DIGICEL has done a deal to swap mobile businesses with its giant rival owned by the Mexican billionaire Carlos Slim.
The Irish mobile phone company set up by Denis O’Brien is taking over the Jamaican operation of Slim’s America Movil. In return, Digicel is selling its mobile phone operations in Honduras and El Salvador to America Movil.
The deal includes an undisclosed cash payment to Digicel, which has 11.5m customers in the Caribbean, Central America and the Pacific.
America Movil has 225m customers across the region. Its Claro subsidiary, which competes with Digicel in Honduras and El Salvador, has a 33% market share in Central America and a 43% share of the Caribbean market.
Slim’s company is Latin America’s largest. Forbes magazine ranked him as the world’s richest man.
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Digicel entered the Jamaican market in April 2001 and is the dominant player there. It moved into El Salvador in April 2007 and Honduras in November 2008.
O’Brien’s company, which raised €300m last year and delivered sales up 32% to $580m in the last quarter of 2010, has been engaged in rivalry with America Movil in a number of markets. In Panama, for example, the companies competed for licences.
Slim also emerged as a 1% stakeholder in Independent News & Media (INM) in 2008, at the time that O’Brien was engaged in a battle for control with the O’Reilly family.
At the time, there were opposing schools of thought about whether Slim was in the O’Reilly or O’Brien camp and would play a part in the takeover battle. Slim later described the INM investment in the New Yorker as a “bad one”.
The deal will close in the second quarter.