Denis O'Brien has not abandoned plans to enter the telecoms industry in the United States in spite of pulling back from that market earlier this year when he restructured his Digicel mobile phone operation in the Caribbean, writes Ciarán Hancockin Haiti.
Speaking in Haiti, Mr O'Brien said he would look again at a launch in the US, probably in 2009. "We haven't given up on America," he said. "We'd like to do it but it'll probably be 18 months to two years away." Mr O'Brien is believed to have considered launching in the US as a mobile virtual network operator (MVNO) and was planning to float the company on the stock market there. He talked bullishly about launching a "Tet offensive" on the US telecoms market to the international media.
This plan was shelved when Mr O'Brien restructured the Digicel business, buying out his fellow shareholders in the Caribbean mobile business in a $2.4 billion (€1.8 billion) refinancing. That move has given Mr O'Brien 100 per cent control of the Caribbean business, earning him $800 million in the process.
"We wanted to focus on making that [ the restructuring] successful," he said. "It was important that we concentrated on that deal for our bondholders, so that they were comfortable with what we were doing." Mr O'Brien said Digicel earned revenues of $1.4 billion last year and earnings before interest, taxation, depreciation and amortisation of "a couple of hundred million dollars".
He said its EBITDA would grow substantially this year, as revenues from its mobile operation in Haiti, which launched just over 12 months ago, began to flow through. Digicel has secured 1.5 subscribers in Haiti, its most successful launch to date. It has five million subscribers in 22 markets in the Caribbean.
Mr O'Brien was in Haiti to meet a group of Irish entrepreneurs who had travelled there as part of the Ernst & Young Entrepreneur of the Year award and were looking at investing in local projects on the impoverished island. Digicel was a part sponsor of the trip, which involved more than 30 Irish business executives and investment agencies north and south.
Mr O'Brien said he would also like to expand Digicel's operation in the Caribbean into Cuba, which has a population of 11.4 million and is the only major market not served by the group in the region. "We'd love to be in Cuba," he said. "We'd travelled there a number of times but we haven't been able to do it yet." When asked if the company would have to wait for a change of regime in Cuba, Mr O'Brien said "not necessarily".
He said the US trade embargo on Cuba would also not be a stumbling block to Digicel doing business there. "We're not an American company. This is a business based in the Caribbean and run by Irish people." He said an expansion into Cuba would probably be three to four years away.
Digicel operates separate entities in central America and the Pacific and has major expansion plans for both areas over the next 12 months. The company relaunched in El Salvador about two months ago, having acquired a business there. "That market is just flying," said Mr O'Brien.
Digicel is also eyeing licences in Honduras, Panama and Nicaragua.
In the Pacific, Digicel will launch in Papua New Guinea in July and has plans to enter the markets of Fiji, Vanuatu and Kiribati in the next six months.
