21731 - DECL

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Summary of Proposed Investment

Project Number

21731

Company Name

Digicel Limited

Date SPI Disclosed

Sep 9, 2003

Country

Caribbean Subregion

Industry

Telecommunications and Technology

Projected Board Date

Sep 5, 2003

Status

Completed

Sector

Mobile Telephony

Department

TMT, Venture Capital & Funds

Environmental Category

C - No Impact

Previous Events

Approved : Sep 12, 2003
Signed : Sep 24, 2003
Invested : Sep 30, 2003

Project Description

Digicel is a provider of mobile telephone services which entered the Jamaican market in early 2001. Since then, the Company has succeeded in attracting in excess of 700,000 subscribers, distinguishing itself from the incumbent provider through rates as well as superior quality, functionality, and service.

The currently proposed Project aims to finance Digicel’s expansion into five islands in the Eastern Caribbean: St. Lucia, St. Vincent, Grenada, Aruba and Barbados. The introduction of Digicel to these markets is expected to have the same positive effects to mobile phone coverage, quality and rates as in Jamaica. IFC will not finance Digicel’s operations in Aruba since this island is territory of the Netherlands, an IFC Donor. In addition, IFC will not finance Digicel’s operations in St. Vincent unless it becomes an IFC member.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	13.68
Equity	0.92

Development Impact

This Project involves the setting-up of nation-wide digital GSM cellular networks in five Eastern Caribbean islands offering a wide range of standard and value-added mobile services to the countries. The Digicel group won 15 year GSM licenses in mid-2002 for St. Lucia, St. Vincent, Grenada and Aruba, and is expecting license approval for Barbados by the end of July, 2003.

The Project would help meet the need for better telecommunications services in the Eastern Caribbean islands through the promotion of competition. Digicel will provide competition against the incumbent service provider, Cable and Wireless, as well as AT&T, which recently entered the market. Telephony in the Eastern Caribbean islands is prohibitively expensive, and accompanied by poor coverage and quality. Prior to market liberalization, the estimated mobile penetration in St. Lucia, St. Vincent and Grenada was 13%, approximately. Mobile penetration in Barbados is estimated at around 17%. Competition will reduce tariffs and increase coverage and quality, thereby supporting improved private sector communications. The Sponsors forecast 55% penetration in St. Lucia, St. Vincent and Grenada and 60% in Barbados by FYE 2006.

IFC’s direct investment in the new networks would help the emerging competitive market to develop, increasing telecommunications usage nation-wide, improving the efficiency of the business sector, and increasing connectivity between the islands and the global community. Finally, the investment will also provide a demonstration effect, showing other governments in the region that the liberalization of their telecommunications sectors will benefit their populations and could be followed by international capital inflows.

This is a category C project according to IFC''s environmental and social review procedure. For IFC''s previous investments with the Digicel group -- for Mossel, a mobile GSM telephone subsidiary in Jamaica -- Mossel developed an environmental management system that provides for the identification and mitigation of environmental and social impacts associated with Mossel''s wireless telecommunications operations. Digicel has agreed to apply Mossel''s environmental management system to Digicel Eastern Caribbean Limited''s operations. In addition, Digicel''s environmental annual monitoring report to IFC for Mossel will be expanded to cover Digicel Eastern Caribbean Limited''s operations.
Location of environmental documents In locally affected community

Contacts

For Inquiries About the Project, Contact

Seamus Lynch
Mossell Limited
RKA Building
10 – 16 Grenada Way
Kingston 5, Jamaica
Telephone: +1 876 5115186
Fax: +1 876 9607217

This Summary of Project Information (SPI) is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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