Digicel, a mobile operator across Caribbean and South Pacific markets, filed for an Initial Public Offering, with its documentation revealing some interesting details of its business plans.
The company said that it intends to use the proceeds for “general corporate purposes”, including capital expenditures and acquisitions, and to repay existing debts. It does not expect to use proceeds to fund dividends to shareholders.
In its regulatory filing, the company said it is “in the process of evolving from a pure mobile telecommunications company into a leading total communications and entertainment provider”.
This includes expanding its product offerings through development of its business-focused services, and entering cable television and broadband markets, which have a lower penetration than mobile services in its markets.
It said that it “believes there are significant synergies from offering a combination of mobile, business solution, cable TV and broadband and other related products and services”, related to brand, people, networks and distribution capabilities.
With regard to this, it has completed a number of acquisitions, and is implementing plans for greenfield launches.
The company provides mobile services to 13.6 million subscribers in 31 markets with an aggregate population of “approximately 32 million people”. It offers HSPA+ or LTE services in 30 markets and holds the number one market position in 21 territories, with mobile market share of more than 50 per cent in 20 markets.
It said that more than 50 per cent of its total mobile voice traffic is on-net, which is “the most profitable type of mobile voice traffic for Digicel due to the fact that Digicel does not need to pay interconnect fees to third parties”. It said its leadership position also minimises the impact of termination rate cuts.
In the three years to 31 March 2015, it has “made a strategic decision to invest $1.5 billion in capital expenditure”, to “create a superior network infrastructure that it believes will facilitate and provide it with the capacity for future growth across mobile, cable TV and broadband, and business solutions”.
It owns “approximately 5,600” of the “approximately 5,940” cell sites it uses, which significantly reduces its payments to third-parties for tower leases.
With regard to its fixed services, the company has constructed FTTH networks in certain areas of Haiti, Jamaica, Trinidad and Tobago, Barbados, and Papua New Guinea, which it continues to extend, and is the advanced stages of building FTTH networks in Jamaica, Trinidad and Tobago and Barbados.
It has also acquired cable TV and broadband companies in Anguilla, Nevis, Montserrat, Dominica, Turks and Caicos and Jamaica, two cable TV services in Papua New Guinea and a subsea fibre network of 3,100 km connecting many of its Caribbean markets with each other and with the United States. It also has agreements with third party subsea fibre companies in the Caribbean and South Pacific.
The company reported a loss for the year to 31 March 2015 of $157.6 million, compared with a prior-year profit of $43.5 million, on revenue of $2.79 billion, up from $2.75 billion.
In the most recent year, 66.8 per cent of revenue came from Jamaica, Haiti, Papua New Guinea, Trinidad and Tobago and the French West Indies.