Start Date

14-12-2012 12:00 AM

Description

This case examines the competitive impact on LIME Jamaica, a telecommunication provider, of a possible swap deal between the market leader, Digicel and its closest rival Claro. Digicel Jamaica signed an agreement in March 2011 with rival Claro (American Movil) to acquire Claro Jamaica. In return, Digicel would sell its businesses in El Salvador and Honduras to Claro. The deal threatens to create a new monopoly in the Jamaican market. LIME, the former monopoly, is now threatened by the deal and is challenged to develop a strategy to prevent it. The case highlights several issues including the powers of the regulatory bodies in dealing mergers and acquisition in small markets, and the application of the US Horizontal Merger Guidelines to assess the competitive effects. Furthermore, there are issues of international competition, the setting of technology standards and reopening the debate on whether the telecommunications industry is a natural monopoly.

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Dec 14th, 12:00 AM

Will LIME Survive the Claro—Digicel Deal?

This case examines the competitive impact on LIME Jamaica, a telecommunication provider, of a possible swap deal between the market leader, Digicel and its closest rival Claro. Digicel Jamaica signed an agreement in March 2011 with rival Claro (American Movil) to acquire Claro Jamaica. In return, Digicel would sell its businesses in El Salvador and Honduras to Claro. The deal threatens to create a new monopoly in the Jamaican market. LIME, the former monopoly, is now threatened by the deal and is challenged to develop a strategy to prevent it. The case highlights several issues including the powers of the regulatory bodies in dealing mergers and acquisition in small markets, and the application of the US Horizontal Merger Guidelines to assess the competitive effects. Furthermore, there are issues of international competition, the setting of technology standards and reopening the debate on whether the telecommunications industry is a natural monopoly.