Digicel has promised to deliver "more choice, competitive pricing, and technological innovation", but also to drive mobile telecommunications development on BVI.

"Digicel's goal is to become the number one mobile operator in the British Virgin Islands and we expect to rapidly roll out services in this market," Digicel Group CEO Colm Delves. "BVI is a welcomed addition to our seamless pan Caribbean network."

Other players in the telecoms sector are Cable & Wireless which maintains a monopoly on fixed line services, as well as CCT Global Communications, and BVI Cable TV.

Meantime, Digicel expects the Honduras Congress to ratify its licence in a matter of weeks.

Honduras' population tops seven million with mobile penetration estimated at 38 per cent.

Dicigel says it plans to deepen penetration to 75 per cent within five years, saying its operation there would create 300 jobs, and another 7,000 indirectly.

Its competitors in that market will be Tigo owned by Millicom; Tegucel; and Claro which is operated by American Movil.

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