Digicel Chairman says Papua New Guinea ‘fantastic’ location for investment

The Chairman and founder of telecommunications company Digicel, Denis O’Brien, describes Papua New Guinea as a vibrant country that is a ‘fantastic location’ for investors. But he says the physical terrain also made it his company’s most challenging market.

Digicel’s Denis O’Brien Source: Digicel

When Digicel founder Denis O’Brien first visited Papua New Guinea, he says he was ‘quite taken’ by the country:

‘It was a mixture of a quite modern economy and an emerging market, maybe because of the resource sector but also because of small medium enterprises and the whole service sector.’

O’Brien says Digicel has invested US$850 million in PNG.

‘We launched in 2007. It was our most challenging network build because the (electricity) grid does not go everywhere.

‘We have 1100 towers, of which only about 300 are on the (electricity) grid.

‘We have to fuel our towers (ourselves) and provide fuel with helicopter drops every week.

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‘So, from a build point of view, it was the most difficult network that we have done.’

O’Brien says he was pleased to find a ‘depth of management ability and capability’ in PNG, which helped when establishing the company.

‘There were some first class companies that had spent a lot of money on training management, so we were able to attract management very quickly.

‘Digicel is an ‘eclectic’ company, with big investments.’

‘The other thing we found is that only about one or two per cent of people had a phone, so there was a real need and an under-served market.’

Giving back

A Digicel PNG Foundation mobile health clinic reaches another community. Credit: Digicel PNG Foundation.

O’Brien says he did not want Digicel to be seen as ‘some Irish company’ investing a lot of money in Papua New Guinea, providing a good service, but not putting money back into the country.

He says the Digicel Foundation was set up ‘very quickly’—a move which he describes as ‘probably the best thing we ever did’.

He argues that,although ‘PNG is a fantastic location for investment’ there is a requirement not just to seek profits but also to be socially responsible— and not be seen as “robber barons”.’

That meant working with communities across the country.

To date, the Digicel Foundation has built health centres, libraries, 250 primary class rooms and 276 elementary classrooms.

Vibrant technology plays

O’Brien says Digicel is an ‘eclectic’ company, with big investments in Haiti and El Salvador among its total footprint of 31 markets across Asia-Pacific, the Caribbean and Central America—’reasonably challenging countries.’

Digicel is making some big technology plays. ‘We are dropping out of 3G because it is old technology. Now it’s all about fibre and LTE [long term evolution, or 4G].

‘Yes, there is risk in every country. But I think all the risks you see in Papua New Guinea are very manageable.’

‘We have laid fibre in Port Moresby, we have a satellite television business, we have a digital business, we are hoping to participate in the new submarine cable coming in, we employ a thousand people and we have 10,000 people who depend on Digicel for their livelihood in selling top-up cards.’

Coverage

Digicel delivers 80 per cent coverage of the country, he says, but the challenge is knowing where to build your network and where to focus your capacity – expecially with a population that is on the move.

‘We used to hire small Cessnas and photograph the countryside because we wanted to know where communities were moving to during the build of the LNG pipeline.

‘It was a way of trying to be accurate and working out where we would actually build that coverage.’

O’Brien believes PNG’s investment environment benefits from the historical role of British law in the country.

Manageable risk

‘When I look at risk—yes, there is risk in every country. But I think all the risks you see in Papua New Guinea are very manageable.

‘You have to employ local managers who can actually handle that environment.’

O’Brien pointed to ‘government stability’, which he argues has created a policy environment positive for foreign direct investor.

He especially sees a future for PNG in organic farming, for instance.

‘When I go to Papua New Guinea I always get excited because the vibrancy is just extraordinary.

‘It is about being in business and being profitable but also having fun and meeting people who are just a knockout.’

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