Digicel Here to Stay

Well I’m sure everyone’s going crazy wondering what Digicel will do now, well I just came back from an urgent Media Conference at Digicel’s office at lunch today and they are certainly not going anywhere.

The Media Conference was headed by CEO, Vanessa Slowey, Director Seamus Lynch and their lawyer. They started by introducing some facts about their setup, such as Digicel being committed to invest K1.2 billion in rolling out their network. They have already spent in excess of K480 million already. Digicel currently has 350 full time employees and 450 part time staff with 98% of total staff being PNG citizens. So in light of their investment and their firm belief that competition is the way forward for any economy in today’s world, Digicel are definitely here to stay.

Digicel has 2 licences, a mobile telecommunications licence from ICCC and a spectrum licence from PANGTEL. Digicel claim that proper procedures under the 2005 Telecommunications Act were not followed by PANGTEL in their attempt to revoke their spectrum licence. So last night after being served the letter from PANGTEL at 3pm their lawyers were already out at the courts seeking an injunction against the decision at 5pm. So in short Digicel is continuing as usual with business and they will not be stopping their service while this is fought out in the courts. Digicel’s lawyers are now looking over the PANGTEL decision.

Seamus Lynch, Digicel Director added that ‘…I met with the Prime Minister Grand Chief Sir Michael Somare in early March 2007, and he personally gave us the reassurance that our investment and licence to operate in this country was protected. The actions of PANGTEL yesterday appear to be very politically motivated. We have the full support of the ICCC. It is business as usual for Digicel’.

A good point raised by Mr. Wade of EMTV during questions was what Digicel felt towards the interconnectivity issue and the prospect of running a parallel mobile network in the country. Digicel stated that interconnection discussions have been attempted to be made with Telikom but Telikom have so far dragged out the issue so long now that no resolution on it has been made. Under ICCC however interconnectivity is a requirement for Telikom and Digicel has the right to request interconnectivity from Telikom. Digicel said that their biggest hurdle since setting up in PNG has been the interconnectivity issue. Because of this position by Telikom, Digicel said their strategy will now be to reach 2 million users within 18 months. They now already have 20,000 customers on board.

Digicel also said that their technical infrastructure is now 4 times larger than the B-Mobile network and is state of the art, so if Telikom will not co-operate now, they will aggressively seek growth to make Telikom want to interconnect with them because within 18 months Digicel will have more mobile clients than B-mobile.

Digicel concluded that they are not here to fight regulators, they are simply here to offer competition, to enable economic growth and they will be seeking to talk to the government to clear up the situation. Seamus Lynch said that the people have obviously voted with their feet judging by the strong growth in sales and they will be here to ensure that their customers come first.

24 thoughts on “Digicel Here to Stay

  1. No worries Rodney, by the way here’s some info from Wikipedia about the founder and owner of Digicel, Denis O’Brien, this should explain to everyone who might be curious as to why most management there have Irish accents. He was here last night having beers with us at the digicel launch at Lamana (will show pics soon):

    In 1995, O’Brien set up and chaired the Esat Digifone consortium which submitted a bid for the second Irish GSM mobile phone license. Esat Digifone’s bid beat off five other applicants, all of which included major international operators. The Esat Digifone consortium was 40% owned by O’Brien’s interests, 40% owned the Norwegian state telecoms operators, Telenor, with the balance being owned by International Investment and Underwriting (IIU), an investment vehicle owned by Mr Dermot Desmond.

    The awarding of the licence to Esat Digifone is one of the matters being inquired into by the Moriarty Tribunal which was established in 2002 to investigate alleged payments to politians. However despite extensive private and public enquiries and evidence given by over 140 witnesses, those allegations remain unproven and unsupported by evidence given in public. All parties involved in the specially constituted inter-departmental Project Team have denied any impropriety or wrongdoing and have specifically denied suggestions of interference in the license process on the part of the then Minister, Michael Lowry T.D. The tribunal is expected to issue its final report into this matter by the end of 2007. Mr. O’Brien successfully challenged the Moriarty Tribunal on two occasions in the Irish Courts. In November 2006, he filed a complaint with the European Court of Human Rights protesting at the manner in which the Tribunal has conducted its inquiries.

    On 7 November 1997, Esat Telecom Group plc held an initial public offering and was listed on the Irish Stock Exchange, London Stock Exchange, and NASDAQ Stock Markets. In 1999, relations became tense between Denis O’Brien and Telenor over how Esat Digifone should be operated. Telenor tried to remove Denis O’Brien as chairman of Esat Digifone and remove the Esat name from the company. Esat for its part retaliated by threatening to sue Telenor, and making repeated offers to buy the Norwegian company out. Eventually, in November 1999, Telenor bid for the entire share capital of Esat Telecom Group plc as a way of solving the situation. The bid was rejected by the Esat board and so became a hostile takeover attempt. In order to defend this, in January 2000, British Telecommunications plc (now BT Group plc) made a friendly takeover offer for the company which was backed by the Esat board. Esat became a wholly owned subsidiary of BT and was delisted from the stock market. Denis O’Brien personally netted €317 million from the sale.

    After exiting the Irish mobile phone market, O’Brien started to compete for mobile phone licences in the Caribbean through his wholly owned company Digicel. Digicel, which has in excess of 4.7 million mobile phone subscribers in the Caribbean, owning[citation needed] nearly 90% of the business. Recently, he set up a new subsidiary Digicel Group Ltd. and via a bonds issue acquired the entire holding of Digicel Limited. He now owns 100% of the company. O’Brien is also rolling out Digicel operations in the South Pacific with operations in Samoa and Papua New Guinea and licenses in the Solomon Islands, Vanuatu and a license in principal in Fiji.

    He owns technology companies, including IrishJobs.ie, as well as Communicorp Group Ltd.

  2. Thanks Manu for this update.
    Heard another rumour again….that a major financier wants to back digicel in PNG. Will see how things develop and let you know.

  3. Yeah…..but I think they will be trying to introduce another market. Something alone the links of wireless network or something like that still using the mobile spectrum of Digicel and it’s network to rural areas. It’s still to hazzy at the moment

  4. Its all hype. Digicel’s network is still less than 30% of Telikom’s and Digicel hasn’t spent the sort of money they are claiming, probably about one fifth of that. Their figures about their staff numbers are also distortions too. They have over 80 expats and total staff ceiling of 320, so that puts their expat staff numbers at about 25% or probably more when you count the expats running around doign their installations.

    Digicel gambled heavily that NA would lose the elections and that the new ICT policy would be trashed by the new Government. Now it looks like NA are back and Digicel are running scared. Pangtel wrote to Digicel revoking their interim licence on Thursday but they ignored it and rushed through their launch. It will backfire but they are hoping that worst case scenario, they sue the government for their losses.

    So far they have just under 10000 people signed up but many people have switched back to Telikom after finding out that they can’t interconnect.

    The phone resellers in Port Moresby are pissed that Digicel have destroyed their market for selling mobiles so they are retaliating by unlocking Digicel mobile phones.

  5. Post Courier 26/07/07

    Minister’s move on licences wrong: Department

    THE Public Enterprises, Information and Development Department yesterday fired a broadside at its own ministerial head over the Digicel saga.
    And the Independent Consumer and Competition Commission lashed out at the Papua New Guinea Radiocommunications and Telecommunication Techni-cal Authority (PANGTEL) over its decision to revoke Digicel’s licences.

    The department’s acting secretary Henao Iduhu said Minister Arthur Somare’s directive was illegal while ICCC Commissioner Thomas Abe said PANGTEL should have consulted the ICCC. While ICCC expressed surprise, Mr Iduhu said under the Telecommunications Act, Mr Somare should not have directed PANGTEL to revoke Digicel’s licence.

    “PANGTEL is an independent statutory organisation that regulates and implements government policy,” Mr Iduhu said. “Under the Telecommunications Act, the Minister cannot direct PANGTEL to revoke the licence of any telecommunication company.” While there is alleged political motivation involved and confusion among the ranks of those state bodies, Mr Abe said: “ICCC is of the view that PANGTEL’s purported revocation of Digicel’s (Spectrum) licence is illegal”.

    Mr Abe said Digicel was issued two licences from ICCC (mobile carrier licence) and PANGTEL (Spectrum licence) respectively, adding a spectrum licence was issued to complement the carrier licence. “There are laws that govern the issuing and the revocation of the two licences and both ICCC and PANGTEL are bound to comply with the law in issuing or revoking those licences,” Mr Abe said.

  6. I think the introduction of Digicel is a good thing namely cos of the competition that it puts up to the former monopoly of telecommunications that was run by Telikom. It creates a better economic atmosphere and almost guarentees reduction in fees by Telikom in order to keep its customers.

    In terms of the legal issues that have arisen, my understanding of it is that Digicel haven’t done a thing wrong, their license was issued by ICCC which obviously means that ICCC sanctioned the license issued by PANGTEL. I believe that Telikom fears competition and a drop in its returns.

    That being said, I intend to stay subscribed to Telikom B-Mobile and subscribe to Digicel until the two networks interact, which I believe is a requirement under the issue of such licenses.

  7. Thanks Ms Dee, I think allot of people are agreeing with you there that competition is good. But ‘interconnectivity’ as you have rightly pointed out is proving to be a pivotal point for some people switching.

  8. Those are my sentiments exactly Miss Dee!Give the people what they want!! I’m all for Digicel being here as competition is the cornerstone of our economic system it forces companies to discover and meet the wishes of customers/consumers. In the end it’s the customers that benefit through lower prices, better quality, better service and increased choices.
    However until ‘interconnectivity’ i’m sticking to my BMobile sim for now.

  9. Although I am not a supporter of foreign owned and operated companies, it is unprofessional to revoke Digicel’s license after they where given the go ahead by Sir Michael and have subsequently invested money into PNG.

    No doubt they will take legal action against the PNG government, Digicel already have string of law court actions against various countries including Britain.

  10. July 19, 2007 – High Court Action by Digicel Against Cable & Wireless Over Unlawful Behaviour

    Digicel Group Ltd (“Digicel”), the fastest-growing wireless telecommunications operator in the Caribbean and new entrant to the Central American market, today issued a claim in the English High Court against Cable and Wireless plc (“C&W”) and various of its subsidiaries, seeking multi-million pound damages.

    Digicel claims that C&W was engaged in illegal behaviour by impeding and delaying Digicel’s entry into various telecommunications markets in the English-speaking Caribbean.

    Digicel also believes that it has been the victim of a co-ordinated effort on C&W’s part to prevent and delay Digicel launching competing mobile telephone networks in St. Lucia, St. Vincent & the Grenadines, Grenada, Barbados, the Cayman Islands, Trinidad & Tobago and the Turks and Caicos Islands.

    The obstructions and delays by C&W, between 2002 and 2006, have resulted in substantial damages and as a result Digicel’s claim covers:

    — Losses of revenue, profits and market share;

    — Restitutionary damages from C&W for the gains and benefits made by C&W as a result of its unlawful conduct and;

    — Exemplary damages (compensation in excess of actual damages) and interest.
    The damages sought by Digicel should amount to several hundreds of millions of pounds.

    It is expected that the claim will come to the High Court in 2008.

    Commenting on the claim Denis O’Brien, Chairman of Digicel, said; “We are extremely frustrated with the continual illegal obstructions that we have encountered from C&W. We believe that a successful claim will not only compensate Digicel for the losses it has suffered but also that it will put an end to the anti-competitive practices of C&W. This will be of undoubted benefit to all network operators and more importantly all mobile users in the Caribbean.”



    For mobile telephone services to be provided by a new provider, it is necessary for them to ‘interconnect’ with any existing telecommunications
    provider operating a public telecommunications network in a territory.
    This is a physical process between two networks, without which customers of one network cannot call customers of another network. Local
    telecommunications legislation in the territories generally provides that any telecoms provider shall not refuse, obstruct or in any way impede
    another provider from making an interconnection.

    In 2000 Digicel identified an opportunity in the Caribbean telecommunications market at a time when liberalisation and the introduction of competition across the region were underway.

    Digicel particularly identified a potentially lucrative opportunity in the mobile telephone market in the Eastern Caribbean region because there was a low take-up of mobile phones within the residential population and Digicel was able to offer more modern technology and a better service than the monopoly provider, C&W.

    Digicel recognised that a quick launch into the new market was important to coincide with the peak time for acquiring mobile phones (Christmas) and to attract new potential subscribers.

    In 2000/2001 Digicel launched its mobile telecoms business in Jamaica very successfully, acquiring the necessary licence and achieving
    interconnection, albeit after experiencing some initial resistance from C&W, who until then had enjoyed a monopoly as sole provider. Digicel
    established its new GSM mobile network rapidly and achieved a high degree of market share very quickly.

    Planning to expand into countries affiliated with the Organisation of Eastern Caribbean States (OECS – St. Lucia, St. Vincent & the Grenadines and Grenada) and Trinidad & Tobago, Barbados and Guyana, Digicel created operating subsidiaries in the territories identified above with a view to obtaining licences or concessions to operate mobile telecoms networks on these islands.

    In the period from 2002 to 2006, Digicel was awarded licences to establish mobile telephone services in the territories which are the subject of this claim, and in each case immediately started the process to facilitate interconnection with C&W.

    Without exception, in each territory, Digicel experienced resistance and obstruction from C&W. Indeed, in 2002 an internal strategy document produced by C&W revealed that C&W was intentionally delaying Digicel’s entry into these markets for as long as possible. This strategy, and the actions it gave rise to, clearly breached C&W’s statutory duties.

    In St. Lucia the launch by Digicel was delayed from before Christmas in 2002 until late March 2003; in SVG the launch was delayed by over 6 months; in Grenada it was delayed by 5 months; in Barbados by over 6 months; in Cayman by over 2 months; in Trinidad & Tobago by at least 4 months and in Turks and Caicos the launch was delayed by over 3 months.

    Aside from lost market share and future profits, Digicel lost revenue from call charges and interconnection fees payable by C&W in respect of inter-network calls originating on C&W’s networks, costs and expenses arising from the unlawfully protracted process of interconnection in each territory, costs and expenses arising from the delayed launches, and lost management and staff time dealing with C&W’s unlawful behaviour. The claim is expected to total some hundreds of millions of pounds.

    Visit http://www.digicelgroup.com for more information on Digicel.

    Tim Brown
    Mere Consultancy for Digicel
    Tel: +44 (0)7880 747474
    E-mail: tim.brown@mereconsultancy.com

  11. Same thing happening in PNG, why didn’t they set up “interconnection” prior to starting their business in PNG?

  12. It seems Digicell are not new to the kind of “problems” they are facing in PNG right now, where Tekikom PNG has been the sole provider of mobile phone services. So it seems by law Telikom PNG has the obligation to allow interconnectivety with Digicel.

    I think the longer this marketing war goes on, Telikom PNG and the state may end up paying millions of kina to Digicel. So why not fascilitate their entry into the PNG mobile phone market and compete with them. It’s about time Telikom PNG grow up and be part of the globalisation process. Instead of running back to the government for protection everytime it feels threatened!

  13. Seamus Lynch said something in the likes of the people have voted with their feet, judging by the strong growth in sales. I guess it’s good for a start in areas of coverage, but this only represents the portion of Papua Niugini that have access to the Digicel network & products. Denis O’Brien is a genius, if his company doesn’t make the returns he expects, he’ll get it through the courts. I have to agree with ‘miyet’ that there’s a lot of hype surrounding Digicel, but if this is good then the best is yet to come, lawsuits & all!! Watch that Digicel space!!

  14. Here is something I found while surfing on the net

    Anthony Upton
    10 July 2007

    Digicel Samoa Ltd is remaining tightlipped about claims it is suing Government and Telecommunications Regulator, John Morgan.
    “I can’t comment, I’ve got someone else whose going to call you soon,” Commercial Manager Pepe Christian Fruean said.
    That “someone” was Marketing Manager, Henry Tunupopo.
    “Digicel will not make a comment in connection to the dispute out of respect for the corporate Samoa,” Mr Tunupopo said. “That’s all I can say.”
    Regulator Mr Morgan said he was not in position to talk, referring questions to the Office of the Attorney General.
    At the weekend, Digicel’s competitor, SamoaTel claimed Digicel is suing Government and Mr Morgan to try “to force interconnect prices up, meaning calls to Digicel phones from home and business phones could get more expensive.”
    SamoaTel said this was Digicel’s response to Go Mobile’s rising popularity. SamoaTel claimed that after six months, Go Mobile “has led the market in share of growth with cheaper prices and innovative solutions.
    “In response Digicel has resorted to suing the government of Samoa, trying to effectively increase call to mobile prices.”
    Rebecca Wendt, of the Attorney General’s Office, confirmed that a hearing has been set for Friday.
    She said Digicel has asked the Court to review Mr Morgan’s decision to set an interconnect rate. She said Digicel was not suing neither Government nor Mr Morgan.
    “Digicel has only applied for a review of one of Mr Morgan’s decisions. I can say that the Government of Samoa is not a party,” Ms Wendt said.
    She explained that Digicel has made an application to the Court under the Telecommunications Act 2005, where a company can apply for a review of a decision affecting them.
    SamoaTel’s Manager of Business and Consumer, Justin Caswell was highly critical of Digicel’s Court application.
    “The Regulator recently made a determination that the interconnect prices to call Digicel mobiles is too high and should reduce immediately, after getting international subject matter experts to review network costs. Digicel apparently didn’t like this determination because it means prices to the Samoan people reduce and their profits come down, so they sued Samoa,” Mr Caswell said in a statement.
    “They have a habit of resorting to what I could consider as coercive legal actions throughout the Pacific and Caribbean with Governments once they get a licence, so this is no surprise really – it is how they do business. You only have to type ‘Digicel sues’ into Google to see this – I get 176 very interesting hits.
    “We agree with the Regulator that calls to mobile prices should be lower as the current prices are too high, and we are committed to reducing them.
    “That Digicel resort to courts to try and push up the cost of living while SamoaTel pushes prices down is fine with us – customers should simply move to Go Mobile for better value. We only charge 27 sene per minute to call Go Mobiles – unless they go to court to try to put our prices up too, which I wouldn’t put past them.
    “Maybe we can provide cheaper prices to the people of Samoa because we don’t have so many $2,000 per month billboards to pay for and we don’t send all of our profits offshore.
    “From our view, whilst we firmly support the government’s stance, we aren’t the party being sued, so while the others have their shenanigans in court we’re happy to compete in the market and get more customers.
    “Competing in the market means prices come down and the people of Samoa benefit, and in a funny way I believe it is more honest to our customers than resorting to these interesting legal actions of the other guys.”

  15. Hi, I’ve tried sending text messages to Australia, Canada & US using digicel, but it says unable to send.. Does that mean, its not working?? Please help..

  16. This story re Digicel’s sponsor of Usian Bolt appeared in one of the Jamaican newspapers today. It does pay to sponsor athletes as does BSP with Ryan Pini..

    Wellesley Bolt’s trip to China a masterstroke

    Franklin Johnston
    Tuesday, August 26, 2008

    Mr Usain Bolt’s corporate sponsors, Digicel Jamaica, must be commended for insisting that his father, Mr Wellesley Bolt, make the trip to Beijing, China to celebrate his son’s success at the Olympic Games.

    For in so doing, they acknowledged the most important element of the father/son relationship… being there when it mattered most.

    Yes, Mr Bolt senior could have stayed home and followed his son’s celebration via technology. And but for the insight of this corporate entity, he probably would have.

    But he would have missed out on one of the most important milestones in his son’s life, and nothing, no number of phone calls, no video-link, nothing could have compensated for that.

    We highlight the company’s gesture because we think it makes the type of point that many fathers in Jamaica need to get, namely that fathering and raising children is a hands-on job that requires the personal touch. This is not something that can reasonably be questioned. It is a fact, ratified by numerous sociological studies, that the presence of a positive father figure does psychologically for children that which nothing else can.

    According to Mr Bolt Snr, who is quoted in today’s edition, the first thing that his son wanted to know was how he felt. They hugged and everything was ‘great’.

    We in our capacity as spectators may never be able to fully understand the transfer of emotions that must have taken place via that hug. But as fans of the man – our man – who has given Jamaica more reason to celebrate than we have had in recent times, we can well imagine how priceless the feeling must have been. For we’re all feeling big and proud as a result of Usain Bolt’s achievements. And even those of us who have never met him would gladly, given the chance, pump his hand and express our personal congratulations to him for shattering the 100m and 200m world records at the just-concluded 29th Olympiad and for his role in helping our 4x100m team win the gold medal in a new world record time. How much more so the man who has known and loved him since birth?

    This space has often emphasised the psychological importance of the family bond and the value it holds for the restoration of this society, which is being sorely undermined by a generation of merciless young hoodlums.

    These young terrorists maim and murder in a futile attempt to satiate the anger and loneliness triggered and bred by an unfortunate failure on the part of their parents to just be there for them, to love them, to give them the approval that every child craves and thrives.

    We therefore appreciate the opportunity that Digicel Jamaica has provided for us to reiterate the point which cannot be considered overstated until every father in Jamaica begins to live up to the role which is, in huge part, responsible for enabling stars like Mr Usain Bolt to fulfil their potential.

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