Is Digicel Sprinting Toward An IPO?
THESSALONIKI, GREECE - SEPTEMBER 12: Usain Bolt finishes first at 100m men for the IAAF World Athletics Finals main event at Kaftatzoglio Stadium on September 11, 2009 in Thessaloniki, Greece

Seven years ago Jamaican sprinter Usain Bolt electrified the world when he dominated the Summer Olympics in London. Now the company that sponsors him is set to make its own headlines. Digicel, the Jamaica-based mobile telecoms operator, has been gearing up for an IPO later this year and could offer shares worth as much as US$ 2 billion to the public. On 11 September individuals “with knowledge of the matter” reported that Digicel was awaiting the upcoming Fed interest rate decision before choosing whether to proceed with a listing on the NYSE.

Digicel, owned by the Irish billionaire Denis O’Brien, offers a unique level of exposure to economic growth in island nations throughout the Caribbean and South Pacific. It is active in 32 markets and retains over 50% market share in 20 of them. Yet Digicel’s recent SEC registration filing may raise more questions than it answers. Both revenue and ARPU (average revenue per user) have decreased slightly in the past two years. And, with more than 25% of its revenues coming from impoverished Jamaica and Haiti some might wonder just how much growth potential can still be captured. One bright area is cable television, where the company’s revenues nearly tripled last year after it began to offer cable in markets where such services are nearly nonexistent. One thing is certain; with some analysts attaching a pre-IPO valuation of nearly US$ 10 billion to the company, Digicel is certain to attract attention amongst emerging markets investors.

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