Cellcos renew licences, bag cut-price LTE spectrum

3 Apr 2014

The Jamaican government has renewed the spectrum licences of the nation’s two wireless providers, Digicel and LIME, extending their concessions for a further 15 years. The Jamaica Observer writes that Phillip Paulwell, the Minister of Science, Technology, Energy and Mining signed the two concessions yesterday, with Digicel also purchasing additional spectrum in the 700MHz range. In renewing their licences, the duo are expected to contribute some JMD12.65 billion (USD114.4 million) to state coffers, representing JMD9.36 billion from Digicel and JMD3.29 billion from LIME. Commenting on the agreement, Paulwell explained that the renewal was being carried out a year ahead of schedule as the duo planned to invest heavily in the country and required the security of the updated licences to do so. Indeed, whilst Digicel paid just USD25 million for its 2×12MHz block of 700MHz spectrum – just over half of the USD45 million reserve price set for the frequencies when they went to auction late last year – the Jamaica Gleaner quoted Digicel CEO Barry O’Brien as saying that the cellco now plans to deploy a 4G Long Term Evolution (LTE) network using the new frequencies.

Facing accusations that the spectrum had been sold below value, the minister admitted that the government’s earlier expectations had been set too high: ‘In retrospect, it would have been difficult for us to have got as much as we [expected]…and even after we were seeking to negotiate, we were [getting offers] way below the USD25 million – people were coming to us [with bids] at USD10 million.’

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