Digicel to shut down Claro network – Let the backlash begin ?

Digicel swallows Claro

The Jamaica Observer article first paragraph says “Digicel has been granted permission to shut down the Claro network less than four months after agreeing to keep it going under the terms of their merger. Permission for the network to be switched off was granted by the outgoing Jamaica Labour Party Government before December 8, as the general election campaign was kicking off. ” You know what this looks like right?

And as a result…the backlash has begun. The debate by consumers have begun to rise on Twitter, Facebook and BBM. In short, no matter how much love most people have for Digicel as the number one mobile service provider in Jamaica….they know when even their coveted winner, has been given what many see as a free pass.

The fact is, The former JLP Government has in effect swapped one monopoly for another…no matter how benevolent the new one is. Or is there something else coming that we know nothing about as yet?

The fact is, that Digicel is super powerful in this country…they represent lots of Foreign Direct Investment, thousands of jobs and let’s not forget they have been positioned to lead the revitalisation of Downtown, Kingston with their tall, beautiful, water front HQ.  Who wants to say no to that?…certainly not Philip Paulwell, the new Minister of Mining, Energy and ICT  “Paulwell endorses the new Digicel/Claro merger condition”.  So Minister Paulwell, we are anxious to hear more about your “immediately reviewing proposed legislation aimed at encouraging competition. ”

How badly could this hurt Digicel in the eyes of its prized consumers ? Clearly it’s a risk they were willing to take. I want to see how they do damage control and image turn around on this. Will they even have to, as do Jamaican consumers care about anything other than cheap calls, free texts and lots of chances to win kind of contests?

I caught some early morning comments and added them below. Read them and leave your opinion too.

Some Comments gleaned from Facebook and Twitter
– “This whole thing is _very_ bad. I have no issue with the merger in principle. Those things can and should happen in a free market, and probably always likely at some point given Claro’s operations. My issue is with the stipulations put in place by Bruce, that were removed by Mr Holness. Such as the returning of the spectrum, the operation of the network, some of the operator expectations of Claro included in their original mobile operator license.

Even how they are handling the “merger”. Number portability was also on the table as a mooted conditionality. In effect Digicel are now getting 500,000 Claro customers for free. You don’t see anything wrong with that? Where does that leave LIME?” – M, McNaughton

– “This was always on the card as Digicel was never interesting in keeping the claro network so once again the Jamaican consumers are caught in what is a monopoly situation“- P, Kavanaugh

– “How about don’t switch and don’t pay any outstanding bills? Can’t believe Andrew Holness, former Prime Minister made that big switch and never told the country. New and different my foot….no transparency.” – D, Mullings

=[Wonder how much andrew (holness) former Prime Minister got paid for this” – M. Babuté

– RT @BigBlackBarry: Digicel is a gangster telcom. They know how to work in countries like Jamaica and Haiti.

– Sad day for Jamaica and competition in the telecoms market..the more we have it becomes better for the customer as competition gets greater. I am never a fan of Digicel Service so i am even more so hurt..Claro did not fail me (tears) – S, Scott


Related Posts
Digicel and Claro swap business assets and calls a Truce in Jamaica and LatAm markets
What’s good and bad about the Digicel / Claro Jamaican buy out deal

  • Totally disagree with this…”It’s virtually impossible to have any form of competition in the Jamaican context as far as telecom goes.”….what’s your rationale for stating that? I believe the consumer once they realise their power will be more demanding even of Digicel which has over the last year especially displayed some LIME monopoly tendencies, could be due to their “bigness” and what comes with that. I want to hear the debate on number portablity and the right of the consumer to choose not to be given less choice.

  • ping

    what i want to know what happen to the ppl who live in areas where digicel does not work nor lime ,what happen to all those ppl will digicel do something for them…kmt this is madness digicel fi go weh ,claro should ave been the who is still here,they are the ones that cover most of the island

  • Kamron

    It’s virtually impossible to have any form of competition in the Jamaican context as far as telecom goes. Lime (Slime) had it’s time when it was Cable and Wireless and they made a wonderful mess of a glorious opportunity. Serves them right. I hope they too get swallowed up by the Jolly Red Giant and I hope for Jamaica’s sake that giant remains as jolly and as red as it has always been and doesn’t go down the same road Slime went and is hopelessly trying to claw its way back form (can someone say “too little too late” the horse has already bolted through the gate).

    I’m (well was) a Claro customer and generally, I couldn’t care less. I’m a bit peeved however that I lost my five free numbers (that bites, they were all I ever called or texted) but we are a free market and these things happen in a free market. So, let’s just suck it up and quit complaining. This was bound to happen anyway, a way for good old “Digi” to get back its “prodigal” customers and their loyalty. Maas Carlos Slim himself is no doubt smiling at the fact that he got not one but two networks that no doubt took a few of his customers and/or potential customers, now they have been handed to him in a seeming sweetheart deal that turns out to be mutually beneficial to both parties. So, let’s just accept it or boycott it until we can change it.

  • Jme30

    When all is said and done. It’s all about the dollar. In the time of an election funding is important and now the current gov will never speak ill of their baby.

  • Fact is…no one wants to see Digicel be inefficient and take on a situation that would be a profit sinker….but this merger which is great for free markets makes the telecoms space a two horse race…no fault of anyone but those two players. Digicel’s timing was perfection…they were the mobile feast in front of 50 year old starved individuals. LIME even reinvented were caught napping and has been trying to regain market share ever since. The consumers voted with their wallets and their loyalty. Fantastic, free market at work….but let’s be real…you can see how Digicel may be perceived as being the new benevolent monopoly in terms of the power they hold in the marketplace and with zero support for number portability.

    I agree with you: “Paulwell must now follow through and enact the legislation that should level the playing field for LIME and others, and also protect consumer interests. Hopefully number portability will be in that ‘emergency legislation.’ Yes, no long talking…just action to make things happen.

  • I think most people will agree that operating two separate networks would have been a profit sinker for Digicel! Good for Digicel. I think most people would agree that the manner in which the decision was made…perceived as shrouded in secrecy…is not good for Digicel’s image and can shake people’s trust of the much loved company. Additionally, while a company must always do what is best for it’s bottomline…it also must take care of its customers…something Digicel has been amazing at for years. Change and transition like these are never easy…which is why they should be done with transparency and clear communication with the customer at the center of all decisions. All I’m talking about here is perception, perception, perception by the consumers. Nothing more. Nothing less.

    The remaining questions are: 1. Will Digicel support number portability in essence supporting the right for customers to choose?
    2. What are these bits of legislation that Min Paulwell said he is reviewing so as to have great competition in this space?

  • Just Saying

    “Digicel says its deal with Claro is in the interest of consumers and insisted that Holness’ decision was not only legally sound, but is supported by the newly appointed Minister of Mining, Energy and ICT Philip Paulwell.”

    “The company says when it received an initial approval from the Bruce Golding administration, it followed the required process to make it clear that the stipulation to operate two networks concurrently was uneconomical and unworkable. Digicel says it also consulted with Paulwell, who was the Opposition spokesman at the time, and he agreed that the requirement was impractical.”

    Source: http://jamaica-gleaner.com/latest/article.php?id=34572

  • Just Saying

    “The fact is, The former JLP Government has in effect swapped one monopoly for another..”
    What monopoly did they swap for another? What monopoly had existed that the JLP-led government swapped for another? Let us be real. Digicel could not have operated two separate networks. Andrew Holness did the right thing, in consultation with the opposition that now forms the government. Paulwell must now follow through and enact the legislation that should level the playing field for LIME and others, and also protect consumer interests. Hopefully number portability will be in that ’emergency legislation.’

  • Well let’s see Jean. BUt you would have to agree that the way this was done…was pretty distasteful to the consumer, the electorate. It smells of back door dealing many have said. No one questions Digicel and it’s products and service…..BUT…this is not an issue that should be overlooked. What of the number portability issue?

  • Exactly regarding the number portability issue. So let’s see if OUR etc has any teeth.

  • Jean

    Digicel has never rested on their laurels, even after they quickly surpassed C & W for affordability and service – in fact, they were the monopoly breaker. They will continue to serve us well.

  • JA2BK

    Very odd back door dealing. This merger was an opportunity to bring things like number portability which would have even made this development kind of moot. This would have been an opportunity to get pricing parity. Why should anyone have to pay dependent on which carrier their friend is on? Divestiture of spectrum is apparently a stipulation, but for what if there is not a new entrant to the market? They should have courted a new entrant in the meantime. Hopefully they are doing so actually. Wonder if Flow wants in on mobile? This would have been in the interest of jobs if not competition. How can you agree to loss of jobs when they are already scarce? How can you agree to vendors now not having this sales opportunity?

    I guess the one good news is HSPA+ will be coming to Digicel. 3G and 3.5G/3G+ (forget the 4G rubbish as they don’t call it that in their other markets). So that kind of levels the field with LIME if you want 3G service.

  • very interesting developments indeed