Friday, February 12, 2010

Digicel Lays of 55 staff

Well, well,  well. If it is too good to be true, it probably is!


Loyal Fijian previously wrote about Digicel's huge advertising campaign in Fiji and their claims of targeting Fiji as a major market for them. One could not help but wonder how Digicel was going to recover the money they were throwing around to compete with a global giant like Vodafone which was well established in Fiji and why?


Why Fiji?


We all know that the Fijian mobile phone market is not going to turn over billions in profits for any Telco. Then why spend so much money in trying to wrest control of the Fiji mobile phone market? Was it feasible? Or was there something more to it?


The profit margin on the operations in the first five years was always going to be very low. Digicel had to lure customers away from its primary competitor, Vodafone, and the only way to do that was offer very very cheap prepaid packages.


For the Fijian consumer, that's great! Just about every household with mobile coverage has a mobile phone now. And that's fantastic.


But businesses must make money or shareholders are very unhappy!


And so when the news came that Digicel's new CEO Matt Davey, who took over from John Delves, had initiated a review of operations which has seen the sacking of 55 staff, it was hardly surprising.


The gamble is not working. 55 sacked staff for a set up like Digicel is very high. And what now for Digicel?


Will they continue their high visibility marketing campaign and their low cost pre-paid phone sales strategy?


As most will know, Telco's don't make money from selling phones. Nope. Phones are literally free, the money is made by selling recharge cards and that depends on people making regular use of their phones.


But judging by the number of people who have old mobile phones lying around which they don't use, this gamble doesn't seem to be working. In Fiji, one phone is enough for a family.




Anonymous said...

John Delves was a clueless clown. Hope Matt carries genuine interest in his heart to improve the company and not yet another puppet who dances to the tune of senior management.

With the way the staff gets treated, no wonder they are having trouble establishing business in our country.

I was so happy when they came and I am so not impressed that they are here now.

Anonymous said...

I am really glad Digicel came to Fiji. We was ripped off for years by Vodafone and nobody could afford to buy a phone or make calls. They would still be ripping us off if it wasn't for competition coming in and making millions in profits every year.

Eugene said...

Wonder if Matt has managed to get the technical teams improve the phone service between Nadi and Suva especially the Kings highway which Digicel so much boasted about when it launched.

Interestingly, the number of black spots on the highway are more than the potholes.

Get your act together Digicel !