O'Brien to enter US telecoms market in 2007

Denis O'Brien has said he intends to enter the telecoms market in the US early next year.

Mr O'Brien, whose Digicel group has been expanding rapidly in the Caribbean, has said he intends to take on the prepaid market in the US, which caters to the young and the less affluent.

He thinks the sector is inadequately served by US carriers, according to a US newspaper interview this week. However, he would not expand on how he intended to change how the market was served.

"I don't want to open the kimono too much, but it will be an interesting proposition, I promise you," he told USA Today. A spokeswoman for Mr O'Brien said it was too early for him to comment further on the move.

Mr O'Brien is known to have been studying the US market for some time and has previously indicated his interest in moving into the youth sector there. However, this is understood to be the first time he has given a date for beginning operations in the US. What vehicle he intends using is not clear.

Yesterday Digicel announced it was not going ahead with an effort to buy a 51 per cent stake in Columbian mobile phone firm Colombia Movil (Ola). In a short statement Digicel said the project had been an exciting business opportunity but "was an opportunity which Digicel has chosen not to pursue given other expansion projects under way".

Ola is the smallest mobile operator in Colombia. The stake not being pursued by Digicel has been bought by Luxembourg-based Millicom International Cellular (MIC), which is to pay $125 million (€97.44 million). Ola has posted losses every year since its creation in 2003.

The effort to get involved in Colombia was not Digicel's first venture into South America.

"Digicel has been invited by the government of Guyana to establish a GSM network there and was advised by the government of Suriname of eligibility for a full cellular licence following a successful application process in August," a spokeswoman said. "We look forward to entering these respective South American markets in the near future."

The company is also interested in become involved in Central American markets. In July the company raised $150 million through a corporate bond offer to support rapid expansion and meet growing customer demand. There are also a number of Caribbean markets that have yet to be liberalised with which Digicel is interested in becoming involved.

Digicel has grown hugely since it was first launched in Jamaica in 2001. It now has operations in 20 pan-Caribbean markets and a total of 2.6 million subscribers, the spokeswoman said. It is also interested in developing a presence around the Pacific rim, with initial steps being taken in Samoa and Fiji.

In his interview with USA Today, Mr O'Brien talked about how he brought down prices in Jamaica.

"It was basically a Southwest Airlines approach. We brought the rates down and went for volume," he said.