Digicel to shut down Claro network

Mobile firm summoned to appear before OUR

By Camilo Thame Business Co-ordinator thamec@jamaicaobserver.com

Friday, January 13, 2012

Digicel has been granted permission to shut down the Claro network less than four months after agreeing to keep it going under the terms of their merger.

Permission for the network to be switched off was granted by the outgoing Jamaica Labour Party Government before December 8, as the general election campaign was kicking off.

Jamaica's smallest mobile phone operator is now due to cease operation by March 1.

The Office of Utilities Regulation (OUR) has summoned Digicel to appear before it today to give full details of its intended operation of the Claro assets and business.

The watchdog was reacting to complaints from Claro subscribers that they were having difficulty accessing the network and getting credit for their phones.

Some customers also reported that they had been advised by text message that service plans are to be terminated.

"In light of the fact that the company is no longer required to operate two separate networks, the OUR wants Digicel to provide the requisite information to enable the Office to respond to the customers' complaints," the regulator said yesterday.

It also wrote to the Office of the Prime Minister to get further details on the "mechanisms governing the new arrangements".

Former Prime Minister Andrew Holness said last night that the revised deal was not announced immediately because there were details to iron out: "I only got a chance to approve it. It had to go through the phases."

The new People's National Party Government could decide to reverse the decision if it wants to, he said, adding: "I don't know if it is wise to do."

The change was allowed on condition that the rate Digicel charged LIME for completing calls to Digicel customers would fall by $3.50 per minute and that Digicel gives back some of the radio spectrum that it now holds.

It must also honour its original commitment to provide coverage to 90 per cent of the island, he said.

The August deal announced by former Prime Minister Bruce Golding called for the networks to be kept going separately until a new legal and regulatory framework could be established.

Golding promised to bring a bill to Parliament "to enable the regulator to discharge its obligations more effectively" within six weeks (by October 11), but announced his resignation before he could complete that task.

Holness said that the bill was tabled in early December.

Digicel responded to inquiries from Caribbean Business Report last night by issuing a press release announcing that it would start to shut down the network from early next week.

It invited Claro customers to move to the Digicel network, keeping their old numbers.

The company argues that having just one network will bring efficiencies and economies of scale.

Parts of the Claro network will be integrated into the Digicel network, which will result in islandwide 4G Mobile to customers.

Digicel has already announced its intention to invest a further US$30 million in the rollout of 4G Mobile based on HSPA+ technology which will offer speeds up to five times faster than legacy 3G services and will deliver 80 per cent population coverage at launch.

This service is currently being rolled out islandwide and will be available in the next few months.

Further, Digicel has also reduced its cross-network rates, saving customers who call from LIME to Digicel, or vice versa, $3.50 per minute peak hours from January 4 for prepaid customers.

"Our acquisition of Claro allows us to use its infrastructure and spectrum to deliver 4G Mobile across Jamaica," said Mark Linehan, CEO of Digicel Jamaica.

"By integrating the Claro network into the Digicel network — and migrating customers who wish to move to Digicel while allowing them to keep their number — we will be achieving the right efficiencies and economies of scale to enable us to continue investing in what is important to our customers; delivering the best value, the best service and the best network and constantly driving innovations for the good of consumers right across Jamaica," he said.

"Consumers can look forward to the unveiling of a super-fast 4G Mobile network in the coming months as we complete the integration. Please bear with us as the wait will be worth it. It's going to be great," he said.

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Digicel to shut down Claro network