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Haiti: Telecom Wars

digicelmartinique
Digicel billboard, Martinique. By blogger Greg at InternetRapide.com.

Jamaica-based Caribbean telecom giant Digicel has a presence in over a dozen countries in the region. Digicel officially launched operations on the Haitian market in May to much resistance from local private telecoms Haitel and Comcel but bloggers and other web commentators seem to agree that Digicel’s presence on the Haitian market is actually a good thing for local consumers’ pockets, for their safety as well as potential job creation.

Launching a $130 million investment

Martiniquan blogger InternetRapide.com chronicled (Fr) the launch when it happened in early May:

Les offres de DIGICEL, quatrième opérateur mobile à Haïti sont commercialisées depuis ce 3 mai 2006.
Digicel a obtenu une licence d'exploitation d'un réseau GSM sur l'île depuis juin 2005; les autres opérateurs déjà présents à Haïti s'appuient sur des réseaux CDMA et TDMA (…)Ce lancement à Haïti est une étape importante dans le développement du groupe du magnat irlandais Denis O'Brien, et représente plus de 130 millions de dollars d'investissement (USD).

Digicel offers have been commercialized since May 3, 2006. Digicel obtained a license to operate a GSM network on the island since June 2005. The operators already in place in Haiti operate on CDMA and TDMA networks (…) The launch in Haiti is an important step in the development of Irish magnate Denis O'Brien's company and represents 130 million dollars in investment.

A Haitian creole-speaking commentator seemed enthusiastic (Kr) about the launch in her comment on Internetrapide.com‘s blog:

digicel vous etes le meilleur. si nous bezouin couvri haiti , se pou nou ale nan tout ti coin,rive tout kote zote pa rive. mete antenne nan tout ti commune kote zote pa la, epi na we rezulta. tout moun ap vi-n jouin nou. kiles nap commencer activer boite gen anpil moun kap tann nou pou activation merci je vous aime

Digicel you are the best. If you want to cover Haiti, just go to all corners that others do not reach. Put antennas in small towns where others do not go; you will see results. All will come to you. When will you activate service? Many are awaiting activation. Thank you. I love you.

Jobs and Investment, Please

Another poster, Darline Joseph, who identified herself as a professional living in Haiti asked (Fr) how she could find work with the company. Indeed, many Haitians looking for job and business opportunities are jumping on the Digicel wagon.

At the HaitiXchange.com message boards, poster Ape_man seemed excited about the job prospects for Haitians:

the good thing about this is that since Haiti speaks a language not spoken by the rest of the greater Caribbean, they will have to employ kreyol/french speaking customer service reps and technicians to assist the callers…this means real jobs for Haitians…as opposed to Cables and Wireless employees that I know who live in Jamaica and support all the Caribbean nations that the company is in being that they all speak English they can do that…in this case, Digicel will have to accomodate Haitians thus must have Haitians in their staff at least in the supporting roles…not to mention the Haitians engineers that will be employed through this deal…

digicel staff launch party
Digicel Staff Launch Party, Haiti. By Pete Kaholupalan.

The Jamaica Gleaner explained how some scrambled to be part of Digicel's 200 dealer-network:

A typical Haitian dealer is Jean-Max Garoute whose business complex is located on the airport road only two minutes from Haiti's notorious Cite Soleil slum (Sun City in English). Jean-Max, whose main business is operating a gas station (and whose family business is the manufacturing of clay tiles), became a dealer simply by writing Digicel a letter, and subsequently passing an interview. Since he opened he says, “Business has been phenomenal, with customers lining up from 5:00 a.m. to buy phones.”

According to Jean-Max, “If I had more phones, I could sell 1000 a day.” The biggest seller is the cheapest phone – the Motorola C115. Jean-Max says it has been popularly named the ‘huit million’ or eight million in English to reflect the fact that the entire Haitian population wants to own one, so that they can finally communicate with their families abroad.

Under the subtitle “An Entrepreneurial Revolution in Haiti,” the Gleaner also reported on CEO Denis O'Brien's enthusiasm for the Haitian market:

At its huge VIP Haiti launch party overlooking Port au Prince on Wednesday night, Digicel's founder, billionaire entrepreneur Denis O'Brien, told the more than one thousand leading members of the Haitian business community (a significant portion of whom were now Digicel dealers) that Haiti and the Caribbean were “One of the most entrepreneurial
regions in the world and we hope that Digicel's entry into Haiti is helping to position the country as a good place to invest in business and that we will see other corporations following our example.” Asked why he had invested in ‘risky’ Haiti, Mr. O'Brien added that when he first came to Haiti two years ago, everybody was ‘buying and selling – it was like a bazaar'. But he believed the market opportunity outweighed the macroeconomic risks, and believed that with Digicel's arrival the ‘foreign investment community is waking up to the opportunity.’ Mr. O'Brien announced that due to the ‘avalanche’ of support for Digicel's GSM network, he had decided to increase his initial investment of US$130 million by another US$50 million over the next few months.

Advertising: The First Battle

Private Haitian telecoms initially reacted to Digicel’s presence in Haiti through regulatory wars having to do with advertising. Local telecom regulatory body CONATEL weighed in against DIGICEL. According to Haitian newsfeed Radio Kiskeya (Fr) : “The arrival of Caribbean operator Digicel triggered a counter-offensive from its Haitian competitors.” Haitel and Comcel, aided by CONATEL cried foul at a commercial pamphlet issued by Digicel that offered trade-ins of non-compatible devices, explains the feed. CONATEL criticized the pamphlets alleging the naming of competitors in advertising was not welcome in Haiti.

The controversial advertising blitz included a sponsorhip of the Haitian Federation of Soccer, said blogger Greg at InternetRapide.com:

Depuis le mois de mars Digicel est le principal sponsor de la Fédération Haïtienne de Football. Pour un million de dollars (USD), selon les termes du partenariat, la première ligue cesse de s’appeler “championnat national de première division” pour devenir le “Championnat Digicel de football”.

Since March, Digicel is the prime sponsor of the Haitian Soccer Federation. For a million dollars, according to the contract, the first league ceases being called “National First Division Championship” and becomes “Digicel Soccer Championship.”

Ex-pat missionary blogger T&T & Tribe, was a little overwhelmed by all the advertising and wondered whether it was not creating the illusion of a need:

“Digicel” entered the cell phone market here in Haiti. They are genius marketers. Everywhere you look there are red and white signs and banners and ads. The advertising all showed up seemingly overnight all over the city. They rented a ton of office spaces and painted the outside of each one red. They are experiencing lines that go around the block. Many of the people in line don't even know what's going on inside. We see people wearing Digicel hats and t-shirts all along the highway heading to our village.

Maybe the hype is because of their massive ad campaign, maybe it is because the other two cell phone options are a joke. Either way, they found a way to create in the mind of the consumer a NEED for new cell phone service. People in Haiti are clamoring for a device that will probably not work very well, that they've lived without up until now, and will cost more than feeding a family of four for a week.

Interconnection: The Sticking Point

Back in May blogger InternetRapide.com believed that interconnection negotiations with Haitel and Comcel would be easy:

Les négociations d'interconnexion avec TELECO, opérateur des lignes fixes et opérateur mobile détenu principalement par l'Etat Haïtien, ont été longues et difficiles, mais les parties sont parvenues à un accord Jeudi dernier. Les négociations avec les deux autres opérateurs, HAITEL et COMCEL-VOILA devraient elles aussi aboutir rapidement (même si ce dernier semble se montrer peu coopératif).

Interconnection negotiations with TELECO, a land line and mobile operator owned mostly by the Haitian government were long and hard but the parties reached an agreement. Negotiations with the two other operators, Haitel and Comcel-Voila should also generate an agreement soon (despite Comcel’s relative non-cooperation so far.)

Indeed, Haitian newsfeed AlterPresse reported that CONATEL's director believed that (Fr) “interconnection would take place before the end of May 2006, emphasizing that no company could escape the interconnection requirement.”

But a showdown is taking place between the pre-existing cell phone operators and Digicel over the issue of interconnection: talks took place on May 30 between [local Telecom regulatory body] CONATEL and the various private mobile operators (Haitel, Comcel and newly arrived Digicel) that, according to AlterPresse, ended without an expected agreement on the issue of interconnection.

Though Haitel originally seemed more amenable to an agreement on interconnection than did Comcel, in the last three weeks, the chemistry between Haitel and Digicel seems to have evaporated and, according to AlterPresse, it is now asking that certain demands be fulfilled before it fully agrees to it. Its head, Franck Cine, stated that:

« tout ce que nous réclamons, c’est une compétition loyale et un traitement égal pour tous les opérateurs de téléphonie de la part de l’Etat Haïtien».

“All that we ask is honest competition and equal treatment for all telephony operators by the Haitian government.”

Interconnection tests scheduled for June 7 did not take place, reports (Fr) AlterPresse.

But, according to the Jamaica Gleaner, Digicel CEO Denis O'Brien believes the interconnection issue may be moot:

Stating that, “he had never seen a market like it” he argued Digicel's success had been so great that soon the interconnection issue with their competition would become irrelevant as Haitians were just throwing away their other phones.

Code Wars: No to a Jamaican Code on Haitian Soil

While no resolution has yet been reached on the interconnection issue, Marcel Montaigne, the head of CONATEL, threatened on June 6 to sanction Digicel over the alleged use of a Jamaican code on Haitian soil, according to (Fr) AlterPresse.

[Le] directeur du CONATEL (…) avait déclaré, nous citons : « Nous sommes un Etat souverain et nous ne pouvons accepter l'utilisation d'un code attribué à un autre pays autre que chez nous », fin de citation.

CONATEL's director declared that: “We are a sovereign state and we cannot accept the use of a code attributed to another country.”

According to the same story, Digicel rebutted that the use of the code is neither fraudulent or competitively unfair nor does it represent a threat to international security, to billing or taxation. It explained that many other operators use codes in more than one country. It quoted Digicel:

« depuis décembre 2005, après trois années de débats, un groupe d'experts internationaux (…) a conclu que la pratique d'utiliser un MCC/MNC (identification du pays de rattachement / réseau de rattachement) dans plus d'un pays ne serait plus interdite ».

“since December 2005, after three years of debate, a group of international experts concluded that the use of an MCC/MNC code in more than one country is no longer forbidden.”

Prices Driven Down

Blog and local press commentators concur that Digicel's presence on the Haitian market has driven prices down:

Says AlterPresse:

La concurrence, provoquée sur le marché de la téléphonie mobile par le lancement en grande pompe des activités du géant régional Digicel, le 3 mai 2006, a eu très vite pour effet de forcer les autres compagnies de téléphonie mobile à revoir leur base de tarification et à offrir un certain nombre d’ « avantages » à leur clientèle.

The competition brought to the cell phone market by the high-profile launch of the regional giant's operations May 3 has forced other mobile companies to restructure their pricing and to offer more perks to their clients.

The Jamaica Gleaner reported a differential in Digicel cell phone prices:

The phone is priced at 900 Haitian goudes (about J$1,500), and is significantly cheaper than the competition's offering at around J$2,600. This price is much cheaper than the J$6,500 it took to buy a phone before Digicel's arrival, reflecting the high degree of subsidy by Digicel of the cost of buying the phone, which it expects to recoup from the increased market penetration.

Moose's Adventures Abroad, a blog kept by an American Digicel employee, wrote:

People lined up for phones starting at 4am the night before our launch. Line-ups were hours long at EVERY store in the country. It is the first time affordable mobile phones have been available in Haiti. The current provider charges:
i. $50 USD to activate
ii. cheapest phone = $60
iii. You pay to make and receive calls
iv. Rates are per-minute

Our charges:
i. $0 to activate
ii. Three phones available for under $20
iii. You only pay to make calls
iv. Rates are per-second

People cannot afford mobile telephony at the current rates – they can afford it now. The number of mobile subscribers in the country could go from 3-4% to 60-80% (this is all speculation on my part). Honestly – it is a bit of a revolution – there are no landline phone networks either so this is the first time many people in Haiti will ever have a phone!

digicel1
Digicel Launch Festivities, Haiti. By Pete Kaholupalan.

The Buzz in Blogs and on the HaitiXchange.com Message Board

Says Mooses Adventures Abroad,

I know many people will argue that we are not in fact revolutionizing the country and that this is consumerism in its worst way. I disagree for a number of reasons -
1. the phones we market and push are the phones under $20 USD.
2. We don't accept credit and we don't reduce the price of phones and force them to take long contracts (in the mass market) like you see in North America. If a person wants to get an expensive phone they have to save up for it and in that case I think it is a legitimate spend.
3. Phones are always a balance of style versus function. In developing countries the large portion of the selection is based on price and function with style lagging behind that.
4. I have heard of a direct correlation between telecom growth and GDP growth in developing countries (not in the developed world). I can't find anything strong that correlates it… but telecom is an enabler. If teleco and technology improves communications improve which facilitates economic growtprovides technical support and services for progressive organizations to improve their outreach and efficiency by using online applications in new ways to meet off line goals.h over all. Yes I realize this is very glossy, high-level and weak.

In the end I hope this is a turning point in the Haitian economy and that this investment hopefully shows a successful business model which will be a catalyst for future development and investment.

Over at the blog of Development Seed, an organization that “provides technical support and services for progressive organizations to improve their outreach and efficiency, ” Bonnie Bogle writes:

There are just 140,000 landlines and 540,000 cell phones in the country of more than 8 million people. (…) Hopefully, that’s beginning to change. Yesterday Digicel, the largest mobile phone operator in the Caribbean, launched service in the country. It will be Haiti’s first second GSM provider and the first to offer service available throughout the country. There’s no doubt that with such a low number of mobile phone users, Haiti could be a very large potential market. (…)

At the very least, Digicel’s entrance into Haiti will provide needed competition for Haiti’s current mobile providers, which are plagued by user complaints. Also at $130 million, it’s a huge investment for a country that notoriously lacks foreign investment. So big that Digicel says it’s “the largest corporate investment in the country from an international company.”

An improved mobile phone system, especially one that offers services like text messaging more affordably, will allow aid organizations and average Haitians to avoid some of the country’s security risks and give them better access to information. And if it’s true about a offering a reliable nationwide network, that will make communication much easier considering that many towns in Haiti are pretty hard to travel to.

At HaitiXchange.com, poster New Haiking agreed that Digicel was good news for Haiti and offered some interesting analysis of (and advice to) various Caribbean and Haitian telecoms:

This is indeed good news no matter which angle you are looking at it, it has some negatives , but Denis O'Brien is the Jeff Bezos (Amazon.com)of cellular phones. Here is the strategy guys, Digicel is an Irish company based in the Caribbean , the company has numerous shell corporations in Bermuda, the Cayman Islands to make sure its windfall profits are not taxed at EU rates.The direct competition is not really Comcel, or Haitel , it's Cable &Wirelless, the British telephone giant that has Vodafone as its main cometitor in Europe.Cable &Wirelless has monopolized the Caribbean telephone market for the last 30 years especially the former and current British colonies, and that's what Denis Obrien is trying to change. Digicel could absorb Haitel easily by buying it out from its current owner Verizon-MCI as it does in other markets in the Caribbean. Verizon smartly sold their cellular operations (Verizon Dominicana)in the DR to Carlos Slim, the Mexican billionaire owner of America Movil and Omnilife.So now it's going to be Digicel,Cable &Wirelless, America Movil, and Cingular fighting to be the Pan-Caribbean cellular network, but which tehcnology will win , GSM or CDMA.

Haiti wins anyway, there are about 5 million people who can be turn into customers in the next 5 years, that growth is incredible if the country stays stable, there are currently only 150, 000 cellular phone users in Haiti, Comcel and Haitel have to reivented themselves, Comcel should tried to expand into the DR by making an alliance with America Movil so , Western Wirelless and Verizon-MCI should follow Denis Obrien and take a bet ,because the Irishman said he can get one billion dollars out the Caribbean in the next 10 years with about 250 million dollars of invesments, and I am talking about net profits, not total sales.

Zoklo, another HaitiXchange.com poster, chimed in with what he learned from a friend who lives in Haiti:

A friend of mine in Haiti just told me that Digicel is making huge waves over there. One of the big contenders was Voila, which was making a big impact during carnival. They sponsored many floats and bands. I'm not sure who their aren't company is, but Digicel is giving them a run for their money.

My friend tells me that Digicel is accepting Voila trade-ins for free Digicel phones and that a lot of people who were working for Voila have quit their jobs.

See more Digicel, Haiti photos by Pete Kaholupalan.

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  • http://haiti.lyalls.net/ david lyall

    This thing about Comcel and Haitel refusing to {inter}connect with Digicel is nuts. I tried to call friends back home in Haiti and a bunch of the numbers were disconnected. Comcel launched Voila and severely degraded their existing TDMA service. Numbers were not allowed to be transferred from the TDMA network to the GSM network.

    Now Digicel. I am rooting for them, but the telephones I left there are useless now, with the virtual shutdown of the TDMA network. Get a new GSM phone. Maybe one that will connect to both Digicel and Voila? I think they use different bands.

    So why isn’t the regulator forcing them to accept connections? Perhaps it would cost more to call to a Haitel or Voila/Comcel phone from a Digicel.

    Ah. I see the problem the other way, if Digicel is allowing free recieved calls. Digicel refuses to pay for one of their phones receiving an out of network call.

    With Comcel you had to buy a 1250 gourde ticket to get one month of unlimited (cost free) incoming calls. 800 of those gourdes were for the unlimited incoming, 450 were for outgoing credits. Too expensive for most people.

  • http://kiskeyacity.blogspot.com Alice Backer

    Thanks, David, for your comment. Always good to hear first person accounts.

  • Jacqueline Dorcal

    I am from Haiti but live in the USA.
    I appreciate the opportunity that Digitel offers to Haitians to be able to possess a cell-phone not too expensive.

    Continue with the good work.

    Jacqueline

  • haitian princess

    Well I hope haitian people do not complaint about treating them like a second class citizens. both digicel and the GB group brought Digicel in Haiti just to collect. GB group has been in Haiti for all my life, what has it done? we don’t even have a good hospital in Haiti, schools. GB does not even buy nothing from Haiti, groceries from Miami or your neighboor DR. Please, read what Gilber Bigio said ’Our principle, which we respect daily, is to not mix in Haitian politics,’’ he explained. “Even after three generations, we are considered foreigners.’ He doesn’t give a shit about Haiti. All he and the others care is become filty rich by haitian sweats. And we haitian buy all that crap. F— GB

  • George Herman Ruth

    My Friends, the problem with this issue and many others is simply that the Haitian people of power want nothing to do with true competition. Thus if someone like Digicel comes in and puts in a good business together the other companies simply stand around and yell racial slurs at Digicel. “They are not originally from Haiti so they should not be able to have such an effect on our company.” It all comes back to simply an issue of race. Quit! we are all human beings. Play on a level playing field, not one in which only your kind can compete. Maybe Haiti will get somewhere that way.

  • http://www.eliesmith.blogspot.com Smith Elie

    It is good news to hear about any investments prospect in Haiti. While there is compition amongst the providers, I hope it will be translated into multiplications of job offers for Haitians.

  • Bazelais Jean Marie

    salutation
    je suis Bazelais jean marie
    c’etais un plaisir pour moi d’ecrire pour dire ce que je me sens pour ce compagnie
    pour bien dire c’est mon compagnie prefere
    je te felicite pour ce beau traivail que vous offre a ce pays et j’espere que vous restez comme ca pour apporter plus de service a ce pays .
    je vous aime beaucoup bonne annee 2007.j;espere que cette annee apporte plus sincerite de bonheur pour toi.
    bay

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