Irish billionaire Denis O’Brien plans ‘massive’ telecoms push

Denis O’Brien, one of Ireland’s richest businessmen, will launch a “massive push” this year to expand his global telecoms business into next-generation mobile and fixed line services.

Digicel, his Caribbean and Central American telecoms group, will invest about $500m in its network in a year when Mr O’Brien said he anticipates a change in the “world order” of the telecoms market. This could have an impact on Cable & Wireless Communications, Digicel’s closest rival, which Mr O’Brien ruled out making a takeover bid for.

“We’re surging capex this year,” he said. “We think there’s great opportunities to go for more market share and new products. We have a massive push.”

However, the media and telecoms billionaire will still take a hefty payout from the business even after the investment plans. Digicel is expected to pay a $650m dividend to Mr O’Brien, who owns about 94 per cent of the private group, although it is headed by chief executive Colm Delves.

“[The dividend] hasn’t been paid yet,” he added, pointing to a net cash position of about $1.1bn. “We have a lot of cash on our balance sheet. The board has to decide what the dividend is going to be but it’s around [$650m].”

The 55 year-old’s net wealth is already estimated at more than $5bn, according to Forbes. Mr O’Brien is a resident of Malta, in part to save on capital gains tax on investments.

The expansion of Digicel comes as the billionaire looks to grow his business interests elsewhere in the world, with a potential listing of China’s third-largest online recruitment company in Hong Kong being considered in the next two years. China HR includes several businesses, such as Monster’s local operations, which it acquired last year, as well as the first jobs website in Myanmar.

“We have 4,000 people working for us in China,” he said. “We just want to keep expanding that business.”

In telecoms, Mr O’Brien said the “world order is changing”, with Digicel positioned for a shake-up driven by large potential mergers or acquisitions. Digicel would remain outside Europe, he added, describing the region’s market as hamstrung by “failed policy” that has meant that operators have struggled with heavy regulation and paid too much for spectrum.

“Europe is not an attractive place to invest, and that’s why you have falling free cash flow and when you have falling free cash flow, what do you do, you just cut investment.”

He said there were no “imminent” flotation plans for Digicel. Mr O’Brien said the private group increased revenues 8 per cent last year to about $2.8bn, with earnings before interest, tax, depreciation and amortisation increasing 11 per cent to about $1.2bn.

Digicel pulled out of the auction to buy Orange’s Dominican Republic business before Christmas, but Mr O’Brien said it was still looking at corporate acquisitions as well as licences in countries such as the Bahamas. Digicel tried to acquire a mobile operator licence in Myanmar last year, but is now focused on building telecoms towers for other operators.

Despite ruling out a bid for Cable & Wireless Communications, he said Digicel could “buy pieces” if another company was to acquire the group.

Mr O’Brien still owns a number of businesses in Ireland, include almost a third of Independent News & Media, the publishing group. Mr O’Brien said that the business was being “turned around” by a management team led by Leslie Buckley, a long-term business partner.

Mr O’Brien is also planning to grow Topaz, Ireland’s biggest petrol retailer, which he acquired control of last year, as well as Siteserv, a construction services business acquired for €45m in the economic downturn. “I’ve been investing heavily in Ireland because I believe in it,” said Mr O’Brien.