Digicel has spent $31m on application for licence in Burma
O’Brien says his company is entering one of most ‘exciting markets’ on planet at present
Denis O Brien: “I find with emerging markets that you have to go visit and you’ve got to put your own people on the ground”
Denis O’Brien’s mobile phone group Digicel spent $31 million on its application for a licence in Burma, which it submitted to the Government on Monday.
Speaking as a panel member in a session on emerging markets at the Ernst & Young World Entrepreneur of the Year Awards event in Monaco, Mr O’Brien described Burma as “probably the most exciting market on the planet at the moment” and said it was a “big bet” for the company.
Mr O’Brien said Digicel was the only company among the 11 applicants to have secured leases for the mobile phone towers that it will need to transmit its services. “We have 5,600 leases [signed],” he said.
Mr O’Brien noted that out of a population of about 63 million in Burma, only about 7 or 8 per cent has a phone. “I like emerging markets because they are exciting. They’re high growth markets,” he added.
The Irish businessman said “at least half the [Burmese] economy is informal” with the result that the real GDP per capita is probably double the official $1,500 figure. “That’s a really good base to build on and that country will probably grow at maybe 10 or 12 per cent over the next 10 years.”
When asked about the challenges of setting up in an emerging market such as Burma, Mr O’Brien said: “I find with emerging markets that you have to go visit and you’ve got to put your own people on the ground. So we have had people in Myanmar [Burma] for over two or three years.”
“If you take one or two of your own people from your home team and put them into the country, leave them there for two years and visit them every month yourself you get a pretty good understanding of a market.”
Mr O’Brien was asked about the challenges of dealing with governments and regulators in emerging markets. Digicel paid $47 million to secure its first licence in Jamaica in 2001. It now has operations in 31 countries in the Caribbean, Central America and the Pacific Islands. This includes 19 start-up businesses.
“We always had advance teams on the ground to build relationships. You need the right person as well. You need somebody with a lot of emotional intelligence, who will have an instant empathy with people. You do not want to come across as colonial – that very important.
“We have what we call our secretary of state. He would travel to all our markets every three or four months and meet with the prime minister or minister concerned. It’s like a foreign affairs role to ensure that the government is happy with us, that we’re meeting all our commitments, we’re meeting their requirements in terms of the ICT policies. That is a specific role. That’s our senior independent director from our main board who does that.
“We’re in a highly regulated industry, unfortunately, so you have to pay attention to government relations.”
He contrasted doing business in emerging markets with Europe. “I’ve looked at telecoms opportunities all over Europe. It’s all regulated. You have Viviane Reding [vice-president of the European Commission] shouting every week about changing roaming rates. It’s miserable.”
Digicel looked at acquiring Eircom before the Irish telco was placed into examinership last year and taken over by its lenders. Mr O’Brien won the Irish E&Y entrepreneur award in 1998 and is a member of the judging panel that will decide this year’s winner here.