Digicel, Telefonica Moviles El Salvador, CTE, CTE Telecom Personal and Telemóvil El Salvador filed appeals against the $2.2 million fine imposed on them for abuse of their dominant positions.
From a statement issued by the Superintendency of Competition:
The five telephone operators punished for abusing their dominant position submitted an appeal to the Board of Directors of the Superintendency of Competition on 4 November.
Digicel, Telefonica Moviles El Salvador, CTE, CTE Telecom Personal and Telemóvil El Salvador were fined $2.2 million for abusing their dominant position to impede the entry of new competitors.
From a statement issued by the Superintendency of Telecommunications:
SC sanctions telecoms companies for abusing dominant position:
The Board of Directors of the Superintendency of Competition resolved to sanction five telephony operators proven to have each committed abuse of their dominant position typified in Article 30, letter a) of the Competition Act. The investigation, which was based on a complaint filed on October 24, 2013 by Platinum Enterprises, SA de CV, concluded that each of the defendants abused their dominant position by hindering the entry of new competitors or expansion of existing ones in the market for intermediate services for incoming international traffic for call termination on their own networks.
Claro, Digicel, Telefónica and Tigo have grouped in the Salvadoran Chamber of Telecommunications.
An article on Elfinancierocr.com reports that "... The four major mobile and fixed phone companies in El Salvador, Claro, Digicel, Telefónica and Tigo have announced the establishment of the Salvadoran Chamber of Telecommunications, a non-profit organization that will help ensure sectorial expansion, deployment, enhancement and development of networks and the telecommunications industry in the country, according to a press release. "
Operators are opposed to the proposal to tax phone bills and purchases of technological equipment, while the government has shown itself unwilling to cooperate by reducing tariffs.
While the government insists that telecommunications companies must lower telephone rates in order to minimize the impact of a future tax of 10% for public security, telecoms companies have defended themselves arguing that "...
The launch of Digicel service is part of an investment plan in which $45 million has been invested to modernize the technological infrastructure.
In the first year of execution of the the 2013-2015 Master Investment Plan $30 million will be invested and the remaining $15 million will be invested over the next two years.
José Antonio Rodríguez, CEO of Digicel El Salvador, said "we are taking a leap in technology, going from 2G to HSDPA + technology, known as 4G, which is being used in developed countries."
The Superintendency of Competition believes that auctioning 40 MHz creates disadvantages for new entrants who want to enter the mobile phone market.
From a press release by the Superintendence of Competition in El Salvador:
The Board of Directors of the Superintendence of Competition has recommended to the General Superintendency of Electricity and Telecommunications (SIGET) that the auction of 40 MHz of radio spectrum recently announced should include the participation "only [of] new entrants who are not associated with any mobile operator presently in market. This is to promote competition between agents being equal and ensure the chances of increasing the number of competitors in the market, generating dynamism and competition. Failing the above, the auction will be suspended. "
The President of Grupo Digicel has announced investments over the next eighteen months of more than $40 million.
In his short visit to El Salvador, Denis O'Brien was interviewed about the expansion, with topics covered such as the Salvadoran authorities refusal to authorize the sale of Digicel to Claro and the company’s future investments in the country.
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.
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 .
For the second time the Superintendence of Competition of El Salvador has refused permission for economic concentration between both companies.
From a statement from the Superintendency of Competition (SC):
SC does not authorize the purchase of DIGICEL
After carrying out technical legal and economic analysis, the Board of Directors (CD in Spanish) of the Superintendence for Competition (SC) decided to reject application of economic concentration by CLARO from the purchase of DIGICEL, considering that the proposed economic concentration has high probability of having an adverse effect on the dynamics of competition and consumer welfare in the markets for fixed and mobile telephony.
From the month of September recipients of remittances in Guatemala, Honduras and El Salvador will be able to receive them on their mobile phones.
By using a its cellular network platform, the Guatemalan company Tigo Money, a subsidiary of Tigo, will offer international services for money receipts.
Since early 2011, Tigo Money has been in the remittance business nationally in Guatemala.
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
The Board (CD) of the Superintendencia de Competencia (SC), has received a new application for a new merger request made by the company America Movil, which owns the CLARO brand, for the purchase all of Digicel’s shares.
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.
According to a review by the SC, the information and documentation submitted does not comply with some of the requirements of Article 35 of the Competition Act and 25 of its regulations and is not sufficient for analysis of admissibility, for which it has granted a period of thirty days for the applicant to remedy the situation.
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. "
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.
A press release by the Superintendency for Competition (SC) says:
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".