AM, Digicel agree asset swap in Jamaica and Honduras; El Salvador deal rumbles on

2 Dec 2011

Mexico-based LatAm mobile powerhouse America Movil (AM) has reportedly agreed a deal with rival regional operator Digicel Group concerning the transfer of assets in Honduras and Jamaica. In separate press releases, the pair confirmed that AM has completed a deal to acquire Digicel’s Honduran mobile unit and at the same time agreed to sell its Jamaican subsidiary Claro to the Irish-owned company. BNamericas quotes a Digicel spokesperson as saying the company has declined to comment on the deal at this time.

In March this year AM announced that it had entered into an agreement with Digicel Group to acquire 100% of Digicel’s operations in Honduras and El Salvador. As part of the transaction, the Mexican firm said it was selling Jamaican subsidiary Claro to Digicel, in a deal that is thought to also include an undisclosed sum of money. At the time AM confirmed that the completion of the transaction was subject to governmental and regulatory approvals in each country involved, among other conditions, and that it expected to finalise the deals during the second quarter of 2011. However, it was August before the government of Jamaica approved the deal, triggering a debate on whether Digicel’s takeover would adversely impact on the local market. The Jamaican authorities subsequently promised to fast track regulatory changes to keep Digicel in check and protect other players – such as ailing incumbent LIME – although such legislation has still not been introduced.

Meanwhile, AM is still discussing alternative options for its planned acquisition of Digicel El Salvador by the Mexican mobile giant’s local unit Claro, following a decision by El Salvador’s competition regulator, Superintendencia de Competencia (SC), to impose a number of conditions on the deal. As reported by CommsUpdate, the antitrust agency approved Claro’s acquisition of Digicel in September 2011 on the condition that the former return 20MHz of spectrum, which would be reserved for new players to help level the playing field. SC said that Claro would also have to meet certain conditions after the proposed purchase of Digicel had taken place, including maintaining the marketing strategies developed by the cellco for five years. The agency rejected a subsequent appeal lodged by AM against these conditions, ruling that the measures were necessary to ensure effective competition in the mobile market.

El Salvador, Honduras, Jamaica, America Movil (AM), America Movil Jamaica (Claro), Claro Honduras, CTE Telecom Personal (Claro), Digicel (El Salvador), Digicel Group