The Dominican Telecommunications Institute (Indotel) announced on 25 September 2017, with Resolution 056-17, its approval for Altice Hispaniola’s application to merge its Orange Dominicana and Tricom units, subject to conditions. Indotel said the merger encompasses Orange mobile operator absorbing the authorizations, assets and liabilities of Tricom.
Nevertheless, Indotel conditioned the merger to Altice divesting itself of 30MHz of spectrum allocated to Tricom in the 1900MHz band in order to comply with anti-trust implications of the merger. Indotel said that 120MHz is distributed among the four telecoms – Claro, Tricom, Orange and Viva – with 30MHz each. Indotel has said the 30MHz had been assigned to each of four bidders and that the merger of two of them was contrary to the original conditions of this allocation.
Indotel argues that with the divesting of the 30MHz of frequencies in the 1900 MHz band, Altice would still manage 48% of the total spectrum, followed by Claro with 39.5% and Viva with 12.5%.
Another condition included is an order to reduce the price of interconnection fees charged by the entity resulting from the merger.
Altice acquired Tricom for US$400 million from Hispaniola Telecom back in November 2013, subsequently buying Orange Dominicana for US$1.4 billion from the Orange Group. To date, the companies have continued to operate as separate businesses.
Earlier this year Altice announced plans to rebrand its telecom operations worldwide, starting with Tricom and Orange in the Dominican Republic, both of which are in the process of changing their consumer-facing identity to Altice by mid-2018.
Altice in the Dominican Republic has rejected the decision of the board of the Indotel regarding the conditions for the merger. The company argued that since 2013, Indotel was aware of the future merger. “Under these premises in 2014, Indotel prepared its market concentration study with the merger scenario and approved without restriction the change of control of Tricom and Altice. Now in 2017, when Altice has lost market share, there is no justification that Indotel now suggests that our merger generates market concentration,” stated Altice in a press release. The company says that what is even more serious is that Indotel since 2011 had established the criteria for spectrum efficiency where Altice clearly complies with the parameters, even considering the merger, and even opens the possibility of purchasing more frequencies.
Desirée Logroño, senior institutional relations director, said that Altice is in second place in market share, behind Claro that has 53% of the mobile market and 71% of the fixed line market. She said that the Indotel decisions only affect the company that has challenged the dominant player in the market. She highlighted that the competition had forced the dominant player to lower prices for its services, which benefits consumers and contributes to the narrowing the digital divide.
Economist Andy Dauhajre has shared some statistics on the sector and the merge in an article in El Caribe. He explains that Claro has 55% of the mobile market, followed by Altice (Orange + Tricom) would have 41.5%, and Viva would keep its 3.5%. But in the frequency spectrum, Altice (Orange) has 90MHz and Altice (Tricom) has 55 MHz for 145MHz if the merger were authorized under the present conditions, while Claro having 95MHz and Viva 30MHz. As a result, Altice would have 53.7%, Claro 35.2% and Viva 11.1%.
Dauhajre further explains that this would create a competitive advantage in favor of the Altice with least number of mobile lines per MHz assigned in the radio spectrum used to transmit and receive data, that is less spectrum crunch and better service quality. As of 2017, Claro had 4,713,597 mobile lines within the 95MHz assigned to its frequencies. That is 49,617 mobile lines per megahertz assigned. If the merger of Orange + Tricom were to go through, they would have 145MHz for 3,552,801 mobile lines, or 24,502 lines per MHz. He observed that so far Tricom has underused the 55MHz when handling 171,913 mobile lines as of July 2017, or 3,126 mobile lines per MHz. Viva is handling 9,973 mobile lines per each of the 30MHz assigned.
Read more:
Telecom Paper
Listin Diario
El Caribe
28 September 2017
