Digicel’s Largest Market is Not Jamaica. It’s Haiti.

Of course we all knew that.

Yeah right.

But for those of us who didn’t. It’s true. In a recent article about their Chairman Denis O’Brien, The New York Times spoke extensively about his work in Haiti, his relationship with the people and his company’s investments there.

He recently oversaw the opening of the 50^th, yes 50^th school that his company was rebuilding, and get this, they are pledging to build another 80 in the next two years (by 2014).

Surprised! Ok here’s more. They’re building a hotel. The New York Times is reporting that

“…Digicel unveiled plans in November 2011 to invest US$45 million in a new 173-room hotel next door to its offices, to be run by Marriott. That announcement came at a forum sponsored by the Inter-American Development Bank that drew 500 business people from 29 countries.”

Very impressive for the little Irish Company that started its Caribbean work here in Jamaica.

They’re Literally in Charge Over There

The New York Times story states that “Digicel… is the country’s largest employer and taxpayer. The privately held company has invested US$600 million in Haiti, making it by far the country’s largest foreign investor ever, and it has democratized communications with its strategy of selling low-price cellphones and services to the masses.”

I think this article has stopped short of saying that Digicel is running the country over there. They report that the mayor and other city officials have set up office, rent-free on the sixth floor of Digicel’s building since the earthquake, and so as to help the country Digicel has even pre-paid its taxes. Read this.

Who's the boss now!

Mr. Jason (Mayor Jean-Yves Jason) said the city could not have functioned without Digicel’s help in the early days after the earthquake. The company prepaid its taxes, which allowed the city to make its payroll and other payments, and paid for dump trucks and tractors that were used to remove rubble and clear spaces.

This part goes without saying, “Mr. O’Brien has profited extensively from Haiti, which is Digicel’s largest market and accounts for roughly one-third of its 11.1 million subscribers.”

Denis O’Brien, The Man on a Mission

Talk about clout for the Chairman and the company. Mr. O’Brien is charged with overseeing the progress in Haiti on behalf of former President Bill Clinton. The article goes on to highlight some impressive work by the Digicel Haiti Foundation. After they started the rebuilding they realized that building schools wasn’t enough. Get this.

The foundation quickly realized, however, that simply putting up a school was not the answer. “Teachers are a catastrophe,” Mrs. Gauthier said. So Digicel began remedial teacher training and paying teachers when the Ministry of Education was late or checks went missing. And then there were textbooks and desks and myriad other things.

This all started they report, when Mr O’Brien “bid US$47.5 million for the sale of a mobile license in Jamaica and won, opening the door to a telecom enterprise spanning the Caribbean and South Pacific. Forbes magazine ranks him 254th on its list of the world’s billionaires, with an estimated US$4.2 billion.”

Will Jamaica and Haiti be better off for Digicel?

Digicel is similarly revered here in Jamaica. It has extensive clout, influence and bargaining power. Somehow I think it’s amazing that the Claro deal went through. But others think otherwise. Consumers love them for their constant focus on customer service and campaigns that offer huge prizes. However this power and influence could be considered risky in one company’s hand. Digicel has almost grown to monopoly status in Jamaica; They literally control the Jamaican market after recently purchasing their number 3 competitor, Claro, and they are accused as having high inter-connection charges by their major competitor LIME.

Monopoly! You Aint see nothing yet. Pay me $200.

Even recently (December 2011) Jamaica’s Fair Trading Commission (FTC) filed in a lawsuit (albeit after the merger) that mobile phone customers are likely to be hurt by the approved merger of telecoms providers Digicel and Claro. The Observer reports them stating that “Claro’s arrival in the market led to Digicel’s promotions and value offerings to consumers increasing significantly and transaction prices falling dramatically.

“The price competition led to significant benefits to consumers, as talk time increased by 39 per cent while consumer expenditure decreased by two per cent” The Observer reports.

Nevertheless, their constant innovation (although I really feel they were spurred more by the Claro competition), heavy sponsorship of local events, superstar marketing skills (and personalities such as Usain Bolt and Shelly-Ann Fraser), signigify a winning team that thinks long and plays hard.

And it is paying off big time… at least for Digicel.