Regarding the ruling by Superintendencia de Competencia (SC), Daniel Choto writes in Elsalvador.com, "The reason for this precondition to allowing the merger of the operations of both companies is to maintain the current level of competition in the field of mobile phone companies in order to protect consumers' pockets, said the head of the SC, Francisco Diaz Rodriguez. "

In June the Mexican company America Movil requested permission from El Salvador's Superintendency of Competition (SC) of to acquire 100% of Digicel’s shares,.

The SC made the merger conditional on America Movil renouncing commercial use of its 20 MHz of airwaves, the company then challenged the resolution.

"He stressed that the Superintendent conducted technical, economic and financial analysis on the likely scenario if the merger of both companies was carried out.’This (likely) scenario could result in a significant reduction in competition in the market and that could lead to collusion in the market and therefore to restricted conditions for competition with the damage typically falling on the consumer; he said."

Source: elsalvador.com

More on this topic

El Salvador: Claro Cancels Purchase of Digicel

October 2012

After the competition regulator imposed the release of part of the spectrum leased by Claro as a condition to the merger between the two companies, America Movil has announced its withdrawal from the move.

In March last year, America Movil announced an agreement to acquire a 100% stake of Digicel El Salvador, for an undisclosed amount.

Claro - Digicel Merger Request Received

July 2012

The Competition Superintendence of El Salvador has acknowledged receipt of a new request for the acquisition of 100% of Digicel’s shares by Claro in March 2012.

From a communciation from the Superintendence of Competition (SC):

SC Receives new application from CLARO - DIGICEL

El Salvador: Claro Requests Purchase of Digicel Be Unconditional

September 2011

Claro has asked the Superintendency to revoke its prior decision and "to consent without conditions to its consolidation operations."

The condition that Claro opposes, is the renouncement before the Superintendency of Electricity and Telecommunications (SIGET), of its right to operate 20 MHz of the total Salvadoran radio electric spectrum it has.

Digicel and Claro Merger Would Release Frequencies

September 2011

The government of El Salvador requires the renunciation of the spectrums assigned to both companies individually, to avoid limiting competition.

The resolution by the Superintendency of Competition requires America Movil (Claro)"... give up some of the radio spectrum it has been assigned. This spectrum will be used by new competitors creating more competition and therefore consumer benefits".