Digicel is moving to shrink its Latin American footprint further, agreeing to sell its El Salvador operation as the telecoms group concentrates more of its capital and investment on the Caribbean.

The company announced Monday that it had signed a definitive agreement to sell the business to General International Telecom El Salvador SA de CV, or GITES, with the transaction expected to close in the first half of 2027, subject to regulatory approval. The sale price was not disclosed.

The deal marks another step in Digicel’s long-running effort to simplify its portfolio while improving its financial position, but this time the company is tying the exit directly to a renewed focus on the Caribbean.

“Over the past year, we have been executing a clear strategy to build a stronger Digicel and position the company for long-term growth,” Group CEO Marcelo Cataldo said.

“This transaction is another step in that strategy, allowing us to sharpen our focus on the Caribbean and concentrate our resources and investment behind markets where we have strong positions and see significant opportunities for growth.”

Digicel said it intends to keep investing in subsea connectivity, fibre expansion and network capacity across the Caribbean as part of that push.

The El Salvador exit comes after a period in which Digicel has also been reducing pressure on its balance sheet.

In April, the company repriced an approximately US$648-million term loan due in 2032, lowering the interest rate by 0.75 percentage points. That followed a US$100-million voluntary debt prepayment and formed part of what Digicel described as a broader deleveraging effort.

Last year the group also completed a refinancing that included an upsized US$1.99-billion senior secured notes offering due 2032, alongside plans for new credit facilities.

The decision to sell El Salvador also continues a broader contraction of Digicel’s once much wider international footprint.

In 2022, the company completed the sale of its Pacific operations to Telstra, exiting six markets — Papua New Guinea, Fiji, Samoa, Tonga, Vanuatu, and Nauru.

That business had about 2.5 million subscribers and generated US$431 million in revenue and US$233 million in EBITDA in the year ended March 2021 before the sale.

Digicel still operates across 25 markets in the Caribbean and Latin America and says it serves close to nine million customers through mobile, broadband and business services.

El Salvador has been one of the group’s few remaining Central American operations.

The buyer, GITES, is already a significant player in that market.

The company acquired 99.3 per cent of Telefónica Móviles El Salvador from Telefónica Centroamérica Inversiones in January 2022 for US$139 million, taking control of the Movistar operation.

At the time, El Salvador’s competition authority said the acquisition did not require its approval because GITES had no active operations in the country before the transaction and was effectively replacing Telefónica rather than reducing the number of competitors.

That position will be different this time, however, because GITES already operates in El Salvador through the former Movistar business. Digicel itself has said the proposed sale remains subject to regulatory authorisations.

The deal could therefore further consolidate the Salvadoran telecoms market if approved.