FROM DOT TO DOT

Panama 2014 | TELECOMS & IT | INTERVIEW

TBY talks to David Butler, CEO of Digicel, on the company's growth strategy, mobile number portability, and 4G service penetration.

David Butler
BIOGRAPHY
David Butler began his career with Digicel in 2005, following a number of years at Esat Telecom in Ireland. He spent around three years working in Barbados and Aruba for Digicel Caribe, and has served as CEO of Digicel in Vanuatu, Tonga, and Fiji. He has an MA in business and a degree in commerce.

What was the importance of opening in Panama for Digicel and what has the growth strategy been in the country?

The importance for Digicel was in terms of our Central American strategy. We are currently in El Salvador and Panama, we are in 32 countries around the world, with a heavy presence in the Caribbean. We also have a strong Pan-Caribbean-Pacific-Central American presence at the moment. We are actually coming up on our sixth birthday in October 2014. When we came into the market, as the third player, we did it with aggressive pricing strategies and acquisition strategies, which is not unusual for Digicel; we typically come in and go heavily after winning market share. We were successful in that, and in a short time we gained well over a 20% market share in Panama. In a market with four players, that was an excellent result for such a short period of time. The initial strategy was to win a solid piece of market share, bring customers onboard, and continue to work on that formula. If you step back and look at the six years we have been here, over the last two years in particular, there has been significant growth in data and ICT, and we have built and developed an ICT team in Panama to take advantage of this new trend. The most significant growth for Digicel Panama over the past few years has been data growth, data subscribers on our network, smartphone users, and data revenue. It has been absolutely critical in terms of growing revenues.

What was the importance of the mobile number portability (MNP) measure implemented by the government in 2011 for Digicel?

MNP has been a benefit to mobile users more than anything, since they are able to retain their telephone number and they can implement the plans that best meet their needs. For operators, the reality is that MNP has not had much impact if we compare the amount of ported numbers that are made monthly, in the case of Digicel are more than 300 lines per month (between pre-paid and post-paid corporate), versus the amount of new lines that are activated monthly that are approximately 80,000.

Recent research indicated that Digicel has the fastest data speed in Panama. How do you evaluate the penetration of 4G services in Panama?

If you look at our capital investment into Panama, a large part of it has been improving our 4G network. The actual coverage is important, but equally, too, is the speed. We have spent tens of millions of dollars on improving our 4G network, and Digicel was offering customers the most consistent coverage and speed. The way that survey was conducted was by taking a number of locations across Panama and different times during the day<, our peak hour is late in the evening. This was an interesting study and for us, it told us what we already knew. For example, year on year, our 4G subscribers have grown by 78%, which is massive growth. Our smartphone users in Panama have grown by over 40%. People are becoming very app-savvy, they have a huge demand for data now. It is not just the number of people using our 4G services; it is the amount of data they are using, that has really risen as well. At Digicel, across our 32 markets, our Panamanian consumers are among the highest data users and are tech savvy and keen to have the latest services and apps. We initially launched 4G in 2012-2013 following an investment of over $40 million. It is very important to understand that from a telecoms point of view, there is a capital requirement in terms of upgrading the towers. Here in Panama, we have over 900 sites across the country, it is a large landmass you have to cover from the regions to the cities.