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America Movil – Digicel Jamaica swap is Final

Fans of all things Telecoms, the deal of the Decade is now final and official. The ink has dried on the swap orchestrated by Digicel Group due to its declining APRU (Average Revenue per User) for Voice Calling has now been finalized, with word coming of same on Friday December 2nd 2011 in the Jamaica Observer.

Digicel Group has swapped Digicel Honduras and Digicel El Salvador in exchange for America Movil’s CLARO Jamaica Telecom operations. However, fortunately you will still be enjoying the benefits of CLARO’s Free Calling features …….until Digicel, the new owners, decides to do away with them.

This based on the quote from Digicel Group CEO Colm Delves, quote: “We are pleased to have completed the acquisition of Claro Jamaica. Our immediate focus now will be to get a fuller understanding of the business and in this regard we have deployed several teams who are collating appropriate information. We will keep the Claro customer base, employees, dealers and suppliers advised of our plans over the course of the next few weeks.”

America Movil’s words after filing with the SEC (Security Exchange Commission) in the US are equally devoice of specifics, quote: “In March 2011, we entered into an agreement with Digicel Group Limited to acquire 100% of Digicel’s operations in Honduras and El Salvador selling to them in the process our operation in Jamaica. The completion of the transaction is subject to governmental and regulatory approvals. The competition authority in El Salvador has imposed conditions on the transaction, and we are evaluating our options and the timing of any possible closing.”

Details of any financial transactions, if any are sparse, as obviously the two operations owned by Digicel in the respective Latin American countries are worth more than CLARO Jamaica, whose value I estimate to be about US$300 million, including their soon-to-be built LTE (Long Term Evolution) Network with its MSC based in Duncans, Trelawny built under contract by Ericsson.

Possibly America Movils Chairman and billionaire Carlos Slim paid up the extra difference in value between the companies involved in the swap with stock in America Movil. Or maybe it was the alleged US$350 million in cash I keep hearing about.

Whatever the case, the deal is now final despite protestations from Opposition Senator on Telecommunications and ICT, Senator Phillip Paulwell. With the deal comes a new Telecoms Regulator and a newly revamped Telecommunications Act, slated to be revealed in 2012AD, an announcement that caught all Telecoms Providers off guard as noted in my article New Telecom Act Coming for Jamaica – Providers surprised with their Own Regulator.

Lower Cross Network Calling Rates, MNP (Mobile Number Portability) and even Free Calling between Networks may be on the cards, as the swap allowed Government Telecom Regulators in the respective countries to put pressure on Digicel and America Movil to make concessions that would prevent them from owning too much spectrum and thus becoming monopolies.

The Jamaican Police, both the ISCF and JCF stand to benefit, as the improved Telecommunications Act may have provisions that will make MRSI (Mandatory Registration of Subscriber Information) mandatory.

This service, which is now signed into law can be used by the CCN (Constabulary Communication Network) to more to more easily track criminals and investigate crime by using Geo-Location information that Telecom Provider keep on the whereabouts of all cell phones over a six (6) month period. It can also be used for the provisioning of Enhanced 911 services, about which I will be doing an article later on Geeezam.com, and which may actually be in the process of being implemented.

LIME has very little to fear, as the proviso that the Government of Jamaica has laid down for Digicel is very heavy indeed and makes for great reading in my article New Telecom Act Coming for Jamaica – Providers surprised with their Own Regulator.

Digicel has to continue the build-out of CLARO’s Network to achieve 90% islandwide coverage in both Voice and Data Networks will keep them busy for awhile and unable to effectively compete against LIME.

Plus, Digicel has other worries in the form of their build-out of their Caribbean wide HSDPA+ Release 7 Network as noted in my article New Telecom Act Coming for Jamaica – Providers surprised with their Own Regulator.

My article LIME, Digicel and FLOW – Leading the Global 4G Adoption Curve indicates that Digicel is to compete with LIME’s build-out of the same type of LTE-capable Network and also in the process make the Caribbean a leader in Wireless Broadband penetration.

Geezam will be following this development and will report on it as soon as more news becomes available on this our Telecommunications Tsunami

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Lindsworth is a Radio Frequency and Generator Maintenance Technician who has a knack for writing about his work, which is in the Telecoms Engineering Field. An inspired writer on themes as diverse as Autonomous Ants simulations, Power from Lightning and the current Tablet Wars.

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2 Responses to "America Movil – Digicel Jamaica swap is Final"

  1. Jose Otero says:

    Information is inaccurate. The transaction in El Salvador is not completed due to regulatory conditions not accepted by America Movil.

    • Lindsworth says:

      Actually if is. The article “Digicel acquires América Movil’s operations in Jamaica and sells its operations in Honduras”, published Friday, December 02, 2011, The Jamaica Observer indicates a complete transaction.

      The El Ealvador issue relates to 29MHz of spectrum which America Movil refuses to give up to to the Salvadorean government in relations to guarantees against anti-competitive behavior on the part of America Movil by ensuring competition can be allowed to thrive in their Telecoms space.

      Aside from this, this article above, which is based on months of tracking this issue and my personal input on the actual swap itself vi it being my original suggestion as well as the fact that it is based on a Jamaica Observer report is accurate. Perhaps you wish to pursue this matter with the Jamaica Observer as well??

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