The telephone company Digicel Panama SA today requested its voluntary liquidation before the Civil Courts of Justice, after assuring that there is no free competition of supply and demand in the country.
The company’s statements come after the Government approved the merger of Cable & Wireless Panama (CWP) and Claro, a decision that its judgment “represents the end of free competition for the telecommunications market in the country.”
The company reported that it will continue to provide its services on a regular basis to its individual and corporate clients, until the legal process that formalizes its exit from the Panamanian market, where it began operations in 2008, is completed.
Digicel Panama SA communicated the legal action to its nearly 170 employees, whom it thanked for their commitment, while assuring them that the firm will fulfill its labor obligations with them.
Since October 2021, when the transaction between CWP and Claro was announced, the company filed legal actions and warned of the implications that this merger would have on the telecommunications market, with negative consequences for the employees of Digicel Panamá SA, its clients and the foreign investment in general.
The approval of the merger without considering the appropriate remedies for the remaining operators eliminates free competition and puts Digicel Panamá SA at a disadvantage, compared to the rules that existed when it entered the market in 2008.
Digicel Panamá SA reiterated that the approval of the merger represents a conflict of interest for the Government, which acted as judge and party by allowing the merged companies to control 56% of the market, with the Panamanian State having a 49% stake in this new dominant operator.
In this way, true competition in the telecommunications sector is eliminated, spoiling the benefits that the opening of the sector brought to Panamanian consumers, as reflected by the fact that there are 5.6 million active cell phone lines in the country.
“It is not sustainable for us to continue investing in the market,” said Digicel Group president Denis O’Brien, recalling that the firm paid US$86 million for the operating license in 2008, and since then it has invested more than US $575 million in a quality service and network for consumers and businesses, in addition to generating direct jobs and hundreds of indirect jobs.
