Nearshore Americas
Claro Digicel

Digicel Leaves Panama After Government Clears C&W-Claro Merger

The Government of Panama has cleared Liberty Latin America’s proposal to merge Cable & Wireless with Claro, a Panamanian unit of Mexican telecom giant America Movil, despite vocal opposition from rival carrier Digicel.

Digicel has initiated a process to liquidate its assets in the Central American country, leaving Tigo alone on the battlefield to compete with Liberty.

“For us, investing in this market isn’t sustainable anymore,” stated the company’s president, Denis O’ Brien, in a press release.

Digicel repeatedly urged the country’s telecom regulator not to approve the merger, saying the it would kill competition in the telecom market.

The merger will hand more than 56% of the country’s market to Liberty Latin America, the telecom giant that owns Cable and Wireless and has extensive operations in the Caribbean.

In an earnings call with investors in May, Liberty’s CEO Balan Nair said the merger had “moved a four-player market to a three-player market.”

Analysts fear that the departure of Digicel will turn Liberty into a telecom monopoly in Panama.

The clearance comes almost eight months after Liberty wrapped up the agreement with America Movil to purchase Claro Panama for US$200 million.

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Reports say the Panamanian Government will have a 49% share in the merged entity.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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