25517 - Digicel Samoa

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Summary of Proposed Investment

Project Number

25517

Company Name

Telecom Samoa Cellular Limited

Date SPI Disclosed

Oct 16, 2006

Country

Samoa

Industry

Telecommunications and Technology

Projected Board Date

Nov 17, 2006

Status

Completed

Sector

Mobile Telephony

Department

WBG Digital and AI

Environmental Category

C - No Impact

Previous Events

Approved : Jan 22, 2007
Signed : Feb 14, 2007
Invested : Feb 27, 2007

Project Description

Digicel Pacific Limited (Digicel Pacific or the sponsor) is a sister company of Digicel Limited, an international provider of GSM telecommunications services with operations in twenty-two countries throughout Latin America and the Caribbean including Anguilla, Antigua & Barbuda, Aruba, Barbados, Bermuda, Bonaire, the Cayman Islands, Curacao, Dominica, French Guyana, Grenada, Guadeloupe, Haiti, Jamaica, Martinique, St. Kitts & Nevis, St. Lucia, St. Vincent & the Grenadines, Trinidad & Tobago and Turks & Caicos. Since commencing operation in Jamaica in April 2001, Digicel has become the largest GSM operator in the Caribbean region and continues to distinguish itself from incumbents through competitive tariffs as well as superior quality, functionality and service.

The project consists of financing the acquisition and nationwide build-out of a GSM digital mobile telephony network in Samoa, sponsored by Digicel Pacific. The project will be implemented by Telecom Samoa Cellular Limited (TSCL or the Project Company). Digicel Samoa Limited (a subsidiary of Digicel Pacific) has acquired 90% of TSCL from Telecom NZ.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	8.15
Equity

Development Impact

The project involves the rollout of a nationwide GSM cellular network in Samoa, offering a wide range of standard and value-added mobile services.

Given the poor state of existing telecommunications infrastructure, the project will have a significant development impact to both individuals and businesses in Samoa. Mobile telephone density is 17.2 per 100 inhabitants, which ranks it fourth among the islands in South Pacific region. Further, telephony in Samoa remains expensive and is accompanied by poor coverage and quality.

By increasing the quality and availability of telecommunications services in Samoa, this project will improve the availability of reliable and affordable communications for consumers and businesses. With the entry of Digicel, the company projects mobile penetration in Samoa should more than double from 17.2% to 37% by FY07.

The project will also support the telecom liberalization process of the Government of Samoa. Samoa began the process of liberalizing the telecommunications sector in 1999. Since that time, only one mobile operator has since been present in the market. This Project will further enhance the quality of service offered to consumers, which is a goal of the Government.

By supporting this Project, IFC will provide long term funding in a priority frontier market in which private financing from local and international commercial banks is scarce. IFC’s investment in the new network will also help an emerging competitive market to develop, increasing telecommunications usage nation-wide, improving the efficiency of the business sector and increasing connectivity between Samoa and the global community. Furthermore, through this Project, IFC is also supporting a former client, Digicel, who has demonstrated a clear track record of improving the regional economy, promoting regional integration and improving global competitiveness commitment to geographic area in which it enters (as can be seen from its Latin American and Caribbean regional strategy).

This project is provisionally assessed to be Category C according to IFC''s environmental and social review procedure, based on IFC''s long-term relationship with the sponsor, and because there are limited environmental and social impacts which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project will consist of appraising environmental and social information submitted by the sponsor. The sponsor will be expected to implement Digicel''s corporate environmental and social management system in Samoa, incorporating IFC and Samoan social and environmental standards, and provide IFC annual environmental/social reports.

Contacts

For Inquiries About the Project, Contact

Dermot Hayes
Island Capital
6th Floor
1 Grand Canal Quay
Dublin 2
Ireland
Tel: +35314325953/Fax: +35314325959

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. 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 Policy on Disclosure of Information that went into effect April 30, 2006.

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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