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Bringing Cell Phones To the Third World
An anonymous reader tips a story about Denis O'Brien, a mobile phone entrepreneur whose goal is to spread cell phones throughout third-world countries. Quoting:
"...O'Brien keeps pouring money into the world's poorest, most violent countries. His bet: Give phones to the masses and they'll fight your enemies for you. ...In Trinidad & Tobago, where the state mobile phone firm was dragging its feet on connecting Digicel calls to its own customers, O'Brien harangued government officials to speed things up, even phoning one Christmas night to complain. After the launch the state firm started dropping Digicel calls anyway, making its new competitor look bad. O'Brien took his case to the people, taking out ads in T&T's papers listing life 'Before Digicel' and 'After Digicel' and held a press conference. The state firm eventually relented. In its first four months Digicel bagged 600,000 customers and is narrowing the gap now with the state in market share."
Cause that's what they need...cell phones. Nevermind the maniacs running those countries...
Good communication can help struggling economies a lot. I'm not familiar with Trinidad & Tobego, but in Africa, cell phones are quite popular.
The Caribbean operations backing his bonds just announced US$505 million in operating profit (earnings before interest, taxes and depreciation), double the year-earlier figure, on US$1.6 billion in revenue for the year ended in March.
And if you subtract the interest, is the company still making a profit? Red flag: mentioning Operating profit as opposed to profit.
Another red flag: In April O'Brien was in the midst of a five-day, four-country visit (via his Gulfstream G550) to keep tabs on his assets.
Interesting. A private jet.
He's in poverty stricken countries. He's grabbing lots of market share as fast as he can with dubious earnings potential (what? will he take a chicken as payment if these poverty stricken folks can't pay?). He's doing all of this with other people's money.
Does that sound like another business plan we've heard of? Maybe 7 or 8 years ago?
Or farmers can call a couple of different markets to see what price their crops will fetch instead of just picking one and hope it works out...
There was a post here in a similar discussion a few months back, some guy who had lived in the 3rd world in the Peace Corps gave a few reasons he'd rather have a cell phone than running water.
The introduction of cheap cell phones kills any incentive for the government to push any landlines (or upgrade those already existing) outside of the main cities. Without landlines, there's no internet. A good example is is Bali, Indonesia. Bali is one of the most advanced (and richest areas of Indonesia) and yet in many areas just 3 miles outside of the main cities there are no landlines and no internet. There's also very, very spotty cell coverage. If say, you have a small guesthouse or crafts company, there's no way you can advertise or communicate with your customers.
"The average reporter we talk to is 27 years old......They literally know nothing." - Ben Rhodes
I'll bite - I happen to work for one of the core suppliers for Digicel, and I've been to most of the sites (in both the Caribbean and South Pacific). Yes - he makes billions. Yes, the 3 core technology suppliers (E//, HUA, RKN) make millions each year.
Guess what - the people in those countries are most grateful. You guys talk about Bell monopolies? Have you ever been to a dot of a country in the SP where whole villages share one phone line? Or in the Caribbean where monopolistic government incumbents charge twice the prevailing rate in the US for phone calls?
Digicel brings in infrastructure, very reasonable rates customized for each market, and AMAZING customer service, better than the you find in telco's in the NA and EMEA. "Pouring money" is exactly what he is doing. Papua New Guinea - site rollout complete, core and BSS rollout complete, hundreads of millions invested. And the government hints it's going to pull the license. Trinidad - 3 years battling the authorities to get a license to introduce competition into the market. I would say he's pouring money in where no one else dares to.
If they were selling crap, the markets would respond by not buying. You think the iPhone and PS3's create launch lineups? Deal with 1,500 Samoans lining up outside an outlet store to get a SIM card..
Does he give out money for food and medicine - no. But in these markets, it doesnt make a difference. Corruption prevails, and funds for those things would disappear into the ether before they ever made it to the people who needed it.
And before you go on ranting about being an outsider looking in - I grew up in one of those countries. I remember paying $200USD/ mth for 20 hours of 'net access (yes, I was a little better off..). I can tell you this - all of those places are much better off with healthy competition and excellent communication infrastructure.
So - the guy has balls to go in to some of the most inhospitable places on the planet, deliver excellent services, and overall make a buck from it - I say that's a fair deal.
Altruism doesn't make the world go round - money does. The best business models in my 10 years of experience are those that make money while delivering a product or service that improves improves the living/ working standards of the intended market. That's exactly what O'Brien is doing.