Two cell-phone companies in Haiti have outshone the government, the NGOs, and the international community in reconstructing post-earthquake Haiti. How — and why — did they do it?
BY AMY BRACKEN | JANUARY 11, 2011
Port-au-Prince, HAITI—Port-au-Prince’s skyline consists of a solitary building: a shimmering glass and aluminum frame structure that, at 11 stories, towers over the torn-up city. The owner’s name, Digicel, is displayed prominently at the top in red letters that glow even during the often blacked-out nights. Along with its main competitor, Voila, Digicel makes its presence known in Haiti, and not only through the handsets of the almost 4 million wireless customers here. The red Digicel and lime-green Voila logos are more visible than the Haitian flag, the vandalized presidential campaign posters, and the faded emblems on white NGO vehicles.
On the one-year anniversary of the earthquake that devastated much of the country, journalists are issuing scathing assessments of government and international actors that failed to get the country back on its feet. Residents are mourning their losses and cursing the government, which, they say, failed them. And given that a mere 5 percent of the rubble has been cleared, clean water and other services are still missing, a rampant cholera outbreak continues to spread, massive fraud plagued recent presidential elections, and 1 million Haitians still live in tent camps — it would seem that they have a point.
But no one complains about the phone companies. In fact, Digicel and Voila are widely hailed as the most competent actors amid the reconstruction’s larger disarray. At year’s end, Haitian newspaper Le Matin‘s “Great Figures of 2010” lauded both companies’ CEOs for supporting the economy and lives of earthquake victims. “I say bravo to Digicel because they do serious work,” says Jenary Cyprien, an unemployed musician living with his wife and daughter in the Champs de Mars tent camp.
How have two cell-phone companies maintained such wild popularity, when the government, NGOs, and the nternational community are so reviled? Their interests are in building up a consumer base that has the cash in their pockets and infrastructure on their streets to use their services. And that means a more functional Haiti — especially if it comes with a shiny red Digicel label.
When the Irish company Digicel arrived in Haiti just half a decade ago, it noticed that the very things that chased so many investors away — the lack of infrastructure and basic services — were a massive opportunity for growth. Haitians were increasingly spread out, moving into the city and overseas. They wanted to stay in touch and transfer money to family back home, and for a largely illiterate and remote population, mail wasn’t the answer. Yet the inefficient state-owned land-line company, Teleco, served just over 1 percent of the population, and the mobile providers reached less than 5 percent. Costs were high because infrastructure like roads and electricity simply wasn’t there.
So Digicel created its own infrastructure. Instead of waiting for the government, the company built roads to many of its sites and kept its reception towers going with hundreds of generators. Annual diesel costs alone are in the millions. All in all, Digicel has poured more than $400 million in Haiti — more than any other international company ever. Phone prices have dropped from $100-plus to just $10, with free minutes on offer. Yet the company is turning out a profit.
More recently, in addition to building infrastructure and other social goods — things that served their own network as much as Haitians themselves — Digicel began to invest directly in charity. “They wanted to be big in the market,” says Kesner Pharel, a Haitian economic consultant based in Port-au-Prince, “So they gave $1 million to the soccer federation. Haitians love soccer so much, so it was a good thing for them. They invested in education, and Haitian people love investing in education for our kids.”
Some called it the Digicel Revolution, or the “red wave”: a visible sweep of red-hued advertising that covered the roofs and walls of entire neighborhoods. But rather than swamping the competition, Digicel forced it to adopt similar tactics to stay competitive. Voila, which had opened in Haiti in 1998 under the name Comcel, also reduced prices and increased corporate social responsibility, funding programs that sound very similar to Digicel’s: scholarships, soccer programs for at-risk kids, and so on.
In the aftermath of the earthquake, the cell-phone companies have continued to provide the same level of corporate support, despite losing millions of dollars in equipment. They have provided free minutes for customers to call for help and reach loved ones. They gave out emergency aid in the form of shelter, medicine, food, and water, with Digicel Foundation spending more than $20 million on relief alone. And both companies now work with NGOs to provide cholera education in the form of text messages.
On Jan. 11, a celebration unveiled the only reconstructed building in the pummeled downtown business district. The historic Marché Hyppolite, a lofty metal marketplace that was demolished in the earthquake, is now open for business, an elegant, turreted structure that gleams amid the grime. And it’s all thanks to Digicel, whose billionaire founder, Denis O’Brien, paid for the reconstruction himself and coordinated with the city of Port-au-Prince to carry it out.
Clearly, whatever they are doing is working to help rebuild Haiti — and brand loyalty. A public opinion study conducted last summer by Pharel’s consulting firm shows a widespread love of the two companies, especially Digicel.
CEOs of both companies say their programs help the country while helping themselves. For Voila CEO Robin Padberg, helping Haiti develop means more potential business: “If we as a society can raise the bar and create a better standard of living, then for us as a company we have a much larger target and subscriber pool.”
In other words, the cell-phone companies know what Haitians want; their business depends on responding to the customers’ needs. Internationally backed aid organizations — not to mention the government — don’t have the same immediate incentive to do so.
But of course, the cell-phone companies’ interests do not always align exactly with Haiti’s. One drawback of depending on their largesse is the potential for clientelism, or offering services only to customers. While Voila distributes water indiscriminately at camps, for example, it only offers other handouts such as tents to its clients, in organized contests. Digicel and Voila are also constantly seeking to take credit for their good deeds, something that Haitians here roll their eyes at and that blurs the line between advertising and social responsibility. For example, Digicel plans to illuminate dark streets with solar lamps — emblazoned with the Digicel logo.
The relationship between the cell-phone companies and Haiti’s beleaguered public sector has some issues as well, according to former Haitian Prime Minister Michèle Pierre-Louis. During her tenure in 2009, she pushed for the taxation of international calls to provide some much-needed revenue for the state. Instead of agreeing to pay the tax and swallow the cost, she says, Digicel announced that the government was forcing their customers to pay more. Angry protests ensued, and the government backed down. “I have no problem with corporations wanting to do their thing here,” Pierre-Louis says now, “but from a public-sector point of view, in a government that is so dependent and that needs to raise revenues in order to respond to the people’s needs, I think this is very unfair.”
Like it or not, however, the cell companies are here to stay, and they’re growing faster than the Haitian economy and government. The companies are looking to expand network coverage beyond the current 37 percent and increase Internet services, and Digicel plans to invest another $120 million in the country in the coming year. Last year, Voila and Digicel both launched mobile banking, enabling the transfer of funds through cell phones, a development for which Digicel won a $2.5 million grant from the Bill and Melinda Gates Foundation.
But the most important role the cell-phone companies could play, says Maarten Boute, CEO of Digicel Haiti, is a catalyst. He thinks the end-of-year showcase of the new and improved Marché Hyppolite might have a ripple effect among other businesses: “We’re hoping that others will follow suit, that a lot of other countries and other companies will say, ‘We also want to do our project down there. We’ll do a cathedral, we’ll do a hospital, we’ll do a school, we’ll do whatever,’ and we’ll kick-start the whole reconstruction process.” The question is, would that mean a new wave of colorful ads splashing their way across the country? And would Haitians mind?