Television seen as key to Digicel's future prospects
A push into cable television will be key to future growth for Digicel, following a planned stock market flotation, according to an analysis of the Denis O'Brien-owned telecom firm's prospects on US-based investors' website Seeking Alpha.
In June Digicel Group announced plans to sell shares in an initial public offering and to list on the New York Stock Exchange. The price or the number of shares to be sold have yet to be determined.
Irish-owned Digicel is focused on the mobile-services markets in the Caribbean and South Pacific. It operates in 31 countries. Analyst Chris Katje, writing on the influential Seeking Alpha finance website, tipped the new stock as a way to invest in the growing Caribbean and South Pacific regions.
Digicel's revenue comes mainly from its mobile phone operations, however Katje said the firm's relatively small cable television unit is a potential engine for future growth.
Digicel currently offers cable services in nine markets, but cable TV penetration is low in the countries where it operates.
However, the rise in the number of its customers using smartphones means the audience for Digicel's TV offering is set to grow sharply, according to Katje's assessment.
On the negative side, Katje said Digicel's far-flung operations make currency swings a business risk, as is competition, including from John Malone- backed Cable & Wireless.
Chris Katje said: "Digicel is quickly evolving into a total communications provider with telephone, cable and other services. The company has dominant market shares in many regions and offers growth through several ways, with the biggest ones being expansion of offerings and improving economic conditions."