FRANKFURT -- Ultra-Broadband Forum -- Two years ago, Digicel had no fixed-line business and zero experience in the fixed-line market. The Caribbean operator's CTO, John Quinn, jokes that, when he joined the company as director of fiber strategy in September 2014, he was stunned to realize he was Digicel's first fixed-line employee.
The transformation since then has been as breathtaking as a sprint finish by Usain Bolt, Digicel's recently appointed "chief speed officer." Facing tough competition from Cable & Wireless Worldwide plc (London: CW) (CWW) -- acquired by Liberty Global Inc. (Nasdaq: LBTY) earlier this year -- the mobile-only Digicel Group has plunged ambitiously into the uncharted waters of fiber broadband. Earlier this year, it hit the 100,000 subscriber mark, and Quinn told attendees at this week's Ultra-Broadband Forum in Frankfurt that Digicel is currently adding about 10,000 new customers every month.
Somewhat dismissive of copper-based technologies such as vectoring and G.fast, Quinn has gone the whole hog, leading the rollout of a high-speed fiber-to-the-home network that now reaches half a million homes in the markets of Barbados, Jamaica and Trinidad and Tobago. It obviously helped that Digicel was starting from scratch and not wrestling with an aging collection of copper pipes, unlike Europe's biggest telcos. In May, the operator flagged successful trials of XG-PON, a next-generation FTTH technology that can support speeds of up to 10 Gbit/s. "That's what Usain Bolt is using in Kingston [Jamaica's capital]," says Quinn.
Commercial customers aren't enjoying those kinds of lightning-fast services just yet, but Quinn claims to be getting a symmetrical 900 Mbit/s on his own Digicel service. The operator has also put together a successful TV offering to lure customers. "We now have the most widely viewed sports channel in the region and we've developed an OTT [over-the-top] app to bring the experience to mobile," says Quinn.
That is not to say any of this has been easy. Some of the more remote properties Digicel is serving do not even have addresses, posing a challenge for back-office systems. Weather conditions are a constant concern in the hurricane-prone region, forcing executives to think carefully about where to place physical assets.
Regulation, however, appears to have been less of a barrier than in other parts of the world, where investors in fiber networks are often made to provide wholesale services to competitors at unfavorable rates. "If someone invests in infrastructure they have to be able to make a return," says Quinn, berating European authorities for what he evidently believes is a short-sighted approach to broadband.
Those remarks suggest the business case stacks up well, but as a privately owned company Digicel does not currently publish details of its earnings (plans for a flotation were abandoned this time last year because of weak stock market conditions). What's clear is that building fiber networks in areas of low-rise housing will not have come cheaply. Persuading customers to spend heavily on broadband services could also be difficult. Annual GDP per capita in Jamaica, at purchasing power parity, is less than $9,000, compared with more than $50,000 in the US.
Digicel claims to serve about 14 million customers across its 32 markets in the Caribbean, Central America and the Pacific, which means broadband currently accounts for a tiny fraction of the overall business. It also remains much smaller than rival CWW, which picked up another 34,000 broadband customers in Jamaica alone last year, giving it 517,000 in that country in total. But Digicel's growth rate is undoubtedly impressive. If it can continue innovating on high-speed connectivity, it could become an even stronger force in the region's broadband markets.
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