Slick sell propels Digicel to Caribbean supremacy

Esat has been the model for Denis O'Brien's West Indies mobile success story, writes Colm Keena

Esat has been the model for Denis O'Brien's West Indies mobile success story, writes Colm Keena

During the recent cricket test match clash between Pakistan and the West Indies a significant percentage of the 40 million population of the Caribbean was glued to their television sets or listening in on radio. The West Indies team was playing at home, in Jamaica.

That same weekend the largest horse-racing event of the year was taking place in Kingston, the Jamaica Derby.

In both instances the events were heavily sponsored by Denis O'Brien's Digicel, the pan-Caribbean mobile phone network that has been built in the last four years by him and a team of his close colleagues from his Esat Digifone/ Esat Telecom days.

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As with Esat Digifone, Digicel is noticeable for its young, hard-working staff, its marketing of its product as a youthful, consumer brand, and its brashness. Digicel-branded T-shirts are everywhere. Jamaican business people say the island has never before seen as brash and as comprehensive a marketing campaign as that being operated by Digicel, and that it has brought marketing on the island to a whole new level.

When O'Brien and his colleagues bought the Jamaican licence in April 2000, a second licence was sold the same day to a US outfit called Centennial. However, Digicel worked like the clappers and got its network up and running six months before the Americans.

On the night of the launch, in April 2001, the company organised a party that took place in Kingston and Montego Bay, connecting the two events by satellite, and sparing no expense. A major splash was made, drawing huge attention to the company.

"By the next morning, Centennial was dead," says David Hall, who has been with Digicel since the outset and has recently been appointed chief executive of the Jamaican operation.

Jamaican businessmen say the launch was far and away the largest marketing splash ever seen on the island. The spending began before the service came on stream.

"Digicel had established a great brand before the first call was made," says one Jamaican businessman.

The main influences behind the Digicel marketing campaigns are O'Brien and his fellow Digicel director and former Esat colleague, Lucy Gaffney.

The incumbent monopoly player in Jamaica in 2001 was Cable & Wireless. Digicel set out to create better coverage than C&W and to win their customers and keep them.

"We targeted ourselves as an FMCG," says Harry Smith, a well-known Jamaican businessman who left his job marketing Red Stripe and Guinness in Jamaica in 2001 to join up with Digicel prior to its launch.

An FMCG is a "fast-moving consumer good", the Digicel Jamaica commercial director explains.

A marketing strategy that targeted the various segments of the Jamaican market was devised, sponsoring events such as gospel music festivals, carnivals, jazz festivals, the Jamaican agricultural show, and the Jamaican national football team, the Reggae Boyz.

Even C&W agrees that its responses to Digicel's marketing ploys tended to be too slow, and even when it did respond, Digicel would react again in turn within days. C&W, a telecoms company with its headquarters in London and its roots in Britain's colonial days, just couldn't manage such response times.

"We lost the market," says Ian Neita, vice-president, sales and marketing, with C&W in Jamaica.

Neita started out with Digicel and then moved to C&W. When still with Digicel he was sent to Ireland to see the network of dealers with which Esat Digifone had its arrangements. He says the strategy adopted in Jamaica is very like that used by Esat in Ireland.

The greatest marketing coup by Digicel, however, was its taking on the sponsorship of the West Indies cricket team.

Digicel is a pan-Caribbean mobile phone service provider. The Caribbean has a population of approximately 40 million but is not by any means a homogeneous political or cultural entity. There are very different cultures and a range of languages. One thing that does unite the Caribbean is its university, and Digicel has now sponsored a chair of telecommunications studies there.

The biggest unifier in the Caribbean, however, is its West Indies cricket team.

For years the team was sponsored, for its home games, by C&W. A few years ago O'Brien got the idea that Digicel should take over the sponsorship from C&W, if it could. He hired a London-based sports management company, LSM, and it began to devise a package and initiate talks with the West Indies Cricket Board.

The board did not know for whom LSM was acting. When the C&W sponsorship deal came to an end, negotiations began on a new one.

C&W ended up being replaced. It seems the company may have assumed it was being replaced by a UK drinks company. When it found out it had been replaced by Digicel, it was too late.

After the event it entered into new personal sponsorship contracts with six of the team's players, creating obvious conflicts that for a time convulsed the world of West Indian cricket.

"The deal involves a very substantial spend," says Sarah Gill, group commercial director with Digicel. "We will spend $50 million [ €41.5 million] over five years. The key objective is regional exposure but the brand is getting global coverage also. Digicel has very aggressive expansion plans."

The spend involves $20 million going to the cricket board over five years, with a further $30 million being spent by Digicel on related marketing. It supports TV coverage of the home and away games, ensuring increased exposure for the games in the group's regional market. When playing at home the team plays in various Caribbean locations, giving the company an excellent opportunity to target corporate clients and raise its profile generally.

"Digicel is very much a success story," says C&W's Neita. "O'Brien built a marketing company. They portrayed themselves as young, alive, monopoly-busters. The subtle message was that C&W was holding the people back."

While C&W has been knocked back into a minority market position, however, he points out that the smaller slice is of a much larger cake. In 2001 C&W had 270,000 mobile phone subscribers (100 per cent of the market).

Competition has driven prices down and increased mobile phone usage, and C&W now has 700,000 subscribers (30 per cent of the market).

Stephen Brewer, who went head to head with O'Brien when he (Brewer) was with Eircell in Ireland, worked with C&W in Jamaica for a year but has recently left. It seems Brewer wanted to concentrate on trying to win market share back from Digicel, while others in C&W wished to put the emphasis on growing the company's income from the subscribers it has.

"The market has now matured and we will compete with Digicel on service, not price," Neita says.