Caribbean and Central American mobile operator Digicel has reached an agreement with the government of Antigua & Barbuda to cede some of its spectrum in the 850MHz and 900MHz bands to state competitor APUA.
The deal thus ends a bitter dispute with the country’s prime minister Gaston Browne.
In a statement, the Irish-owned company said it had reached an “amicable” agreement with the authorities that “signals a new era of constructive relations with the government.”
The Daily Observer reported that Digicel had agreed to return 2MHz in the 850MHz band and 9MHz in the 900MHz band. Seemingly, a key deal-breaker was the government’s hint that it would grant Digicel automatic continuity of its licenses beyond 2021.
With the agreement, Digicel will discontinue a lawsuit against the government intended to prevent the authorities from confiscating spectrum.
The government is also reportedly seeking a settlement with Cable and Wireless (Flow) for the transfer of 3MHz in the 850MHz band to APUA.
The spat first started in May when the government ordered the company to return a significant portion of its spectrum by May 31 with the aim of more “equitable distribution” of the band, namely to be given to APUA, whom the government says urgently needs spectrum in the lower bands to be able to compete.
Digicel responded by securing a court order saying that it agrees with fair competition “but this is not the way to go about it.”
In response, the prime minister took a more belligerent stance, alluding to Digicel as a “monopoly” and threatening to force the company to sell a 51% controlling stake to the government.
Digicel, which operates in 31 markets in the Caribbean, Central America and Asia Pacific, is struggling to balance a US$6.7bn debt burden.
In January, after four months of negotiations and numerous deadline extensions, Digicel reached an agreement with 98% of bondholders in a “distressed debt exchange” deal that will see their bonds paid off two years later than originally planned.
A report in the Irish Business Post last week reported that Digicel’s riskiest bonds had slumped to a record low.
In a July analyst report, Moody’s said Digicel’s ‘Caa2’ rating reflects the “increased risk of Digicel making another distressed exchange or debt restructuring within the next 12-18 months, considering still weak operating results and liquidity.”
Playing against Digicel is the fact that its operations are all in emerging markets with a history of economic instability exposed to the risk of depreciation of currency depreciation against the US dollar, as well as exposure to adverse weather events. (https://www.bnamericas.com/en/news/digicel-settles-spectrum-dispute-with-antigua–barbuda-govt)
