Rock Mobile invests $ 13 billion in telecommunications network | Business
Rock Mobile plans to invest US $ 90 million ($ 13 billion) over the next few years to build a fully-fledged telecommunications service network that will face big hitters Digicel and Flow Jamaica for market share, but no do not intend to compete on voice services.
The company, however, will focus primarily on providing Internet services across Jamaica, Executive Chairman Bruce Bowen said in an interview with the Financial Gleaner.
Bowen will build his start-up during an economic downturn resulting from the pandemic. But he’s no stranger to running a business in times of crisis, having led Scotiabank in Jamaica and leading it through the global financial crisis more than a decade ago.
“Wherever there is a crisis, there is an opportunity,” Bowen said, reciting a popular maxim.
The company will be marketed as Rock Connect, with the latter part of the name being deliberately chosen, Bowen said, to remove any ambiguity about the services it will offer. Connect could provide all the services that Digicel and Flow offer, but the company doesn’t want people to think they’re entering the mobile voice market, he said.
“The whole business model is data and broadband driven. We are entering the market as Connect, ”he said.
Bowen said he and his wife, Suzanne Fernando-Bowen, who is also a shareholder in Rock Mobile, surveyed the region for technology gaps, which indicated that Jamaica offered an opportunity to expand broadband connectivity. .
“What’s missing is that only 60% of Jamaicans have internet access,” he said, adding that the company aims to increase internet penetration by 50%.
Demand for data has increased with the onset of the pandemic, as workers and students migrate online and e-commerce activity intensifies. Bowen said demand for data continues to grow 25 to 30 percent per year, but infrastructure is lagging behind that growth.
Just this week, Technology Minister Daryl Vaz said the Jamaican government would seek to connect more schools to the internet and those already connected would see the cost of coverage suspended.
“Ardenne High was paying US $ 5,000 per month to provide students with a private supplier. Now for two weeks they have been paid zero, “Vaz said in an address to parliament, and can now use” that extra US $ 5,000 per month to help offset other costs to improve educational content, “he said. he declared.
Bowen, when asked about the cost of providing internet service to schools and customers, declined to give details at this time, citing competitive reasons, but noted that some schools appeared to be paying a lot.
“Our plan is to provide affordable service. Some people in some communities have affordable and decent service, but there are people who aren’t, ”Bowen said of schools connectivity and pricing. “Some customers, whether school or private, do not have access today,” he added.
Rock Mobile won the recent tender to provide Internet service in 200 mostly rural and underserved communities, using wireless technology, including 4th generation cellular technology. There are two ways to connect to the Internet – wireless or fiber, he said. Wireless technology allows the business to quickly cover great distances.
“We can send it to them quickly and inexpensively by wireless. The cost of setting up the fiber optic infrastructure is a different cost, ”he said.
Rock Connect plans to officially launch in 2022 with 50% population coverage. Over time, the company will increase that number to cover 90 percent of the population – a target not only incorporated into Rock’s business model, but is also a requirement of its telecommunications license.
“In the first two years, we’ll have a total investment of $ 90 billion or $ 13 billion. So far we’ve spent around $ 1.5 billion and are waiting for things to fall into place before the big bucks are spent on towers, and so on, ”Bowen said.
The company currently has 15 employees, but its workforce will grow to 250-300 in two years, including employees and contractors.
“You don’t need a huge team to provide the service,” he said.
At the start of telecommunications liberalization in the early 2000s, independent players retreated in part because of the inability to compete on price with the incumbent, Cable & Wireless Jamaica, which owned the fiber optic ring. connecting Jamaica.
Bowen noted that while the incumbent still owns the bulk of the fiber infrastructure, telecom providers now operate in a different environment and are more willing to team up to increase the use of expensive technologies, thus distributing the costs.
“I think the industry will move towards a model of increased infrastructure sharing. This is one of the stated objectives, ”he declared.
Rock’s investment reflects a mixture of primarily equity and debt. The funding comes from a team of investors, including Bowen, and debt negotiated by an investment bank. The company wants to be listed on the Jamaica Stock Exchange in the future, but that depends on the growth of the business.
“We have hired an investment bank on the debt side and there is a team on the equity side. In terms of signing up, we would definitely want to do that, but I think the right thing to do is to settle in and establish yourself first, ”he said.