America Movil is to sell its business in Jamaica to rival Digicel, while acquiring Digicel’s operations in Honduras and El Salvador. The companies did not discuss the terms for the deals, which are expected to close in the second quarter of 2011, although there will be a cash payment to Digicel as a result. The transaction is also subject to regulatory approvals, a process which may not be smooth due to the overlap between the businesses. The Jamaica Observer reports that the arrival of America Movil into the country “made a big marketing splash but failed – in most people’s eyes – to seriously shake the foothold that [Digicel] has cemented on local soil.” America Movil has apparently been gaining ground among the youth segment, and it was noted that the reduced competition may not be to the benefit of consumers.

According to Wireless Intelligence figures, in El Salvador the combination of the America Movil (Claro) and Digicel businesses will create a new market leader with 3.64 million subscribers, overtaking current number one Millicom, which has 2.73 million. Also significant in this market is Telefonica’s Movistar, which has 1.45 million customers. In Honduras, the company will become a strengthened number two with 2.62 million subscribers, closer to Millicom’s 4.45 million. Perhaps the biggest issue will be in Jamaica, where the strengthened Digicel will have 2.79 million customers, compared with 757,000 for its only competitor, Cable & Wireless’ Lime.