Lavern Clarke, Business Editor
David Hunter, new CEO of Digicel Jamaica
David Hunter has been a month in the job, not enough time, on the face of it, to fully absorb the Jamaican mobile market.
But even before he landed in Kingston to take over as chief executive officer of Digicel Jamaica, his most immediate task was clear - positioning the company to safeguard its market against America Movil and other rivals.
Hunter in his first media interview here said Digicel's business focus would be immediate improvement in cellular coverage of the island, better quality customer service, strengthening of the brand, and rolling out new products - all backed by serious capital investment.
"It is a case of continuing to do what we do," Hunter said, an indication that he plans no serious upheavals at the company.
Immediately, he takes charge of a US$100 million (J$7.1 billion) investment budget that, this year, will finance the defence that the company is throwing up around its 1.9 million subscribers, who, for the financial year that ended March 31, by Financial Gleaner estimates, earned Digicel approximately US$469 million.
That, however, is on the assumption that Digicel Jamaica's share of the projected US$1.47 billion of group revenues holds at the 32 per cent level it reported for the period September 2006 to September 2007.
Hunter inherits the team that predecessor David Hall led, but he also has a new man in charge of marketing, Junaid Munshi, who took up office as commercial director on Monday, replacing Harry Smith, who has gone to teach at the business school at the University of the West Indies, Mona.
"I am happy with the team," said Hunter. "I have a great team."
The US$100 Hunter has to spend will, he expects, buy him 117 new cell towers, which should allow for 98.4 per cent mobile telephone coverage of the island. All the new towers should be up and running by next March and will be added to the near 1,000 already in place. Some of the cash will go towards improving the network and for rolling out new services, like consumer wireless broadband, or WiMAX, which, after two years of planning and meandering through the process, now has regulatory approvals.
Assuming Cabinet signs off on the spectrum licence, as was expected this week, consumer wireless broadband - built on 4G technology that can deploy the service not only to laptop computers but also hand held devices at four times the current speed - is to be rolled out in all 14 parishes.
Broadband market
Digicel has been delivering this service to corporate markets since July 2006.
"The market for broadband is less than 10 per cent," said the Digicel executive. "We hope to double that in 10 months."
Residential WiMAX is to be offered in the summer, employing the same marketing strategy that the company used to "enable" its phone business - cheap hardware needed to consume the service, in this case laptops.
But even before that, Digicel plans to take its market to the 'edge', or more precisely introduce technology that delivers data to mobile devices much faster, mostly for the benefit of the subscribers of Blackberrys and other high-end phones.
Edge, or Enhanced Data GSM Environment, is a faster version of GSM that is capable of delivering applications such as video at faster transfer rates of up to 384 Kbps.
In four weeks: "Everywhere in Jamaica is to Edge-compliant," the Digicel executive said.
Later, a new website is to be introduced, backed by interactive voice response or IVR technology. The IVR system, which is similar to that used by banks for account queries, allows communication between a computer database and customer via a touch-tone telephone.
Hunter, who appears less ebullient than Hall and his predecessor Seamus Lynch - though its early days yet - played it straight in the interview, offering no bluster and indicating healthy respect for the competition he faces, even while asserting that Digicel, and the team in place, were well positioned to hold rivals at bay.
We're not worried
America Movil, the new owner of MiPhone, will offer a "good challenge," he said. "We're not worried."
MiPhone has been quiet about its plans, but Digicel anticipates an aggressive roll out of service by the Mexican-based company.
For six months, over the period October to March, Digicel Jamaica in expectation of that challenge had worked on a plan to be executed at the appropriate time. The team, said, Hunter is ready.
But he is also not underestimating old rival Cable and Wireless Jamaica, whose new president Phil Green has also mostly kept his head down since his August 2007 appointment . But quietness does not necessarily man inaction. Green has been busy rebranding the company's outlets into 'lifestyle' stores, geared to deliver a different retail experience.
Green, too, is overseeing a $2.8 billion cell tower programme to build out 120 new sites islandwide.
"There is every opportunity for them to get back in the game," said Hunter. "With Green, that could change overnight."
Movil is similarly building out 800 cell towers to boost its network and is in the process of revising partnerships struck under the old owners, Oceanic Digital.
Hunter said Digicel expects Movil to launch big when ready.
Strong market lead
But the company's concern appears not to rest so much on how big MiPhone can get - at an estimated 220,000 MiPhone subscribers at acquisition last year, Digicel has a strong market lead - but whether the growth of a new rival will eat into its share of mobile business.
Jamaica, with a population of 2.7 million, has just as many cellphone subscriptions - Digicel 1.9 million; Cable and Wireless Jamaica 660,000; and MiPhone 220,000 at acquisition last year - an indication that users straddle networks.
But Hunter points out that the wireless broadband plan - which he signalled is to be marketed aggressively in parishes outside the capital - and other products to come on stream, are likely to create fresh markets for his company, allowing Digicel to grow and offset any loss of revenue in other business segments.
The lesson that Hunter tried to impart is that while the market may appear to have peaked, there are opportunities to be exploited.
Digicel has always "grown by growing", and in that vein, Hunter said, the company of more than 900 employees, would not be contracting.
"There is no plan to cut anything," he told the Financial Gleaner.
Slowing growth
Still, the company whose revenues have grown consistently over seven periods since its introduction, at an annual rate of 58 per cent according to Financial Gleaner estimates, is showing signs of slowing growth.
Within its own family, Digicel Group which straddles 24 markets, the Jamaican operation's share of topline income has been falling. At September 2007, its share of revenues was down to 32 per cent of group, a 12 point or by 27 per cent drop relative to September 2006.
Its midline performance, or share of operating profit, has not been disclosed by Digicel, but assuming it tracks close to revenues, Jamaica could well have contributed about US$130 million or more than J$9 billion to the group's projected US$434 million (J$30.8 billion) of earnings before interest taxes depreciation and amortisations or EBITDA.
Markets like Bermuda and Cayman Islands already outpace Jamaican subscribers in spend, referred to as average revenue per user or ARPU, while Haiti is well ahead in subscriber numbers at 2.2 million.
Bermuda market
But Hunter, who has been credited with taking his company to the top of the Bermuda market, when asked how he plans to pull Jamaica ahead, reiterated that the company would continue to invest in its core network, remain community focussed through sponsorships and its foundation.
The company continues to hold up the consistent high grade it gets for customer service in independent surveys, but says it plans to deliver an even better customer experience through product introductions like Edge.
Digicel Jamaica in seven years has invested US$750 million in developing its network here. Its 2008 spend will take it to US$850 million.
lavern.clarke@gleanerjm.com
