Digicel Group CEO Colm Delves. - File
Digicel Group has set its sights on Costa Rica, a market that telecommunications watchers say is ripe for exploration by big players, following passage of new legislation that paves the way for competition in mobile services.
Signals Telecom Consulting, which tracks regional developments in the sector, said in a June paper that Digicel, America Movil, Millicom and Telefonica were the most likely candidates to go after market share in Costa Rica, where spending is expected to surpass US$5.9 billion within five years.
"Yes, Digicel is interested in entering the Costa Rica market as part of our overall expansion across Central America," said Maureen Rabbitt, group spokeswoman for the mobile company. "We see strong opportunities for growth in the Central American market with young populations, strong economies and low mobile penetration rates."
No immediate foray
America Movil (AMX), however, says it was not looking at an immediate foray into Costa Rica, whose regional markets span 18 countries in the Americas.
"I can tell you that AMX evaluates periodically investment opportunities in the telecomm sector," said the company's head of corporate communications Patricia Ram'rez, by email from Mexico City.
"Today, there are only a few countries that are not included in the company's operations footprint in the Americas, Costa Rica, one of them. It is important to understand that this country, particularly right now, cannot be considered as an option for the company as it's regulatory environment does not permit private/foreign investors in telecommunications."
Rabbitt would not comment on the specific plans for Costa Rica, saying they were at the early stage.
No launch date yet
Digicel, which had its beginnings in Jamaica, already has operations in El Salvador and licences for Guatemala, Honduras and Panama. Digicel has not set a launch date for the latter two markets, saying only it would be "as early as possible".
The company is already a powerhouse in the Caribbean, with 6.54 million live subscriber accounts in 23 markets - 1.9 million of them in Jamaica, and about 2.2 million in Haiti - representing growth of 39 per cent in a year to March 2008.
"We're very excited about our ability to sustain growth oppor-tunities in existing markets while picking up momentum in new ones, and we've had one of our most successful financial years to date," said Colm Delves, Digicel Group CEO, in a company statement. "We will continue to put our customers first by offering them better value, world-class customer care, new technology, innovations and attractive offerings based on the strength of our network."
Digicel's current focus is on growing organically, that is, through new products and services.
In Jamaica, where mobile subscriber growth has slowed to a crawl, the company has set sights on consumer wireless broadband (WiMax) as its next target market.
Rival company America Movil, which owns MiPhone in Jamaica, has some 11.6 million subscribers across Central America and the Caribbean.
Digicel Jamaica's plans to expand into consumer broadband continue to be held hostage to the pace of the authorities, and up to Tuesday, Digicel Jamaica was still awaiting final word from the Spectrum Management Authority, which is in the process of auctioning spectrum licences on a 2.5 GHz band.
Those licences are divided into two categories - one that facilitates WiMax, while the other allows for wireless broadband plus video services, according to a paper written by Jose Otero, president of Signals.
Value and service
"Digicel is looking forward to offering the same kind of choice and value in our WiMAX voice, data and Internet services to the consumer market as our corporate customers in Jamaica have enjoyed in the past year," said Rabbitt.
"Also, our recent interconnect agreement with Cable & Wireless now means that our corporate WiMAX customers can now connect with C&W numbers through our voice services."
Signals' analyst, Elias Vicente, author of the June paper, says real opportunity exists in Costa Rica, where mobile penetration is low at 40 per cent teledensity.
Undercut competitor
The telecoms consultancy, which is based in Buenos Aires, Argentina, expects that the opening up of the Costa Rican market, facilitated by the passage of Ley General de Telecomunicaciones or the new General Telecommu-nications Law, will undercut the business done by domestic player ICE, or the Instituto Costarricense de Electricidad.
But the agency also projects that new players will go after market share aggressively, in the process fuelling annualised growth of 20 per cent over the next five years, and pushing sector revenues beyond this year's projected US$600 million to more than US$1 billion per year between 2010 and 2013.
"Mobile telephone invoicing levels will surpass US$5.895 billion mark for the same period (2008 to 2013)," said Vicente.
Signals also paints Costa Rica as a lucrative opportunity for major telecoms groups to "fill out the remaining gaps on their Central America operations maps", saying the market already has the highest average revenue per user in Central America.
business@gleanerjm.com
A Digicel facility in Haiti, the group's largest Caribbean market. Digicel Group reported on Tuesday that its subscriber base had grown 39 per cent in a year to 6.54 million. - Ap
