Nº 1 2015 > Leader Interview with Denis O’Brien

Founder and Chairman of Digicel Group

Interviewed by Reza Jafari, Chairman and CEO of e‑Development International

Founder and Chairman of Digicel Group

RezaIt is my great pleasure to introduce Denis O’Brien — it’s great to have you here. Denis, you are Founder and Chairman of Digicel, one of the most successful emerging markets telecom operators, and you have been a very influential leader in both business and social projects. Please tell us about Digicel and your portfolio.

Denis — We started operations in 2001 in Jamaica — at that time, it cost about 2 USD per minute for a long-distance phone call. Only very wealthy people could make calls, and we’ve changed that. Today, there is 110% mobile penetration in Jamaica, and the country now has a better telecommunication network than most parts of the United States. And we are now doing the same in Papua New Guinea — bringing the most modern technologies including 4G and LTE to a developing country. I believe broadband is a human right, and I hope this will be spelt out in the United Nations Sustainable Development Goals (SDGs) in 2015. If you want economic development in the developing world, you have to put in place umbilical cords (such as submarine terrestrial fibre optic networks), in order to drive development.

RezaYou own a broadcasting organization, a hospital and an online recruitment company in China. Do you feel that ecosystems make a significant contribution to development?

Denis — We need to build a broadband ecosystem in the developing world quickly. Today, around 2.5 billion people worldwide have access to broadband, but nearly all of those people are living in developed countries. The biggest challenge now is that broadband access is still less than 10% in many developing countries. It will need huge amounts of network investment to increase penetration levels of broadband penetration to reach European or United States levels, and I would question the business case. The e‑health plans we are talking about are heavily dependent on mobile operators. Generally, right now in developing countries in Africa, around 25% of operators’ revenues are re-invested in capital expenditure (capex) in infrastructure, over which the OTT players and content providers generally have a free ride. In my view, the telecom operators are on their own — there needs to be a contribution from over-the-top (OTT) content and applications providers — such as Google, Facebook, WhatsApp and Skype — which are offering services over telecommunication networks and gaining revenue, without contributing to the costs of the new networks.

In my view, net neutrality is great for those living in the United States, but not for those living in Africa — it means that Silicon Valley can ride across the networks in other countries free of charge, without making much financial contribution. The United States Federal Communication Commission got 4–5 million hits on its website in a couple of days following the recent interventions on net neutrality. This issue was significant in the mid-term elections at the start of November, and will be significant in the presidential elections in the countdown to 2016.

RezaSo the main point is that the broadband ecosystem needs to be sustainable — operators cannot build the infrastructure and let others come and “have a party in your house”?

Denis — It is a balancing act. The regulators in Africa, Asia, South America and the Caribbean all say they want everyone to have access to broadband. Once people have broadband access, they are able to gain access to all the other services. In Burkina Faso, it is unrealistic to project that 90% of the territory will ever be covered by Long Term Evolution (LTE) or 4G broadband networks. Satellite access could be a good alternative solution and is not very expensive.

In Africa, one million health workers are needed just to stand still. Professor Jeffrey Sachs (Director of the Earth Institute at Columbia University, United States, and Special Adviser to United Nations Secretary-General Ban Ki‑moon) is playing a key role in this.

We said we would do something to support health workers with connectivity in Haiti. The telecom operators should give the capacity free of charge. You are only looking at modest connectivity — costing around 10 Euro per month. This is not a cash purchase, and would not affect cash flow, where the capacity already exists. It is rather like an airline seat that goes empty from New York to Dublin — network capacity is perishable daily. It is up to the telecom operators to be responsible citizens and provide these modest capacity requirements to Jeffrey Sachs for free.

I think Haiti has made great progress. In a way, the tragic earthquake has actually helped move the country on. There are lots of different organizations including non-governmental organizations (NGOs) on the ground now, such as Mercy Corps, Concern Worldwide, and Partners in Health — the most important thing in a country like Haiti is working through the government ministries. There is a core group of NGOs — Haiti now has a functioning health service. The biggest issue is jobs — 35% of people do not have a job. Haiti is heavily dependent on Venezuela, which gives Haiti oil supplies at a preferential rate. The government budget in 2014 was 3 billion USD for a country with over ten million people. The key challenge is attracting foreign direct investment (FDI) into Haiti. How do you get manufacturing jobs into Haiti? Digicel, directly and indirectly, employs 35 000 people. When we put a new staff training course up on our internal website, there is tremendous interest — everyone signs up. There is a real hunger for personal advancement. One person earning a salary is likely to be looking after 10–15 family members. Haiti now has a really good Government — they have a President and a Prime Minister who really want to improve the standard of living of ordinary people and move the country forward.

RezaCan we take the lessons learned in Haiti and apply these lessons to Africa for public-private partnerships (PPPs)? And what is the role of government to incentivize you?

Denis — There is a practice among some emerging market governments about selling spectrum and new licenses for vast amounts of money. Governments and regulators see telecom operators as profitable businesses. There was a recent spectrum auction in Nigeria for a considerable amount of money — money that is taken out of the industry in spectrum fees. In Ireland, we sold spectrum licenses for 300 million Euros in a developed country. For developing countries, I don’t think there should be any charge. I think it is much better to impose contractual obligations on operators to roll out the networks quickly, and if operators fail to deliver, then by all means, penalize the operators for not fulfilling the contractual obligations they signed up to.

RezaIt has been a great opportunity to talk with you, thank you very much.

Denis — Thank you. And just to mention in closing, I was just reading the profiles of all the different organizations represented here. It is the power of the 200 people in this room, not their organizations, that matters.

This interview originally took place at the GETHealth Summit in Dublin, Ireland. ITU News gratefully acknowledges the kind permission of Denis O’Brien to reproduce excerpts from the interview.


Celebrating ITU’s 150 Years

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No.6 November | December 2015

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By Silvia Guzmán, Chairman, ITU Focus Group for Smart Sustainable Cities