El Salvador: Claro Cancels Purchase of Digicel

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.

Monday, October 15, 2012

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

The Superintendency of Competition (SC) of El Salvador conditioned the operation to Claro waiving the right to exploit 20 MHz of the total spectrum it owns in El Salvador. "The reason for this precondition to authorize the merger of operations of both companies is to retain the current level of competition in the cell phone industry to protect consumers' pockets", explained at the time the head of the SC, Francisco Diaz Rodriguez .

On November 30, 2011 America Movil announced that as part of the agreement with Digicel Group Limited and its affiliates ("Digicel"), during the first quarter of 2011, it had taken on this date 100% of Digicel's operations in Honduras and firmed up the sale of Digicel’s operations in Jamaica, and in April 2012 the SC received a new request for authorization of economic concentration by América Móvil, which owns the Claro brand, for the purchase of all the shares of Digicel.

Last September, after conducting technical legal and economic investigations , "the Board of Directors (BD) of the Competition Superintendence (SC) decided to reject the application for economic concentration by CLARO to purchase DIGICEL, considering that the operation for proposed economic concentration has a high probability of having an adverse effect on the dynamics of competition and consumer welfare in the markets for fixed and mobile telephony. "

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Claro Submits New Application for Purchase of Digicel

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Claro has submitted a new request to the Superintendency of Competition (SC) in El Salvador for authorization to buy Digicel.

The SC has received a new request for authorization of economic concentration on the part of America Movil, owner of the Claro brand, to purchase all the shares belonging to Digicel.

America Movil Appeal Dismissed

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The Mexican company will not be able to merge with Digicel unless it agrees to a condition to renouncen the use of 20 MHz of airwaves.

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. "

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.