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Providing Wireless In the World's Most Dangerous and Remote Places

Posted by samzenpus on from the 5-bar-volcano dept.

grcumb writes "The Economist magazine is running a brief profile of Digicel, a 'minnow' in the wireless telecoms market that has distinguished itself by setting up shop in some of the most unlikely (and dangerous) markets in the world, including Haiti and Papua New Guinea, whose capital, Port Moresby, has one of the highest murder rates in the world."

40 comments

  1. port moresby by Anonymous Coward · · Score: 1, Interesting

    reminds me of where in the world is carmen sandiego

    1. Re:port moresby by tuxgeek · · Score: 1

      Well, in port moresby, carmen has been murdered and parts sent via fed ex to san diego
      all thanks to the new wireless network, which made carmen easier to find

      --
      "Suppose you were an idiot...and suppose you were a member of Congress...but I repeat myself." Mark Twain
  2. Most dangerous? by santax · · Score: 3, Funny

    I dare him to make a regular - wired - connection to my mother in law. Then they will know what dangerous truly means!

    1. Re:Most dangerous? by Anonymous Coward · · Score: 0

      I dare him to make a regular - wired - connection to my mother in law. Then they will know what dangerous truly means!

      Or to my wife, for that matter.
      You don't want to be in any kind of contact with her, physical, wired or wireless, at the PMS time of the month.

    2. Re:Most dangerous? by Anonymous Coward · · Score: 0

      Based on Wikipedia the 5 places with highest homicide rate are

      El Salvador, Honduras, Jamaica, Guatemala and Venezuela.

      http://en.wikipedia.org/wiki/List_of_countries_by_intentional_homicide_rate

    3. Re:Most dangerous? by riT-k0MA · · Score: 1

      (Yes I know you're talking about countries)
      Obviously you've never been to Johannesberg or Cape Town. What I find funny is Durban is by far more dangerous than CT (I know from experiperience) and never gets a mention.

  3. Telecoms is supply-driven by grcumb · · Score: 4, Interesting

    Original submitter here.

    The point I find most interesting in all this is that Digicel succeeds by defying conventional wisdom about supply and demand. They simply create supply and trust local demand to rise. Here's the second paragraph of the original submission:

    "If you just focus on risk, you can't do a thing," said Digicel's billionaire president Denis O'Brien in a 2008 Forbes profile. But O'Brien's small-market revolution should teach us another lesson, too: Traditional economic analysis doesn't work when it comes to communications. Telecommunications is a supply-driven economy. If you build it — no matter where you build it — they will come.

    --
    Crumb's Corollary: Never bring a knife to a bun fight.
    1. Re:Telecoms is supply-driven by evilviper · · Score: 3, Informative

      Digicel succeeds by defying conventional wisdom

      Considering that TFA says they are $4.3 billion debt, and trying to take their profit out of $3 phone cards, I'm not so sure I'd say they are succeeding AT ALL.

      --
      Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
    2. Re:Telecoms is supply-driven by initialE · · Score: 1

      Nine out of ten that is a business plan likely to fail. You may not remember the dot-bomb years, but it was all about that.

      --
      Starbucks, Harbuckle of Breath.
    3. Re:Telecoms is supply-driven by grcumb · · Score: 4, Informative

      Digicel succeeds by defying conventional wisdom

      Considering that TFA says they are $4.3 billion debt, and trying to take their profit out of $3 phone cards, I'm not so sure I'd say they are succeeding AT ALL.

      No, you're reading that wrong. Yes, they are carrying debts of $4.3 billion, but their operating profits are quite tidy. Almost all of the debt is capitalisation in new markets, which means their prospects are quite good, provided they don't do anything stupid.

      Digicel SIM cards here in Vanuatu are $US 5.00 each, and they currently have over 100,000 active accounts in a country whose entire population is only 235,000. I've seen some numbers about their call volumes and I can assure you that their national operations are profitable.

      --
      Crumb's Corollary: Never bring a knife to a bun fight.
    4. Re:Telecoms is supply-driven by R3d+M3rcury · · Score: 1

      Many companies go into debt in order to build things. The big question is are they making money to pay off that debt? The smaller question, assuming the answer to the previous question is "yes", is how long will it take?

    5. Re:Telecoms is supply-driven by petermgreen · · Score: 1

      and the third question is if the answer to the first questions is yes and several years at best is will a larger competitor muscle in and push them out of the market (either though legal/political means or through dumping services for a while) before they make their investment back.

      --
      note: i'm known as plugwash most places but i screwd up registering that here somehow in the past and now can't register
    6. Re:Telecoms is supply-driven by R3d+M3rcury · · Score: 2, Interesting

      The "dot-bomb" fails were a quest for market-share above all else. "If we build it, they will come, and then we'll figure out how to make money." That's why the "???" shows up in that particular business plan meme.

      Consider that it takes a big hunk of money to build a cell tower and connect it to the local telephone system. But actual operating costs are pretty low. So most of the money they make selling access is profit. Also, there aren't too many companies competing in these markets, so you can pretty much set prices as you want, based upon local conditions. Obviously, $70-per-month phone plans aren't going to work where the average person makes $700-per-year. But if you can talk 100,000 people into paying $3 per month (or 5% of their monthly income), that's $300,000 per month or $3.6 million per year. Again, with low expenses, that can be mostly profit.

    7. Re:Telecoms is supply-driven by Anonymous Coward · · Score: 0

      Actually the "???" shows up in that meme due to the underpants gnomes...

  4. Digicel is in Tonga by Anonymous Coward · · Score: 5, Informative

    This post was made from a Digicel connection from my yacht (currently in Tonga).

    Digicel works better than some Pacific internet connections. It isn't fast, but no connections are out here. It is relatively affordable: eight hours of internet time in Tonga is ~USD15, while eight hours in French Polynesia is about EUR40 (USD55).

    1. Re:Digicel is in Tonga by RMH101 · · Score: 2, Funny

      You're posting from a yacht in Tonga? A million basement-dwellers salute you.

    2. Re:Digicel is in Tonga by tehcyder · · Score: 2, Insightful

      This post was made from a Digicel connection from my yacht (currently in Tonga).

      Taking a break from the champage, coke and hookers eh?

      --
      To have a right to do a thing is not at all the same as to be right in doing it
  5. danger by Anonymous Coward · · Score: 1, Funny

    How do they get wireless routers to operate in an environment filled with so much fear? I'd be dropping packets left and right. "Is that guy going to kill me?! checksum error." "That guy has a knife! No route to destination." Packet, packet, packet, pac--ARGH, THEY GOT ME!

    1. Re:danger by grcumb · · Score: 4, Informative

      How do they get wireless routers to operate in an environment filled with so much fear? I'd be dropping packets left and right. "Is that guy going to kill me?! checksum error." "That guy has a knife! No route to destination." Packet, packet, packet, pac--ARGH, THEY GOT ME!

      Heh, yeah. Here in Vanuatu at least one tower was dragged down by locals because of a land dispute.

      By and large, though, people tend to protect the things they value. This Forbes profile of Denis O'Brien reports that, during a period of rioting and looting in Haiti, people actually guarded the towers, because they saw Digicel as being on their side.

      --
      Crumb's Corollary: Never bring a knife to a bun fight.
  6. interesting definition of billionaire by citizenr · · Score: 2, Interesting

    said Digicel's billionaire president

    hence Digicel's $4.3 billion debt

    --
    Who logs in to gdm? Not I, said the duck.
    1. Re:interesting definition of billionaire by delirium+of+disorder · · Score: 1

      The president may be a billionaire, while the company he manages has spent more than it has brought in. BTW I wonder how they plan to get out of a 4.3 billion dollar hole. US Cellular, which operates in a much wealthier, more mature market, has a revenue (total business) of only $3.93 billion and a net income (profit after expenses) of only $216 million.

      --
      ------ Take away the right to say fuck and you take away the right to say fuck the government.
    2. Re:interesting definition of billionaire by DerekLyons · · Score: 2, Insightful

      Being a billionaire means you have billions of dollars worth of assets, the debt or lack thereof of a company you work for is utterly irrelevant.

    3. Re:interesting definition of billionaire by tehcyder · · Score: 1

      Being a billionaire means you have billions of dollars worth of assets, the debt or lack thereof of a company you work for is utterly irrelevant.

      Being a billionaire means you have billions of dollars worth of net assets. The debt or lack thereof of a company you work for is utterly irrelevant unless the value of shares that you hold in that company is included in your calculation of your net assets.

      --
      To have a right to do a thing is not at all the same as to be right in doing it
  7. Fluff article by Alwin+Henseler · · Score: 2, Insightful

    I fail to see the 'unconventional' here - as if people in [underdeveloped country of your choice] don't want to talk to each other. Or somehow network effects or being able to connect to the rest of the world doesn't count, just because your cell tower is the first in the area.

    So you can't really say Digicel created such market(s) IMHO. It's more like the market did exist, and (by taking a big risk) they where the first to crack it open. Kudoz to them for having the balls, but that's about it. What it does show, is that (potentially) you can sell telecoms gear anywhere where there are people. And in a booming market, no less. Oh wait... news at 11.

    Likewise, the article's premise of 'build infrastructure & clients will come' is nonsense. Put cellphone network in the middle of the Atlantic, and all it will do is sink.

    1. Re:Fluff article by hjf · · Score: 2, Interesting

      I see it more as a matter of underestimation. Most companies only want to invest where they can be sure they will make a profit. Or better said, where they were supposed to make a profit (in case their business plan fails).

      I live in one of those economies where companies don't want to invest. Here in Argentina, only recently the XBOX360 has appeared in large retailers, only after Sony took the first step. Microsoft saw that Sony was selling the PS3 so they decided to bring the XBOX. But Sony didn't just decide to sell PS3s because they like challenges. No, they started selling them after online auction sites sold LOTS of PS3s (which they still do), and Nintendo attracted the casual gamer to the Wii.

      The problem is, both the 360 and the PS3 are priced at ARS3000, which is almost USD 800. One has to wonder why they can't offer the product as the same price as in USA. In fact, most online auction sites sell the consoles at half price (still making a huge profit). It's just that companies don't want to take risks, or they make wrong assumptions. For example, the console "for the third world" (Zeebo). What's the point of that? There's like 40 games for that piece of crap, why the hell do they even bother to develop that thing?

      Another story is what happened here with the Motorola Milestone (USA: Droid). We weren't going to get the update to Android 2.2 because "people here are not ready for that update", this was said by a CEO of Motorola for Argentina. WTF? A few thousands of angry tweets (#motoFAIL) and the Milestone (which goes for about USD 300-500 here, depending on your plan), and Motorola decided to allow Latam to get the upgrade to 2.2. I still don't understand that move. USA had the update, Europe and Asia will get it, but we weren't going to. Why? It's just software, it's already been developed, why don't release it here too?

      So you can see why some things you take for granted in the "first world" aren't even heard of here. Not only we get things 2-3 years later, we get them for 4x the price (even high taxes would count for only 2x the price). They get no promotion (I haven't seen any ads for the Milestone on TV), and are sold as luxury items. I think Motorola's plan with the Milestone was trying to force you to get the Milestone 2 (Droid X) because that one will come with Android 2.2 from factory. Me? I wouldn't buy that crap. After motorola tried to fuck me like that, I'm switching to something else. Also, we're starting to get digital TV on air (it began only a couple of months ago, with Brazil's derivative of Japan's ISDB), so I expect some Japanese sets (Brazilian versions) to start showing up here.

    2. Re:Fluff article by MaWeiTao · · Score: 3, Informative

      The problem is, both the 360 and the PS3 are priced at ARS3000, which is almost USD 800. One has to wonder why they can't offer the product as the same price as in USA.

      Companies don't arbitrarily decide to charge more for products, especially in a country with a lower standard of living than the US. Products are expensive because of taxes and import tariffs. Argentina has a 21% VAT. Retail goods are also subject to a 3% anticipated profits tax. Those are the ones I could dig up quickly. There are a variety of other taxes imposed on goods.

      For good or ill the US doesn't tax imported goods all that heavily. It's why imported products cost nearly as much as they do in the country of origin. If you're in a country where stuff costs twice what it costs in the US chances are it's the fault of your government.

    3. Re:Fluff article by complete+loony · · Score: 0

      Companies don't arbitrarily decide to charge more for products

      Tell that to Blizzard. Starcraft 2, $90 AUS (currently $85 USD) vs $60 USD for the US version.

      Some apple products used to value the AU/US exchange rate at about 0.50 when it was 0.90 or so. But their site seems a bit better now.

      --
      09F91102 no, 455FE104 nope, F190A1E8 uh-uh, 7A5F8A09 that's not it, C87294CE no. Ah! 452F6E403CDF10714E41DFAA257D313F.
    4. Re:Fluff article by hjf · · Score: 1

      Imported goods have up to 50% tax. Products "made" in the country (even "assembled" here counts as "made". I doubt we have the technology to produce Motorola Milestones, yet mine says "made in Argentina". "Packing" it here seems to be enough to call it "made" and avoid a few taxes)

      "Computer" products, that run with electricity (that is: computer, processors, ram sticks, power supplies- but NOT blank media, cases, mousepads, etc) have 10,5% VAT (They were trying to raise it to 21 but I don't know what happened with that).

      Still, this is not about taxes. 4x the retail price of US is not about taxes. As I said, imported products have roughly 50% tax, of which the 21% VAT is already included.

      Companies arbitrarily decide to charge more for certain products, especially in a country with lower standard of livings. Because they think "third world" means a village in the middle of nowhere, with no water or electricity. So whoever has enough money to buy such a trivial product as a "game console" HAS to be rich, because in such an economy, a game console is a luxury item. And everyone knows luxury items are more expensive (such as $300 designer jeans, caviar, smartphones, or game consoles).

    5. Re:Fluff article by paeanblack · · Score: 1

      Companies arbitrarily decide to charge more for certain products, especially in a country with lower standard of livings.

      It's not arbitrary. Look at the UN statistics for income distribution:

      The earnings ratio between the top 10% and the bottom 10%
      Argentina: 40.9 United States: 15.9

      Between the top 20% and the bottom 20%
      Argentina: 17.8 United States: 8.4

      While there may be a smaller percentage of Argentinians who could afford an XBOX360, even if it were sold at cost, those Argentinians who can afford one are able to pay more.

      This just in: suppliers in an industry with little competition will charge whatever prices the market can bear. Companies set prices in an attempt to maximize profits. Film at 11.

    6. Re:Fluff article by hjf · · Score: 1

      Game consoles aren't for the top 10 or 20%. They're supposed to be affordable for middle class.

  8. Most dangerous places? by Anonymous Coward · · Score: 0

    Go install one by Osama bin Laden and I'll believe you.

    1. Re:Most dangerous places? by monkyyy · · Score: 0

      they have internet there, how else would they get their torror vids out

      --
      warning pointless sig
  9. Broad strokes & Deep pockets. by Anonymous Coward · · Score: 0

    The investment required to reach customers in remote spots is not small—hence Digicel’s $4.3 billion debt.

    I guess now we know how much it'll cost to deliver broadband to rural America.

  10. Interesting. by Leebert · · Score: 4, Informative

    I was just in Haiti over the weekend. On my prior trip in 2007, Digicel was everywhere. This time, it was Viola, and relatively little Digicel. My phone connected to Viola. In fact, Digicel wasn't even listed in the list of carriers on my iPhone when I checked. I was actually wondering if they still existed.

    What's striking about Haiti (and, from what I'm told from missionary friends, parts of Africa) is how many people have cell phones. People who don't even have electricity in their homes run around with cell phones. When you wander around the mission I was working at, everywhere you go there is a cell phone plugged in and charging. Viola even has charging stations at retailers in Port-au-Prince.

    1. Re:Interesting. by cerberusss · · Score: 3, Funny

      When you wander around the mission I was working at, everywhere you go there is a cell phone plugged in and charging.

      They do that. My workplace and recently my home got infested. The little buggers creep out and about, and sneakily insert their appendages into wall sockets. Sucking energy until their little metallic bodies are bloated, their tiny bars pulsing with power. I see them everywhere. They aim their tiny energy rays at my balls, slowly dehumanizing me. Yesterday, one started talking to me and I crushed it under my combat boots. I've been preparing. I'm ready for them. I'm going to kill each and everyone of them.

      --
      8 of 13 people found this answer helpful. Did you?
    2. Re:Interesting. by Jawnn · · Score: 1

      You keep using that word (Viola). I not think it means what you think it means. Large stringed instruments are not very good wireless carriers.

    3. Re:Interesting. by Leebert · · Score: 1

      Funny. :)

      But just in case you're serious: http://www.voilacomcel.com/static/home.html

  11. Technology may improve standard of living by Anonymous Coward · · Score: 0

    Has one ever thought about the implementation of technology lowering the murder rate?

  12. Murder Rates by chrb · · Score: 1

    "including Haiti and Papua New Guinea, whose capital, Port Moresby, has one of the highest murder rates in the world"

    I wonder what counts as "high". For comparison: (1999 BBC article, 2008 Foreign Policy article, and Guardian 2009).

    Caracas 130 per 100,000
    New Orleans est. 67 (pd) to 95 (fbi) per 100,000
    Cape Town 62 per 100,000
    Washington DC 69.3 per 100,000
    Port Moresby 54 per 100,000
    Detroit 40.6 per 100,000
    Papua New Guinea 15.2 per 100,000
    Moscow 9.6 per 100,000
    Haiti 5.3 per 100,000.
    London 1.8 per 100,000