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El Salvador Regulator Blocks Digicel Sale to America Movil

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El Salvador's competition regulator, the SC has rejected plans by Digicel to sell its local subsidiary to America Movil.

The anti-trust body said that the combination of the two mobile networks under one owner would have an adverse effect on "competition and the welfare of consumers in the fixed and mobile telephony markets" and be detrimental to customers in general.

The body added that it was concerned that mobile phone costs in the country are higher than international averages and reducing competition in the market was not likely to improve the situation.

The deal to sell the El Salvador subsidiary is part of a wider agreement between the two companies announced last March which saw Digicel acquire America Movil's Claro business in Jamaica, in exchange for selling its operations in El Salvador and Honduras.

The Jamaican and Honduran transactions have already been approved by their local regulators.

America Movil had decided to walk away from the deal last December when the regulator imposed conditions that it was unhappy with, but a review of that decision was agreed, and has to have come down even more strongly against permitting the transaction.

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Tags: digicel  america movil  El Salvador