Friday 27 April 2018

Denis O'Brien investing up to $450m on ocean telecom cables

‘Apple played by the rules,’ Denis O’Brien said, criticising the ruling by European Competition Commissioner Margrethe Vestager
‘Apple played by the rules,’ Denis O’Brien said, criticising the ruling by European Competition Commissioner Margrethe Vestager
Donal O'Donovan

Donal O'Donovan

Businessman Denis O'Brien has revealed plans to personally invest as much as $450m (€403m) on a network of undersea telecoms cables linking dozens of countries in the Caribbean.

The Digicel founder outlined the plan in a wide-ranging interview with Bloomberg Television's Vonnie Quinn that also included harsh criticism of the European Commission's Apple tax ruling.

Regarding the underwater project, Mr O'Brien said that it is "one project that we are doing off balance sheet, which I am going to do personally.

"We are going to lay submarine cable to about 30 countries. That project is about $350m, but we're thinking about upscaling it to about $450m to go up to about 40 countries in the Caribbean region, putting high capacity, modern, submarine networks into those countries," he said.

Mr O'Brien's main Digicel business operates telecoms and communications businesses in 31 markets across the Caribbean, Central America and Asia Pacific. However, the submarine cable investment is being done outside of the Digicel group.

"That would be a personal project," he said.

European Commissioner Margrethe Vestager
European Commissioner Margrethe Vestager

In addition, Digicel itself has invested $1bn over the past 18 months, including rolling out fibre to the home across markets where the group operates, he said.

Last October Digicel shelved plans for a $2bn stock market listing, citing market conditions. In his latest interview Mr O'Brien said that the company may revisit the stock market flotation plan if the market improves.

"We look upon this opportunistically. We were very fortunate that we never had to go and sell shares in the market," Mr O'Brien said.

"If the market changes we'll probably look at doing an IPO again but at the moment it is not imminent because the market is too unstable," he said. In the meantime, he said Digicel business is growing, and will go into "positive territory" in next 18 months after being hit by the impact of currency swings in some of its key markets, including Haiti and Papua New Guinea.

The group is looking at potential bolt-on acquisitions, and Cuba could be an "interesting" market if the country opens up, he said.

However, he effectively ruled out expansion into Africa, an emerging markets region where Digicel does not operate, saying the plan is to focus on investments in markets where the group already has a presence.

Away from his own interests, Mr O'Brien said US technology giant Apple should not be punished for its tax arrangements in Ireland.

The European Competition Commissioner, Margrethe Vestager, has ordered the Irish Government to collect €13bn in back taxes from Apple, that the Government here says is not owed.

"Apple played by the rules," Denis O'Brien told Bloomberg Television. "Brussels is out of control in terms of the federalism agenda," he said.

"Vestager just picked on them because they are one of the biggest brands and most valuable companies in the world and said 'we're going to try something here'," O'Brien said. "I don't believe it's going to succeed."

Mr O'Brien, who is a shareholder in INM which owns the Irish Independent, said that with the exception of Ireland, Europe was not a great place to invest. "Europe is in a pretty dangerous place at the moment.

"I think Brussels is out of control in terms of the federalism agenda. I think smaller countries are also concerned about giving up a lot of the decision making to Brussels.

"And also I think the handling, and I have a lot of sympathy for immigrants coming to Europe, the handling of the immigration crisis was a fiasco," he said.

"Europe is not a great place to invest right now. I'd single Ireland out. Ireland is the shining light right now. We've made a fantastic recovery from the banking crisis that we've had.

"And despite Brexit, it really puts attention back on Ireland as a great place to invest because you've got a highly trained workforce and proper governance and rules there."

Irish Independent

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