Orange says sale possible, but not definite
While sources citing insiders in Orange Telecommunications were the first to reveal that the French company was looking for a buyer for its Dominican operation, its only one in Latin America, now the sale may or may not happen. As reported in the Jamaican Gleaner, there are five prospective buyers, with Digicel and Cable & Wireless Communications being among the strongest contenders.
However, amidst unconfirmed reports that Digicel Group had put together a EUR1 billion proposal, Orange Dominicana reportedly said on Thursday, 6 November that a sale of the business though possible, was not definite.
“As previously announced, the group is currently conducting an asset review of its operations in the Dominican Republic. As is usual practice for such a review, this includes a process in which potential buyers are invited to submit offers,” reads a statement from the French-owned company.
“However, the group emphasizes that the sale of its activity in the Dominican Republic is only one of several options available and that no decision has been made in this respect.”
The company is the second-largest mobile-network operator in the DR and is estimated to have almost 40% of the market.
It has been reported that the company is seeking to concentrate on core markets such as Europe and Africa and to possibly offload non-core companies in an attempt to improve its finances.
The Gleaner points out that the buyer of Orange Dominicana would gain almost 40% of the market in the Dominican Republic, behind market-leader America Movil SAB, through its Claro brand, which reportedly has about a 50% share. A win by Digicel would ramp up rivalry between the two telecoms again after their deal two years ago that saw America Movil’s Claro retreating from Jamaica and Digicel giving up its Honduras market. A similar deal for El Salvador was nixed by the local telecoms regulator.
Orange Dominicana reported wireless sales of EUR451 million in 2012, or about one per cent of Orange’s total revenue, according to a Bloomberg report.
The DR has a mobile penetration rate of 86.9%, according to data compiled by the Dominican Telecommunication Institute.
Category: DR News |