Caribbean-based mobile phone company Digicel continues to improve its profits following the announcement earlier this year that it had reported its first net profit since its launch in 2001.

For the 12 months to March 2009, Digicel reported a profit of US$41 million, compared to a loss of US$74 million in the previous year.

Earlier this week, Digicel reported a 10 per cent increase in its half-year profit to US$364 million on revenues of US$857 million (spelling a three per cent increase in revenues). This comes in the context of earnings before interest, tax, depreciation and amortisation (EBITDA).

According to a press release, Digicel – which operates in 32 countries in the Caribbean, Central America and the South Pacific – has seen a seven per cent increase in its subscriber base in the past 12 months and now has 7.3 million customers in the Caribbean and El Salvador.

Digicel’s entire subscriber base has grown from 7.6 million at September 30, 2008 to 10.3 million at September 30, 2009, representing an increase of 35 per cent. It is the dominant force in the Caribbean and threatening the established players in Central America. It has revolutionised the sector in the South Pacific, bringing a competitively priced reliable service which continues to see growth of its subscriber base.

For the year ended March 31, 2009, EBITDA came to US$680 million, a 34 per cent increase on the previous year while revenues rose by 11 per cent to US$1.73 billion with the company’s subscriber base climbing to 9.2 million, a 34 per cent increase. Digicel’s net debt for the year ended March 2009 was US$2.7 billion.

Digicel’s EBITDA margin for the most recent quarter came to 44 per cent – the fifth successive quarter it has been over 40 per cent.

“We have demonstrated that with disciplined cost control and relentless focus on giving customers what they want, companies can continue to thrive even in challenging times,” said Digicel’s Group CEO Colm Delves.

Jamaica grows

Digicel first rolled out in Jamaica before establishing itself across the Caribbean. It is also headquartered in Jamaica. For the period under review, the company is reporting a seven per cent increase in revenue growth with just over two million subscribers in the country. In Jamaica, it is undoubtedly the market leader in mobile service. In October the company announced its intention to move its Jamaica and Group headquarters to a brand new facility located in downtown Kingston. Last week, new mobile rival Claro Jamaica, a subsidiary of America Movil, said that it had added more than 92,500 subscribers to its network during the September 2009 quarter alone.

“One million wireless subscribers were added in the Caribbean market for the first nine months of the year (representing a 33 per cent increase over the comparative period in 2008, with 185,000 of those obtained in the last quarter.,” Claro said in a news release. “This suggests that aside from its strength in the island, the impressive operation of Claro Jamaica is also fuelling the growth of the wireless subscriber base for Claro Caribbean. In fact, the local operation accounts for more than half of the 185,000 additional subscribers in the last quarter alone.”

Reacting to Claro’s claims, Delves said: “We don’t see any of the competition having an impact on our market share, so any claims to the contrary are questionable. We grew our subscriber base for the first six months of the year and we anticipate that will continue. We will be bringing WiMAX to Jamaica which, in effect, is 4G broadband technology – another first for Jamaica.”

This year, Digicel successfully went to the international capital markets for financing. In July it completed a US$160 million high-yield bond issue that was more than two times over-subscribed. This, the company said, will go some way in assisting to further its expansion efforts. It is now vying with Vodafone to win a licence in The Bahamas and in September announced the acquisition of Orange Dominica, a subsidiary of France Telecom.

4G Broadband

Digicel is now seeking to change the data landscape in the region, announcing plans to launch its Digicel Broadband Service next year. The company secured a licence in the 2.5GhZ spectrum, allowing it to roll out 4G WiMAX personal wireless broadband with speeds significantly faster than current 3G offerings.

The company said it paid US$1.2 million for its licence and will invest US$22.7 million in the first year of its Digicel Broadband Service. Mobile WiMAX is a standard-based technology that will turn cities and towns into Internet hotspots. Set to launch in the second quarter of next year, this new service will initially cover 60 per cent of the total population in all 14 parishes with further roll out taking place during the remainder of the year.

Data as a percentage of revenue has grown by 18 per cent across the Group for the period under review and Digicel expects further growth in this area.

Commenting on the group’s six-month performance, Delves said: “These results demonstrate a strong start to the financial year, with Digicel increasing profits and subscribers even in a tough economic climate. Despite increased competition, Digicel is winning market share as customers continue to prefer the better value offered by Digicel’s bigger, better network.”