What’s good and bad about the Digicel / Claro Jamaican buy out deal

What’s great about this deal

1. Digicel gets out of America Movil’s market, therefore no longer pissing off the richest man in the world. Carlos Slim Helu is worth US$74billion, Dennis O’Brien is worth 1/10 of that.

2. America Movil gets out of the Jamaican market and stop pissing off Dennis O’brien and ends the distracting tactics that was meant to confuse the Jamaican consumer with branding similar to Digicel and painting Digicel’s as overpriced and misleading. Additionally, the poaching of talent and also accepting of employees made redundant by Digicel will no longer matter.

 

3. Will CLARO prices increase to match that of Digicel’s? Pricing was a major pull factor that Claro used to move subscribers from LIME and Digicel or at the very least wooed them to be carrying another cell phone. So with Digicel owning the Claro Business in Jamaica now, will that mean CLARO subscribers can expect increase in call rates and data plans?

4. Now many Jamaican consumers can get better deals for the iPhone and iPad 2 here. This also may mean Jamaican Blackberry addicts may become less dominant. I know I’d be one of them, switching to the iPhone and happy to get the wifi and 3G iPad2 and unapologetically so.

5. Claro will no longer be seen as the stepchild in the local mobile market. When America Movil bought the then MipHone for US$70 million, the MiPhone culture remained despite the pretty red branding. MiPhone was perceived as not an important entity with a God awful customer service culture. Digicel getting Claro’s  Jamaican business,  means their customer service culture will be transplanted there. Whew!

6. iPad in Education. With Digicel having access to the exclusivity that CLARO has for the iPhone and possibly iPad 3G, if they choose to, Digicel can use the iPad2 to really influence some reinvention in education with that device as have been happening in other parts of the world. And not make it into some pricey, luxury device for the few.

What’s NOT so great  about this deal? Which depends on where you sit.

1. Swapping one monopoly for another? This deal gives Digicel too much power in the Jamaican market. While they have been dominant in the  Jamaican market pretty much since it launched, this deal makes Digicel the biggest network here.

LIME formerly Cable & Wireless, held a monopoly here for 50 years, so Digicel was like a buffet in front of the starving Jamaican consumer when the market opened. Stil, is this healthy for the Jamaican market, to swap one monopoly for another, simply because the new one is more benevolent?

While everyone loves a winner, it’s not good market conditions to have, not even for the consumer and not even if it’s Digicel.  The market regulators- Office of Utilities Regulations (OUR) and The Spectrum Authority ( when it decides to grow bigger balls, get stronger teeth and people who really understand the damn market) will have to monitor like a hawk.

2. LIME is in trouble BIG TIME. They have been bleeding ink over the years despite rebranding, repositioning efforts and unleashing innovative products such as Mobile TV. Can they turn thins around to become a formidable competitor in the marketplace.

3. It doesn’t leave much of the market for a 3rd competitor  ?…unless the technology shifts the market so much it destabilises Digicel and LIME which at the pace of innovation these days is quite possible.

4. What about FLOW? With the Internet becoming more mobile and the devices like iPad2 coming cheaper as a computing device giving greater access to consumers, where does this leave FLOW in the Internet Market?

Related Posts
Digicel and Claro swap business assets and calls a Truce in Jamaica and LatAm markets
MIPHONE vs DIGICEL vs CABLE & WIRELESS- Who’ll win the cellphone war?
Digicel’s Blackberry business up 135%, revenues up to US$2.2 billion
America Movil to buy MiPhone for…US$70 million. And now the rumours and questions.