By RENE BRUEMMER, Montreal Gazette
PORT-AU-PRINCE – When cellular phone company Digicel entered the Haitian market in 2006, many felt they were doomed to fail. They plowed ahead regardless, investing hundreds of millions of dollars, and in 10 months had built their cellphone network. The hope was to sign up 300,000 clients within the first five years.
They had 300,000 clients in the first month.
With the proper product, a good business plan and the right amount of moxie, Digicel showed, there is money to be made in Haiti.
By the end of its first year, the upstart telecommunications provider launched by Irish billionaire entrepreneur Denis O’Brien in Jamaica in 2001 had signed up 1.4 million clients in Haiti. It would go on to invest $370 million in the country, the largest-ever investment of a foreign private company in Haiti, and has plans to invest another $150 million. They have 900 employees, making it the largest employer in the country, as well as the largest taxpayer. Digicel says it employs an additional 60,000 indirectly, in large part through its mini-franchises visible on every Haitian street corner -a man or woman wearing a Digicel vest who can top up talking time on your telephone for as little as 25 cents. There are also the vendors who will charge your phone off a car battery for a few cents, or stand in the middle of the road selling cellphone chargers to passing drivers.
Much of Digicel’s success came because it catered to the Haitian masses. Where cellphones used to cost between $70 and $200, putting them out of reach of 98 per cent of the population, Digicel dropped prices to as low as $12.50 U.S. Users no longer had to pay for activation or incoming phone calls. Most phones work on a prepaid system, ending the need for upfront deposits, complicated contracts, or a fixed address.
“Denis O’Brien saw a market you could make money in, and at the same time a way to encourage other people to move in and invest,” Greg van Koughnett, an amiable Pointe Claire native who is head of legal and regulatory affairs for Digicel Haiti, said during an interview in his office in Digicel’s gleaming 11-storey, earthquake-proof building in Port-au-Prince, the tallest in the capital. It has also opened the benefits of wireless communication in a place with few land lines to millions of Haitians, allowing plumbers and masons to reach their clients, and family members and friends to reach each other. Digicel says 40 per cent of Haitians now have access to telephone service, up from five per cent before 2006.
Digicel’s successful gamble exemplifies what some say is Haiti’s best hope, and a much more effective solution than constantly bestowing aid -responsible investment by entrepreneurs interested in enriching themselves and Haiti at the same time.
“It’s perfectly fine to make money as long as it’s done responsibly,” Conor Murphy told the Slate.comonline magazine. “Responsible businesses are what’s needed here,” especially in light of the thousands of aid organizations that have failed to have an impact on the country’s overall standard of living.
Murphy is the country manager of “Soul of Haiti,” which is trying to build economic partnerships between Ireland and Haiti.
In Montreal this fall, hundreds of Haitian and Quebec entrepreneurs and officials attended what was billed as the first Quebec-Haiti Business Forum to spur economic opportunities.
“I think enlightened capitalism can go a long way,” van Koughnett said at then, noting that Digicel’s charitable foundation has created more than 20 schools in Haiti, and raised $20 million for disaster relief. O’Brien and his wife personally funded the rebuilding of Port-au-Prince’s vast, iconic Iron Market building, home to 900 vendors downtown, which collapsed in the earthquake. With $12 million in funding, the market was rebuilt in a year.
Enlightened capitalism has also gone a long way for Digicel -Haiti represents 20 per cent of its overall revenues, and is its second-largest market after Jamaica out of the 32 countries in which it operates in the Caribbean and Central America.
Investing in Haiti has its challenges, however. Digicel’s policy of not paying bribes means things sometimes take longer getting out of customs. Startup times for new foreign businesses in Haiti were among the slowest in the world, but Haitian Commerce and Industry Minister Josseline Colimon Fethiere told The Gazette that measures have been taken to reduce the period it takes to start a new business in Haiti from six months to six weeks. Money is being invested in training, customs and infrastructure like roads and ports, with the hope foreign investments can lead to 140,000 jobs in the next five years, Fethiere said.
For foreign employees like van Koughnett, Haiti represents a “fountain of youth” -the opportunity to see a new region, work with young, motivated people keen to learn, and try to make things better. There are challenges for him, too — since his picture and a short bio are displayed on Digicel’s web pages, he is considered a kidnapping risk, so he is accompanied by an armed guard and driven around in a bulletproof SUV.
Van Koughnett considers it a new adventure. “I’m quite tickled pink to be here,” he said.
For CEO O’Brien, the benefits are also two-fold. In 2010, the mayor of Port-au-Prince named O’Brien the city’s “goodwill ambassador” in recognition of his efforts to rebuild Haiti and attract foreign investment.