Digicel Group described the decision as “regrettable” but says that the merger spells “the end of competition in the telecoms market for smaller players”.
The company has subsequently voiced its intent to apply for voluntary liquidation.
Digicel Panama says it has repeatedly stated to the Panamanian government that it could not continue to fund a three-player market and said costs for additional spectrum were exorbitant.
The government of Panama owns 49% of the combined entity and Digicel adds that it has already engaged in “predatory” pricing that will make it impossible for Digicel Panama to operate profitably in the country.
In the past few years, Digicel says it has taken numerous strategic initiatives with its sub-brand.
This includes the appointment of an investment bank to actively market the business to financial and strategic parties and extensive engagement with the Panamanian Competition Agency in relation to the merger.
The company adds that proposals to migrate its customers to another operator were not taken forward.
Digicel Panama has informed all of its employees about the decision, adding that it would honour its commitments to them.
Digicel said that its decision to withdraw from the market in Panama will have “no impact on its profitable operations in 31 other markets where it is business as usual”.
