Digicel acquires Claro Jamaica

Digicel acquires Claro Jamaica

BY AL EDWARDS edwardsa@jamaicaobserver.com

Saturday, March 12, 2011

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MOBILE service provider Digicel yesterday announced that it had signed an agreement with America Movil to acquire its Claro business in Jamaica.

The financial terms of the transaction have not been disclosed at this time but the Observer was informed that a net cash payment will be made to Digicel. "The transaction is subject to regulatory approvals and is expected to close in the second calender quarter," Digicel said in a release yesterday.

The deal will see Digicel selling its businesses in El Salvador and Honduras to America Movil which in effect means that Digicel will continue to maintain dominance in the Caribbean without having to contend with Claro, while America Movil, with 190 million subscribers worldwide, will continue to stamp its presence in Latin America.

America Movil, operating as Claro in Jamaica, acquired Miphone's Jamaican licence in 2008. In 2009, it claimed that it had overtaken Cable & Wireless in Jamaica, which now operates under the name LIME, to become the number two player in the market.

LIME, however, rubbished the claim.

The Mexico-based Claro did offer the cheapest rates of all three players in the Jamaican market and had upped the ante with its marketing campaign. Last year, Claro Jamaica declared that it had grown its subscriber base by 150,000.

Digicel began its operations in 2001 and quickly overtook the incumbent monopoly Cable & Wireless. Today, it says it has 2.1 million subscribers in Jamaica, making it the dominant player in this market. Digicel, which is in 32 markets, says it now has 11.5 million subscribers.

"It's a good deal for both us and for America Movil," said a Digicel spokesman last night. "It demonstrates our further investment in and commitment to Jamaica and will enable us to further enhance our offerings to our enlarged customer base following the acquisition of Claro. Market consolidation is the natural evolution when a market is fully penetrated, as is Jamaica.'

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