Browse >
Home /
News & Trends / America Movil to buy MiPhone for…US$70 million. And now the rumours and questions.
America Movil to buy MiPhone for…US$70 million. And now the rumours and questions.
News AnalysisJamaica- America Movil, Latin America’s cell phone goliath with 137 million customers, a Fortune Global 500 status has agreed to buy Jamaica’s smallest cell company Oceanic Digital which operates under the MiPhone brand for a reported US$70million. The deal offered by the Carlos Slim-owned company is expected to be finalised in the fourth quarter. This was reported by Telegeopgraphy.com, a 30 year old Telecom research company with offices in USA and London.This news of MiPhone’s sale broke late August in Jamaica, but no local newspapers published figures. Oceanic Digital (MiPhone) is reported to have 200,000 subscribers in Jamaica, El Salvador and Dominical Republic, 50% of that customer base being in Jamaica. The five year old company was originally Centennial Communication and the first holder of the Jamaican mobile licence but was bought out by Oceanic which gave it full control of the mobile company. Since then the company has launched push to talk, mobile tv technologies in addition to having companies like Megaphone to use their network to deliver VOIP based international calls.The Questions and RumoursThis sale of MiPhone to the billionaire’s company has raised a few questions and started a few rumours. Does America Movil really intend to become a dominant player in the hot Jamaican mobile market as it’s used to being on the countries the company operates, or is it shoring up subscriber numbers in its strong hold El Salvador and Dominican Republic in a strategic bid to hold off its most formidable competitor, Spain’s Telefonica. This move also are also rumors that Mr. Slim’s foray into the Jamaican market and shoring up the El Salvador and Dominican Republic subscribers is also a direct face off to Digicel which opened in El Salvador in April this year, a market where America Movil has a reported 1.4 million subscribers. El Salvador has a population for 7 million with a 33% mobile penetration, lots of room to grow. A often heard industry rumour is that MiPhone is planning a shake up in the Jamaican mobile market with an offer of free cell phones and drastically cut calling rates. Well, he certainly has the money, Carlos Slim is double digit billionair. But while Rumours are always delicious, let’s wait for the reality to unfold.
Share This
The richest man in the World enters the Jamaican mobile phone market - nothing to sneeze at for sure. This is my analysis based on my knowledge and your excellent post.
(1) This is a direct result of Digicel’s foray into El Salvador. Carlos Slim likes near monopolies and if you try to compete with him, he will bring it. Oceanic in El Salvador eliminates one competitor and makes it easier to have a dominant position.
(2) The best way to hurt a competitor in a new market is to attack them at home. Digicel is incredibly strong in Jamaica, but the success of Megaphone shows there are still profits to be made.
I expect MiPhone to launch a major counter-offensive against Digicel and start a price and features war that will see rates decrease, and unlike Cable and Wireless, they will have the money to support the reduced profit margins.
This is now a battle of the billionaires - Slim vs. O’Brien
And you know David, this is going to be a fun time, because at the end of the day- the consiumer wins. SO let them fight over me and spoil me with offers on top of offers.
While I will concede that Jamaica is generally a pretty price sensitive market. Jamaican consumers don’t often experience that level of customer service, meaningful cultural integration by a company.
Cable & Wireless only started to care when they felt the heat…if Carlos Slim’s MiPhone comes hard and heavy in this market…we’re gonna be Cable & Wireless who?.
So Cheers to the billionaire, to the smartest company that knows how to tap into the now and future needs of the Jamaican consumer.
[…] this is what some industry insiders are chatting about this week. MiPhone, (the mobile service provider with the smallest market share in Jamaica) which was bought for a […]