Gov't still deliberating planned Digicel-Claro merger

Jamaicans should know in a matter of weeks if the Government is going to approve the planned merger of telecommunications companies Digicel and Claro.

Some four months ago, Digicel announced a planned deal with America Movil to acquire its Claro business in Jamaica, and to sell to America Movil its businesses in El Salvador and Honduras.

But the deal, which has sparked some controversy locally, requires the blessing of the Government of Jamaica and Minister with Responsibility for Technology Daryl Vaz says a final decision is still some way off.

"That has been something that has been a work in progress. It has had a number of consultations with agencies of government in the information and telecommunications department, it has also had the input of the Attorney General's Department," Vaz told journalists at yesterday's weekly post-Cabinet briefing.

He said the regulating agencies have requested additional information from Digicel and Claro and some of this information has not been presented.

Major consideration

"I would be comfortable to say it is at the stage where we are expecting the final comments from the agencies - the Spectrum Management Authority, the Office of Utilities Regulations and the Fair Trading Commission - in another week or two," Vaz said.

"It is not something that is open and closed. It has major considerations in terms of competitiveness and also consumer benefits and, therefore, it is not something that can be rushed or will be rushed, as it is something that has serious implications if not properly handled," added Vaz.

It is estimated that the combined market share of Digicel and Claro in Jamaica comes to 80 per cent, leaving the next major player, LIME, with the remaining 20 per cent.

This has sparked fears that the merger could create a virtual monopoly and push Jamaicans back into a position in which it was before the introduction of Digicel when LIME, then Cable and Wireless, dominated the market.

LIME has also cautioned the Government to carefully consider the significance of the merger to the Jamaican telecommunications industry before approval is given.