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Digicel to shut down Claro Jamaica PDF Print E-mail
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Friday, 13 January 2012

The Office of Utilities Regulation (OUR) is set to meet with telecommunications firm Digicel today following revelations that the previous administration had removed a key condition it had imposed in approving the company's merger with Claro.

When then Prime Minister Bruce Golding approved the merger in August, he insisted Digicel must continue operating two separate networks.

Bu yesterday, the OUR revealed that just weeks into his tenure as prime minister, Andrew Holness withdrew the two-network requirement.

With the removal of that condition, Digicel revealed yesterday it would be shutting down Claro in just over a month.

Contacted yesterday for an explanation, Holness said he took his decision after consultation with stakeholders.

He said Digicel had appealed to Golding to reconsider the two-network condition and he inherited the appeal.

"Keeping the two-network scenario carried the potential of not having one carrier operating eventually as the deal could have fallen through and a complete job loss would ensue," Holness told The Gleaner. "It was better in my mind to have a managed merger."

He noted that due to the election campaign, there had not been an opportunity for the decision to be carried through in Parliament, but he did not see that as an issue as he had discussed the matter with the then opposition telecommunications spokesman, Phillip Paulwell, who agreed with the move.

OUR writes to OPM

But the media release from the OUR, the body with oversight responsibility for such matters, stated that "the OUR has not been privy to the mechanisms governing the new arrangements and has written to the OPM (Office of the Prime Minister) seeking further details".

Paulwell, the newly appointed information and communications technology minister, acknowledged he had no difficulty with the change.

"Initially, I believed it was unworkable to ask a company to operate two different networks," Paulwell told The Gleaner last night.

He, however, said the Government would have to work to avert a situation where one company establishes a monopoly in the market.

He said he would be immediately reviewing proposed legislation aimed at encouraging competition. Among the chief issues he wants resolved is the rate of calls between networks.

The OUR said during today's meeting it would seek to have Digicel provide the requisite information to enable the office to respond to complaints from customers.

The regulatory body said Claro customers have been complaining about difficulties accessing the network and credit for their phones.

Meanwhile, in a release a few hours after the OUR statement, Digicel announced it would shut down the Claro network on March 1.

The company said the shutting down of the Claro network would allow it to operate more efficiently.

Digicel said, beginning next week, it would be inviting them to migrate to the Digicel network.

It said Claro customers who choose to go over to the Digicel network would be able to keep their Claro phone numbers.

Last month, the Fair Trading Commission (FTC) filed a lawsuit in the Supreme Court to prevent the Digicel-Claro deal from being finalised.

The FTC is arguing that the transaction will likely result in higher prices and a slowdown in technological advancements.

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