DIGICEL'S MUSICAL CHAIRS AND USE OF PNG AS A CASH COW.

NIUGINI OUTLOOK

The now infamous John Mangoes of PNG Power CEO fame was Digicel PNG CEO until the end of March. Mangoes competency at Digicel was questionable as Digicel service was frequently erratic and some things just seemed never to be fixed. But this past January, it was under Mangoes direction that the new Digicel customer service unit was established under a returning Lorna McPherson and the much hated "no warning message before the voicemail charge" policy was finally done away with. At least that's what we thought. But the voice mail warning has come back on, with no advance warning, in the typical "we don't give a Sh!t about our customers" way. What happened to the supposed commitment to customer service?

Enter Maurice McCarthy, another Irishman seeking to shovel as much money as possible towards Irishman Denis O'Brien, as he struggles under an overall Digicel debt of around USD $6 billion. The last 2 years of Digicel operation have resulted in declared losses of USD $198 million and USD $157 million respectively. In attempt to restructure this debt, Digicel was preparing to hold a public share offering this year. This was cancelled abruptly when it became apparent to O'Brien and others that the money raised was likely to be far below expectations.

In all financial gloom, the PNG market is a refreshing exception. Unlike the stagnant Digicel markets in places like Jamaica and Haiti, where Digicel gets 40% of its cash flow (Digicel operates in a total of 31 markets worldwide), PNG is a growth market. Despite 2 million subscribers, Digicel had only 43% market penetration a year ago. That means lots of room for growth. Digicel intends to push into television in PNG as well as funding an expensive undersea cable from Moresby to Australia to bypass once and for all PNG Telikom's incompetency. That requires a lot of money. In addition, Digicel has always operated on the expansion strategy of using the revenue from countries it is already established in to fund the growth in new markets. Thus, PNG revenue is needed for Digicel's ongoing establishment of a market in Myanmar.

Apparently, Maurice McCarthy has been given marching orders to screw PNG customers as needed to generate more bucks for Digicel's other needs. It is clear that under Maurice McCarthy, customer service comes in last place.

Meanwhile, the CEO he replaced at PNG Digicel, John Mangoes, has been caught redhanded not only milking PNG Power Ltd for every kina he can get for luxury living, but also throwing PNG Power business Digicel's way on the sly, as was exposed last week in the papers. Has Mangoes ever actually left Digicel's employ? One wonders!

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