Cellular phone service provider, Digicel Jamaica, expects to break even by March this year, giving it the confidence and platform it says, to launch a landline service by next year.

The company says that the move from the red into the black exactly three years after it began service in Jamaica, would come three years ahead of the initial projection - the result of a faster paced revenue and customer growth than had been anticipated.

"Although we had a loss in the first two years of operation...the company expects to turn a profit this financial year, three years ahead of forecast," David Hall, Digicel's chief operating officer, told the Business Observer. "Digicel remains heavily indebted - but this is expected in an industry like this where the set-up costs are huge. Overall, we are extremely happy with our first three years in Jamaica."

Digicel, owned by Irish investors who in 1999 paid the Jamaican government US$47 million for the cellular licence, has had to borrow billions of dollars in order to build out its infrastructure to keep up with the frenetic demand for its service.

But in April 2003, the cellular service company successfully negotiated longer terms for its US$200-million (J$12 billion) loan, from three and four years to seven years - thus reducing its debt burden. As part of that arrangement, the company, according to Hall, has the option to borrow an additional US$55 million.

Hall told the Business Observer that in its foray in the land line segment of the business, Digicel would try to avoid some of the pitfalls that have seemingly hamstrung its competitor, Cable & Wireless, by focusing on the business segment of the land line service.

"In Jamaica last year, C&W announced that the number of land line actually fell by 50,000. Therefore, we will go into land line - but we will concentrate initially on the corporate market," Hall told the Business Observer. "Yes we are definitely going into that next year but we will still concentrate on our core business."

Cable & Wireless had attributed the decline in its land line service in part to customers who ran up thousands in telephone costs, and opt out of the service rather than settling those debts.

Digicel says it expects to cross the millionth customer landmark by March this year, and that some US$80 million of the money it has borrowed will be used to develop cell sites between September 2004 and March 2005.

"[It will bring] coverage to 31 new areas in Jamaica," says Hall. "This will bring our number of sites to over 560 and will give us 95 per cent population coverage and 88 per cent location coverage in Jamaica."

Digicel captured the lead in the mobile market-from C&W-a year and nine months after it began business in April 2001. It has 558 direct employees with another 3,000 employed indirectly via card outlets, dealer shops and phone distributors.

It has however had to rely heavily on loans for its rapid infrastructure development.

The loans on which payments were extended are still provided through Digicel's original creditors-

. The International Finance Corporation (The World Bank);

. National Commercial Bank of Jamaica;

. The Royal Bank of Trinidad & Tobago;

. and Erricsson Credit AB.

New creditors include- Citibank NA; Nordea Bank Sweden; Export Development Bank Canada; Neederlander Financierings Maatschappij vour; and Ontwikkingslanden NV.

At the time of the acquisition of the licence, Digicel said it would use Jamaica as a springboard for a launch into the region. The directors have so far fulfilled that commitment. For, having invested some US$500 million in the region, the company now provides service in Jamaica, Grenada, St Lucia, St Vincent & the Grenadines, and Aruba and is seeking licence for Trinidad & Tobago. The company will also begin servicing the Cayman and Barbados markets by April 2004.

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