Dennis O'brien

Regional telecoms service provider Digicel, is investing US$10 million to extend its cell and land line services in The Cayman Islands, having already spent US$20 million to set up a GSM service in that country.

"The additional investment will go towards building out the network and introducing a wireless land line service over the next two to three months," said Digicel group chairman Dennis O'brien, on Wednesday, the day Digicel formally launched its service in the island.

The investment in this tiny island of fewer than 40,000 people, is a fraction of the estimated US$550 million that Digicel has already spent in setting up service in the seven Caribbean countries in which it now operates.

"We are now leaders in four of the seven countries," said O'brien, as he addresed journalists and others in Grand Cayman on Wednesday. "When you are getting the bulk of the business it gives you the confidence to invest further," added O'brien.

The Cayman operation involves 20 cell sites, 35 employees and 12 dealer stores.

Digicel, having pledged to use Jamaica as a beachhead from which it would crack Cable & Wireless' dominance throughout the region, paid the Jamaican government US$47 million for the licence in 1999.

Its entry into the Cayman market was via a different financial arrangement.

"Digicel did not pay the traditional flat licence fee to operate in Cayman," explained JD Buckley, the head of the company's operation in the island. Under this structure, Digicel will surrender an undisclosed annual per cent of its revenues to the Cayman government, according to Buckley.

Digicel says it expects to break-even in "two years across the region" and within months on its flagship operation - in Jamaica. The company had initially set a five-year target for breaking even in Jamaica.

The first of two cellular companies that secured the licence in 1999 to begin providing competition to C&W in Jamaica, Digicel has captured the lead in the mobile market from its more entrenched rival. It surpassed the C&W cellular customer base one year and nine months after its April 2001 launch in the island.

Market experts attribute Digicel's success in part to its savvy youth-focussed marketing, combined with the quick launch of its service ahead of rival licence holder Centennial.

Digicel's operation in Jamaica involves close to a million customers, 500 cell sites, 558 direct employees with another 3,000 employed indirectly, and 180 dealer stores.

The company is now seeking to secure a licence to launch in Trinidad & Tobago.

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