Hiking along the Kokoda Trail in remote eastern Papua New Guinea last summer, Denis O’Brien discovered he didn’t have a mobile phone signal. The sturdily built Irish telecom tycoon knew how to fix that. He stormed into the local office of Digicel, the wireless operator he’d founded in 2001, and demanded that extra phone towers be built along the route.
The new masts will add to a network O’Brien’s company began building in 2006, the same year the United Nations classified the South Pacific nation as one of the world’s least developed. It was good timing, albeit in a rough neighborhood.
“Think of building a network in a country the size of France, with hundreds of islands, no roads and cerebral malaria,” O’Brien says.
As he speaks, he could hardly be farther away from the wilds of Papua New Guinea: He’s dressed in a blue suit, sipping tea in London’s plush Chelsea neighborhood.
“I’ve lost nine colleagues in Papua New Guinea building our network — from plane crashes, accidents, car crashes,” he says. “It is the toughest of tough places.”
O’Brien’s willingness to tackle such locations has enabled Hamilton, Bermuda-based Digicel to acquire 13 million customers across 31 markets in Central America and the Pacific as well as the Caribbean, where it’s the largest wireless provider.
“Their strategy is to go in low and hard, picking out small markets that the big players have tended to avoid,” says Steven Hartley, a London-based analyst at Ovum, a research firm. “They do things efficiently and nimbly and basically rip the carpet out from underneath the incumbents.”
Born in Dublin, O’Brien, 55, who owns 94 percent of Digicel, has based many of his companies in the Irish capital, though their reach is often global.
For instance, he has major stakes in aircraft leasing firm Aergo Capital and broadcaster Communicorp, which operates 20 radio stations across five countries, including Newstalk and Today FM in Ireland. He’s also the largest shareholder in Independent News & Media, Ireland’s biggest newspaper publisher.
Like many of his companies, O’Brien has one foot in Ireland and another abroad. He has homes in Sliema, Malta, and the Algarve region of Portugal as well as in Dublin.
He moved from Ireland to Portugal in 1999, shortly before receiving a $288 million windfall from selling Esat Telecom, the Irish company he built in the 1990s, to London-based BT Group for $2.5 billion in 2000. In moving, he avoided paying Irish taxes on the proceeds, according to “A Mobile Fortune: The Life and Times of Denis O’Brien,” by Irish journalist Siobhan Creaton.
Since 2005, O’Brien has been a resident of Malta, saying it’s easier for him to run Digicel from his base there. Living on the Mediterranean island also allows him to legally lighten his Irish tax burden.
The billionaire denies that taxation has ever been a consideration in terms of where he spends his time.
“I pay all my taxes in Ireland — on my income in Ireland, on my dividends,” he says. “But the money I earn around the world, I pay taxes in each of those countries.”
O’Brien is Ireland’s richest native-born citizen, according to the Bloomberg Billionaires Index, which estimated his fortune at $5.1 billion as of Nov. 11. With Digicel, which was valued at $3.7 billion as of that date, O’Brien is emerging as a Celtic Carlos Slim, the Mexican billionaire who controls America Movil, which provides wireless communications in 18 countries. Worth $66.6 billion, Slim is the world’s second-richest man, according to the index.
Married with four children, O’Brien leads a peripatetic lifestyle, clocking miles on his Gulfstream G650 jet.
Although he regularly attends the four-day-long World Economic Forum in Davos, Switzerland, he hasn’t bothered staying overnight in recent years. In January, he spent 10 hours on the ground at the ski resort for a round of meetings with, among others, Hungarian American investor George Soros and Indian telecom mogul Sunil Bharti Mittal.
While a student at University College Dublin, O’Brien set up a house- and office-painting business before winning a scholarship to study for an MBA in 1980 across the Atlantic at Boston College.
Two years later, after a stint with Trinity Bank, a small Dublin merchant bank, O’Brien went to work for the late legendary Irish billionaire Tony Ryan as his personal assistant at Guinness Peat Aviation, the world’s largest aircraft-leasing company at the time.
The “brilliant” Ryan — who in 1985 founded Ryanair, which would become Europe’s largest budget airline — was the first Irish businessman to make a global name for himself, O’Brien says.
“Ireland is famous for the arts, music, Seamus Heaney, playwrights,” O’Brien says in his Irish brogue. “We weren’t famous for business.”
With Digicel, O’Brien is emulating his mentor’s success, says Jill Tully, a London Irish Business Society board member.
“He’s had worldwide success, though he’s still recognizably Irish,” she says.
Before success came failure. In 1989, O’Brien set up Home Shopping Television Network Ireland, a satellite shopping channel modeled on a similar U.S. channel begun seven years earlier. O’Brien’s outfit folded after 18 months.
“You need a good failure early on,” O’Brien said, calling his shopping channel “a whopping one.”
He did better with Communicorp, which he also established in 1989, and Esat Telecom, a fixed-line operator that came two years later. The latter took a 40 percent stake in Esat Digifone, a consortium O’Brien formed with Irish financier Dermot Desmond and Fornebu, Norway-based mobile phone provider Telenor. The group won an Irish cellphone license in 1995.
O’Brien sold Esat Telecom five years later — at the top of the market — as he fought off a hostile takeover bid from Telenor. On the lookout for places to invest his windfall, O’Brien headed to the Caribbean after seeing an advertisement placed by the Jamaican government seeking bids for a mobile license.
License in hand, O’Brien organized a marketing blitz at the network’s April 2001 debut that pulled customers from the incumbent operator, Cable & Wireless Communications.
Digicel plastered street corners in Kingston and Montego Bay with the company’s red logo, heavily subsidized the price of handsets and billed customers by the second rather than by the minute, undercutting the competition. Since 2004, the company has sponsored Olympic sprinter Usain Bolt.
“Digicel’s launch in Kingston was one of the biggest I’ve seen of any business venture,” says Mark Wignall, a columnist at the Jamaica Observer newspaper. “He used people who knew how to market to Jamaicans. He understood the Jamaican psyche and played on it to the full.”
It worked. Digicel reached its first-year target of 100,000 customers within 100 days, according to Creaton’s biography. As more and more neighboring nations opened up their mobile phone markets, Digicel island-hopped across the Caribbean Sea, adding customers before expanding into Central America.
O’Brien says the Caribbean experience bolstered Digicel’s bid this year for the first mobile phone licenses in Burma, the Southeast Asian nation that is granting outsiders access to its markets after decades of isolation and military rule.
Even so, in June, after months of jetting to and from Asia and accumulating more than $30 million in bid costs, he learned he had lost out to Telenor and Qatar’s Ooredoo.
As with the Home Shopping setback, O’Brien says he’s not going to spend time peering into his rearview mirror.
“You’ve got to keep moving,” he says. “I was very surprised we didn’t win, but I heard in the morning at 9 o’clock, and by 4 in the afternoon, I’d moved on. We’re looking at opportunities every day. It’s a bloody long list.”
Ethiopia may be on it, Ovum’s Hartley says. Mobile phone penetration in the Horn of Africa nation is less than 25 percent compared with about 60 percent across the rest of the continent in 2012, according to data compiled by the Geneva-based International Telecommunication Union.
“Ethiopia is clearly the most logical market that anyone’s going to be interested in,” Hartley says.
O’Brien declined to discuss possible targets, though he says he has visited the country many times. “I like going to Ethiopia,” he says. “I normally invest in countries I like visiting that aren’t boring.”
Digicel, which posted revenue of $2.8 billion in the year that ended in March, is wending its way through an industry dominated by deep-pocketed players, such as Slim’s America Movil and Madrid-based Telefonica.
These large competitors, attracted by Digicel’s success in less-developed markets, are beginning to encroach on O’Brien’s existing territories and potential markets, Hartley says. America Movil, for example, entered Jamaica in 2007.
“It’s a formidable competitor and also has advantages of scale,” Hartley says.
O’Brien says he can handle the rich competitors.
“People always think that if a company is wealthy, it’s going to kill you,” he says. “We would never have gone to any of our markets if we’d had that attitude.”
As Digicel has expanded, O’Brien has displayed an aptitude for public service and public relations. He says tending to a market and to the people who make up the market go hand in hand.
“You fix their telecommunications requirement, but then you fix something else as well,” he says. “You can’t just leave it to NGOs and charities.”
In 2010, after an earthquake struck Haiti, Digicel’s biggest single market, the company redoubled efforts on a school-building program it already had under way. O’Brien says the Digicel Foundation will have built 150 schools by early 2014.
In his homeland, O’Brien’s business affairs have sometimes caused controversy. In September, he won a decade-long court battle over a 57-million-euro tax demand from Ireland’s revenue authorities from the sale of his shares in Esat Telecom.
Despite his homes and interests abroad, O’Brien remains faithful to his Irish roots and is optimistic about the economy of his homeland. Ireland’s gross domestic product contracted as much as 3.7 percent during the financial crisis, which battered Irish banks and crushed the real estate market. According to a Bloomberg survey of economists, year-on-year GDP growth was forecast to be 0.4 percent in Ireland, outperforming the rest of the euro zone, where output was expected to fall 0.3 percent.
“I’m a believer in Ireland more than ever,” O’Brien says.
That should help O’Brien as he looks after his diverse, globe-spanning portfolio. In describing the task over tea in Chelsea, the billionaire reverts to an analogy.
“It’s like having six or seven sheep going up the side of a mountain in Ireland and trying to keep them all going up it,” he says. “You’ll have one or two sheep trying to duck away. You might have four sheep flying up the mountain. It’s about getting them all up the mountain.”
The full version of this Bloomberg Markets article appears in the magazine’s December issue.