Providing Wireless In the World's Most Dangerous and Remote Places 40
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."
port moresby (Score:1, Interesting)
reminds me of where in the world is carmen sandiego
Telecoms is supply-driven (Score:5, Interesting)
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.
interesting definition of billionaire (Score:3, Interesting)
said Digicel's billionaire president
hence Digicel's $4.3 billion debt
Re:Telecoms is supply-driven (Score:3, Interesting)
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 pretty much set prices as you want, based upon local conditions. Obviously, $70-per-month phone plans aren't going to work where the average person makes $700-per-year. But if you can talk 100,000 people into paying $3 per month (or 5% of their monthly income), that's $300,000 per month or $3.6 million per year. Again, with low expenses, that can be mostly profit.
Re:Fluff article (Score:3, Interesting)
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 decide to sell PS3s because they like challenges. No, they started selling them after online auction sites sold LOTS of PS3s (which they still do), and Nintendo attracted the casual gamer to the Wii.
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. In fact, most online auction sites sell the consoles at half price (still making a huge profit). It's just that companies don't want to take risks, or they make wrong assumptions. For example, the console "for the third world" (Zeebo). What's the point of that? There's like 40 games for that piece of crap, why the hell do they even bother to develop that thing?
Another story is what happened here with the Motorola Milestone (USA: Droid). We weren't going to get the update to Android 2.2 because "people here are not ready for that update", this was said by a CEO of Motorola for Argentina. WTF? A few thousands of angry tweets (#motoFAIL) and the Milestone (which goes for about USD 300-500 here, depending on your plan), and Motorola decided to allow Latam to get the upgrade to 2.2. I still don't understand that move. USA had the update, Europe and Asia will get it, but we weren't going to. Why? It's just software, it's already been developed, why don't release it here too?
So you can see why some things you take for granted in the "first world" aren't even heard of here. Not only we get things 2-3 years later, we get them for 4x the price (even high taxes would count for only 2x the price). They get no promotion (I haven't seen any ads for the Milestone on TV), and are sold as luxury items. I think Motorola's plan with the Milestone was trying to force you to get the Milestone 2 (Droid X) because that one will come with Android 2.2 from factory. Me? I wouldn't buy that crap. After motorola tried to fuck me like that, I'm switching to something else. Also, we're starting to get digital TV on air (it began only a couple of months ago, with Brazil's derivative of Japan's ISDB), so I expect some Japanese sets (Brazilian versions) to start showing up here.