Denis O'Brien says Digicel will be under the control of bondholders within the next month.

Digicel Jamaica's headquarters in Downtown, Kingston.

In an interview with Telecoms.com, founder of Digicel, Denis O'Brien revealed that the company will be handed over to the control of bondholders within the next month. He also revealed why the company never rolled out the 5G network in the Caribbean region. 

Digicel changes hands

He revealed that after a complex debt-restructuring process the bondholders will control the company, which will leave him seeking new investment opportunities as he now has "12 hours a day to fill". He was however offered 10 percent equity in the company he formed.

Mr O’Brien said that Digicel’s recent period of debt restructuring was due to higher interest rates and a weaker Haitian currency.

"It’s very simple," he said. "We invested $5 billion. We were borrowing money at 7 to 7.5 percent. It's now 15 percent because of what's happened in Ukraine and interest rates and everything being locked down. Plus we lost $100 million in revenue in Haiti because the local currency declined by 60 per cent. And Haiti was our biggest market. So I could struggle on borrowing money at 15 per cent, trying to make a business out of it or do a debt-restructuring deal for equity. I went to my bondholders and said ‘here are the keys of the kingdom, you run the business’. And they said they would like me to be involved with 10 percent equity in and 10 percent of options. So I've been working with them and they will end up controlling the business in the next month. Life goes on. The main thing from my point of view is that I don't have to work 12 to 14 hours a day anymore. I stepped down as chair to become non-executive. And that kind of suits me at my age to do that. To have a bit of fun."

He further revealed that the process of getting the company's first major Caribbean licence in Jamaica, after he had sold Esat to British Telecom in 2000, was difficult.

"I'd never been to Jamaica and I just sent a fella down and he had a bank draft and we bought the licence," he said.

"And then we kind of went into a panic. We were in Dublin on the phone bidding for the licence and we’re drinking rum. We had a guy called Frank O’Carroll at the auction on the phone. And it was going up and up and up and we were reaching the end of the road. But we bought it for $47.5 million."

5G Roll out stalled

  O'Brien also criticised the roll out of the 5G systems as "a disaster" and said his company will probably not be offering the service. He said that Digicel will only replace Huawei networking equipment if it’s a subsidised process. He also revealed that he refused a request from the former US Secretary of State under Donald Trump, Mike Pompeo, to remove Huawei equipment from Digicel’s network because it would be too expensive.

"He [Pompeo] was saying that we would have to rip out our Huawei equipment and replace it with Western vendors because they didn't want Huawei to be the supplier of 5G to us," he said.

"I think he kind of mistook that he could actually order us to do something that would be a massive cost to us. You're talking about a billion dollars here. I had to explain to him in the nicest possible way that I'm an Irish business guy who has invested all this money in the Caribbean and the Pacific Islands. I can't just rip out my networks. In the US, all the operators that bought Huawei equipment have had the government pay for them to rip it out. They'll have to do the same in the Caribbean because we can't afford it."