Will LIME Survive the Claro-Digicel Deal?

摘要

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, the application of the US Horizontal Merger Guidelines to assess the competitive effects of mergers and acquisition. In addition, issues of international competition, technology standards and to reopen the debate on whether the telecommunication industry is a natural monopoly.