Guyana awards mobile licence to O'Brien firm

The government in the south American state of Guyana has decided to award a mobile licence to Digicel, the rapidly-expanding Caribbean operator controlled by Denis O'Brien. In business for only five years, the market will be Digicel's 21st.

The group's move to enter Guyana comes as it prepares to bid against Luxembourg group Millicom for a controlling stake in Ola, the third-largest mobile operator in Colombia. With 2.3 million customers in the Ola network, a successful bid for that business would almost double the number of subscribers to Digicel's service.

The decision to award the Guyana licence to Digicel was confirmed yesterday by the the country's president, Bharrat Jagdeo. Last May, one of the two incumbents in the market said Digicel had examined the possibility of acquiring either of the operators already in the market.

Digicel said its business in Guyana will be run by Tim Bahrani, who previously held positions in the African operator Celtel and in Millicom's unit in Asia. The issue of the licence is subject to a consultation process required under the legislation in Guyana that governs the telecoms sector there.

The country has a population of almost 800,000 and mobile penetration stands at 22 per cent, leaving ample scope for growth.

"Digicel expects to make a significant impact on the quality and standard of mobile telecommunications in this country by investing in state-of-the-art infrastructure and offering services and handsets that will deliver real value to its customers," the group said.

Mr O'Brien raised $150 million (€117.2 million) in a bond issue earlier this month that set Digicel up for the next phase of its development. The group is known to be exploring a move into the US, as well as a number of acquisition opportunities.

With well in excess of two million customers, Digicel has more than three times as many subscribers as Esat Digifone had in 2000 when Mr O'Brien sold that company to BT.

The recent bond issue was priced at a yield of 8.625 per cent, on better terms than a $300 million issue in July 2005, which was priced at 9.25 per cent. The latest bond issue suggests that a stock market flotation is not on the immediate horizon. Digicel also indicated that it secured improved lending rates on $600 million in loans it has with a number of international banks.