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Wireless Networking Businesses Cellphones Communications

Providing Wireless In the World's Most Dangerous and Remote Places 40

Posted by samzenpus
from the 5-bar-volcano dept.
grcumb writes "The Economist magazine is running a brief profile of Digicel, a 'minnow' in the wireless telecoms market that has distinguished itself by setting up shop in some of the most unlikely (and dangerous) markets in the world, including Haiti and Papua New Guinea, whose capital, Port Moresby, has one of the highest murder rates in the world."
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Providing Wireless In the World's Most Dangerous and Remote Places

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  • port moresby (Score:1, Interesting)

    by Anonymous Coward

    reminds me of where in the world is carmen sandiego

    • by tuxgeek (872962)
      Well, in port moresby, carmen has been murdered and parts sent via fed ex to san diego
      all thanks to the new wireless network, which made carmen easier to find
  • by santax (1541065) on Wednesday September 22, 2010 @07:14PM (#33670144)
    I dare him to make a regular - wired - connection to my mother in law. Then they will know what dangerous truly means!
  • by grcumb (781340) on Wednesday September 22, 2010 @07:30PM (#33670258) Homepage Journal

    Original submitter here.

    The point I find most interesting in all this is that Digicel succeeds by defying conventional wisdom about supply and demand. They simply create supply and trust local demand to rise. Here's the second paragraph of the original submission:

    "If you just focus on risk, you can't do a thing," said Digicel's billionaire president Denis O'Brien [forbes.com] in a 2008 Forbes profile. But O'Brien's small-market revolution should teach us another lesson, too: Traditional economic analysis doesn't work [imagicity.com] when it comes to communications. Telecommunications is a supply-driven economy. If you build it — no matter where you build it [imagicity.com] — they will come.

    • Fluff article (Score:2, Insightful)

      I fail to see the 'unconventional' here - as if people in [underdeveloped country of your choice] don't want to talk to each other. Or somehow network effects or being able to connect to the rest of the world doesn't count, just because your cell tower is the first in the area.

      So you can't really say Digicel created such market(s) IMHO. It's more like the market did exist, and (by taking a big risk) they where the first to crack it open. Kudoz to them for having the balls, but that's about it. What it do

      • Re: (Score:3, Interesting)

        by hjf (703092)

        I see it more as a matter of underestimation. Most companies only want to invest where they can be sure they will make a profit. Or better said, where they were supposed to make a profit (in case their business plan fails).

        I live in one of those economies where companies don't want to invest. Here in Argentina, only recently the XBOX360 has appeared in large retailers, only after Sony took the first step. Microsoft saw that Sony was selling the PS3 so they decided to bring the XBOX. But Sony didn't just dec

        • Re:Fluff article (Score:4, Informative)

          by MaWeiTao (908546) on Wednesday September 22, 2010 @11:38PM (#33671910)

          The problem is, both the 360 and the PS3 are priced at ARS3000, which is almost USD 800. One has to wonder why they can't offer the product as the same price as in USA.

          Companies don't arbitrarily decide to charge more for products, especially in a country with a lower standard of living than the US. Products are expensive because of taxes and import tariffs. Argentina has a 21% VAT. Retail goods are also subject to a 3% anticipated profits tax. Those are the ones I could dig up quickly. There are a variety of other taxes imposed on goods.

          For good or ill the US doesn't tax imported goods all that heavily. It's why imported products cost nearly as much as they do in the country of origin. If you're in a country where stuff costs twice what it costs in the US chances are it's the fault of your government.

          • Companies don't arbitrarily decide to charge more for products

            Tell that to Blizzard. Starcraft 2, $90 AUS (currently $85 USD) vs $60 USD for the US version.

            Some apple products used to value the AU/US exchange rate at about 0.50 when it was 0.90 or so. But their site seems a bit better now.

          • by hjf (703092)

            Imported goods have up to 50% tax. Products "made" in the country (even "assembled" here counts as "made". I doubt we have the technology to produce Motorola Milestones, yet mine says "made in Argentina". "Packing" it here seems to be enough to call it "made" and avoid a few taxes)

            "Computer" products, that run with electricity (that is: computer, processors, ram sticks, power supplies- but NOT blank media, cases, mousepads, etc) have 10,5% VAT (They were trying to raise it to 21 but I don't know what happen

            • Companies arbitrarily decide to charge more for certain products, especially in a country with lower standard of livings.

              It's not arbitrary. Look at the UN statistics for income distribution:

              The earnings ratio between the top 10% and the bottom 10%
              Argentina: 40.9 United States: 15.9

              Between the top 20% and the bottom 20%
              Argentina: 17.8 United States: 8.4

              While there may be a smaller percentage of Argentinians who could afford an XBOX360, even if it were sold at cost, those Argentinians who can afford one ar

              • by hjf (703092)

                Game consoles aren't for the top 10 or 20%. They're supposed to be affordable for middle class.

    • by evilviper (135110) on Wednesday September 22, 2010 @08:34PM (#33670822) Journal

      Digicel succeeds by defying conventional wisdom

      Considering that TFA says they are $4.3 billion debt, and trying to take their profit out of $3 phone cards, I'm not so sure I'd say they are succeeding AT ALL.

      • by grcumb (781340) on Wednesday September 22, 2010 @08:57PM (#33671012) Homepage Journal

        Digicel succeeds by defying conventional wisdom

        Considering that TFA says they are $4.3 billion debt, and trying to take their profit out of $3 phone cards, I'm not so sure I'd say they are succeeding AT ALL.

        No, you're reading that wrong. Yes, they are carrying debts of $4.3 billion, but their operating profits are quite tidy. Almost all of the debt is capitalisation in new markets, which means their prospects are quite good, provided they don't do anything stupid.

        Digicel SIM cards here in Vanuatu are $US 5.00 each, and they currently have over 100,000 active accounts in a country whose entire population is only 235,000. I've seen some numbers about their call volumes and I can assure you that their national operations are profitable.

      • Many companies go into debt in order to build things. The big question is are they making money to pay off that debt? The smaller question, assuming the answer to the previous question is "yes", is how long will it take?

        • and the third question is if the answer to the first questions is yes and several years at best is will a larger competitor muscle in and push them out of the market (either though legal/political means or through dumping services for a while) before they make their investment back.

    • by initialE (758110)

      Nine out of ten that is a business plan likely to fail. You may not remember the dot-bomb years, but it was all about that.

      • Re: (Score:3, Interesting)

        by R3d M3rcury (871886)

        The "dot-bomb" fails were a quest for market-share above all else. "If we build it, they will come, and then we'll figure out how to make money." That's why the "???" shows up in that particular business plan meme. [thesweetmelissa.com]

        Consider that it takes a big hunk of money to build a cell tower and connect it to the local telephone system. But actual operating costs are pretty low. So most of the money they make selling access is profit. Also, there aren't too many companies competing in these markets, so you can prett

  • Digicel is in Tonga (Score:5, Informative)

    by Anonymous Coward on Wednesday September 22, 2010 @07:54PM (#33670470)

    This post was made from a Digicel connection from my yacht (currently in Tonga).

    Digicel works better than some Pacific internet connections. It isn't fast, but no connections are out here. It is relatively affordable: eight hours of internet time in Tonga is ~USD15, while eight hours in French Polynesia is about EUR40 (USD55).

    • Re: (Score:3, Funny)

      by RMH101 (636144)
      You're posting from a yacht in Tonga? A million basement-dwellers salute you.
    • Re: (Score:3, Insightful)

      by tehcyder (746570)

      This post was made from a Digicel connection from my yacht (currently in Tonga).

      Taking a break from the champage, coke and hookers eh?

  • danger (Score:1, Funny)

    by Anonymous Coward

    How do they get wireless routers to operate in an environment filled with so much fear? I'd be dropping packets left and right. "Is that guy going to kill me?! checksum error." "That guy has a knife! No route to destination." Packet, packet, packet, pac--ARGH, THEY GOT ME!

    • Re:danger (Score:5, Informative)

      by grcumb (781340) on Wednesday September 22, 2010 @08:07PM (#33670586) Homepage Journal

      How do they get wireless routers to operate in an environment filled with so much fear? I'd be dropping packets left and right. "Is that guy going to kill me?! checksum error." "That guy has a knife! No route to destination." Packet, packet, packet, pac--ARGH, THEY GOT ME!

      Heh, yeah. Here in Vanuatu at least one tower was dragged down by locals because of a land dispute.

      By and large, though, people tend to protect the things they value. This Forbes profile of Denis O'Brien [forbes.com] reports that, during a period of rioting and looting in Haiti, people actually guarded the towers, because they saw Digicel as being on their side.

  • by citizenr (871508) on Wednesday September 22, 2010 @07:59PM (#33670518) Homepage

    said Digicel's billionaire president

    hence Digicel's $4.3 billion debt

    • The president may be a billionaire, while the company he manages has spent more than it has brought in. BTW I wonder how they plan to get out of a 4.3 billion dollar hole. US Cellular, which operates in a much wealthier, more mature market, has a revenue (total business) of only $3.93 billion and a net income (profit after expenses) of only $216 million.

    • Re: (Score:3, Insightful)

      by DerekLyons (302214)

      Being a billionaire means you have billions of dollars worth of assets, the debt or lack thereof of a company you work for is utterly irrelevant.

      • by tehcyder (746570)

        Being a billionaire means you have billions of dollars worth of assets, the debt or lack thereof of a company you work for is utterly irrelevant.

        Being a billionaire means you have billions of dollars worth of net assets. The debt or lack thereof of a company you work for is utterly irrelevant unless the value of shares that you hold in that company is included in your calculation of your net assets.

  • Interesting. (Score:4, Informative)

    by Leebert (1694) * on Wednesday September 22, 2010 @09:43PM (#33671308)

    I was just in Haiti over the weekend. On my prior trip in 2007, Digicel was everywhere. This time, it was Viola, and relatively little Digicel. My phone connected to Viola. In fact, Digicel wasn't even listed in the list of carriers on my iPhone when I checked. I was actually wondering if they still existed.

    What's striking about Haiti (and, from what I'm told from missionary friends, parts of Africa) is how many people have cell phones. People who don't even have electricity in their homes run around with cell phones. When you wander around the mission I was working at, everywhere you go there is a cell phone plugged in and charging. Viola even has charging stations at retailers in Port-au-Prince.

    • by cerberusss (660701) on Thursday September 23, 2010 @06:41AM (#33673500) Homepage Journal

      When you wander around the mission I was working at, everywhere you go there is a cell phone plugged in and charging.

      They do that. My workplace and recently my home got infested. The little buggers creep out and about, and sneakily insert their appendages into wall sockets. Sucking energy until their little metallic bodies are bloated, their tiny bars pulsing with power. I see them everywhere. They aim their tiny energy rays at my balls, slowly dehumanizing me. Yesterday, one started talking to me and I crushed it under my combat boots. I've been preparing. I'm ready for them. I'm going to kill each and everyone of them.

    • by Jawnn (445279)
      You keep using that word (Viola). I not think it means what you think it means. Large stringed instruments are not very good wireless carriers.
  • "including Haiti and Papua New Guinea, whose capital, Port Moresby, has one of the highest murder rates in the world"

    I wonder what counts as "high". For comparison: (1999 BBC article [bbc.co.uk], 2008 Foreign Policy article [foreignpolicy.com], and Guardian 2009 [guardian.co.uk]).

    Caracas 130 per 100,000
    New Orleans est. 67 (pd) to 95 (fbi) per 100,000
    Cape Town 62 per 100,000
    Washington DC 69.3 per 100,000
    Port Moresby 54 per 100,000
    Detroit 40.6 per 100,000
    Papua New Guinea 15.2 per 100,000
    Moscow 9.6 per 100,000
    Haiti 5.3 per 100,000.
    London 1.8 per 100,000

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