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 .
America Movil, Claro's parent company, is investing in the development and delivery of broadband services.
Users of the Claro network, and now Digicel, will have access to greater geographical coverage, better quality and innovation in services, and higher speeds.
So said the director of Claro Honduras, Luis del Cid, who announced the acquisition, which was negotiated between the parties in the first quarter of 2011.
The phone company America Movil has launched operations in Costa Rica, with the opening of 40 outlets.
Claro has begun selling its products and services in Costa Rica, with an extensive network of branches in various parts of the greater metropolitan area.
With various promotions ranging from discounts on postpaid plans to packages in which the phone is free, the company expects to earn a place in the recently opened telecommunications market in Costa Rica.
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".
Claro has filed an appeal with the Costa Rican Superintendency of Telecomunitions denouncing the agreement.
The complaint filed by Claro asks the regulator to eliminate several articles of the agreement, which has already been signed, on the grounds that they contain monopolistic practices "in violation of the competitive regime."
An article in Nacion.com reports, "Regard this issue, Telefónica said that the agreement was negotiated within the appropriate legal framework, which it respected totally. He added that the terms are equal to those already signed by other companies and which have not been challenged. "
The country's competition regulator is evaluating four requests for local companies to be purchased in the communication, pensions and trade sectors.
The four requests received by El Salvador's competition regulator (SC in Spanish) are:
- América Móvil purchase of Digicel
- Protección SA is seeking to buy AFP Crecer
- Tigo wants shares in Telefónica Multiservicios, which provides residential Internet services
Only 28% of the country's municipalities have clear rules for granting permission to install radio base stations.
In a note presented to congress on March 31, the Chamber of Info-communication and Technology reported that, "to date, only 23 of the 81 municipalities and 3 district councils have approved celular telephony infrastructure regulations".
América Móvil announced the acquisition of 100% of Digicel's operations in El Salvador and Honduras.
America Movil announced that it has agreed to acquire 100% of Digicel Group Limited and its affiliates in Honduras and El Salvador.
As part of the agreement, America Movil will sell its operations in Jamaica to Digicel.
The closing of the deal is subject to obtaining appropriate regulatory and governmental approvals in Honduras, El Salvador and Jamaica. The parties expect for approvals to be ready during the second quarter of 2011.
The telecommunications company prepares stores at four local shopping centers.
Richard Taylor, Director of Claro in Costa Rica, told Elfinancierocr.com they have reserved space at Terramall (Cartago), Plaza del Sol (Curridabat), Multiplaza Escazú (San Jose) and Paseo de las Flores (Heredia).
They are still searching for space in Multiplaza del Este and have identified a spot in San Rafael de Escazú.
The Spanish company, with a $ 95 million offer, was the highest bidder entering the Costa Rican market.
With a $ 70 million minimum base for each band, Telefónica took the rights to the third block of frequencies, which are more attractive because they require less infrastructure investment.
Mexican company, América Móvil (Claro), was awarded concession number two.
Starting at 6:30 pm the financial bids submitted by Claro and Telefonica will be known.
In the presence of representatives from both companies, the Telecommunications Superintendence (Sutel) will uncover the proposals.
La Prensa Libre published on its website: "representatives of the two mobile carriers must be present in case of a possible tie in order to immediately make a counteroffer, so the frequencies can be awarded."
Telecom superintendent Sutel informed this to Claro and Movistar after reviewing their technical and financial bids.
George Miley, head of Sutel, explained that the auction of the three frequencies will be conducted 15 days ahead of schedule.
Miley told Elfinancierocr.com: “Both companies concluded the technical, financial and legal review. We have been able to push ahead the process by 5 days as there were no problems in the bids.
The company is looking to introduce its brand via offering satellite TV and later cell phone services.
Ricardo Taylor, general manager for Claro in Costa Rica, told La Nación that the company had already asked the government for a frequency through which to transmit the satellite signal it uses to provide customers with its service.
"América Móvil wants to begin to position its Claro brand, present in 18 North and South American countries, in order to sell products such as cell phones, internet and television, often as part of a single package," the director was reported as saying in Sdpnoticias.com.