Digicel and Claro swap business assets and calls a Truce in Jamaica and LatAm markets

Digicel today said that it has signed an agreement with América Móvil to acquire its Claro business in Jamaica, and to sell to América Móvil its businesses in El Salvador and Honduras. So in other words, the swords are now down and they are both settling their issue-which was Digicel entering America Movil’s Central/Latin American markets which pissed off its owner Carlos Slim. According to the Jamaica Gleaner report, “The financial terms of the transaction are not being disclosed however there will be a net cash payment to Digicel.”

 

Outdoor Advertising cancelled. Claro Cables being laid.

This comes also in the confirmation that both Digicel and Claro have cancelled major outdoor advertising contracts with two big outdoor ad companies in Jamaica. Claro is also reportedly responsible for the road works and laying of cable in the Corporate Area of Mannings Hill, Constant Spring and Waterloo Roads in Kingston.

What the deal will mean?

The deal will see Digicel extending its dominance of the local mobile telecommunications sector, where it already claims 2.1 million subscribers among the Jamaican population of 2.8 million. This means it’s back to being a two horse race with LIME in the Jamaican telecom market,  with LIME being on shakey ground lately and losing billions over the last 2 years especially since rebranding and repositioning in the market. Is this good for the Jamaican market?

America Móvil, which is owned by the richest man on the planet- Carlos Slim Helo,  will however remain the larger player on the global market. Móvil reported adding 8.2 million mobile subscribers in the last quarter of 2010, bringing its total to 225 million worldwide. Globally Digicel which is owned by Dennis O’brien also on the Forbes Billionaire list, has 11.5 million mobile subscribers, according to the Jamaica Observer newpaper report.

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