Nicaragua's mobile communications sector is highly concentrated. The market is currently lead by Movistar Nicaragua and Claro Nicaragua, with a total combined market share of 99.6% as of year-end 2018; Chinese operator Xinwei, which entered the market in 2016 under the Cooltel brand, has yet to achieve expected growth and closed 2018 with only about 25,000 subscribers.
This is the first transaction to close since Millicom announced in February an agreement to acquire three subsidiaries of Telefónica in Central America in Panama, Costa Rica and Nicaragua.
Telefonía Celular de Nicaragua, S.A. adds approximately 4 million mobile customers to TIGO with a 4G network that is accessible to 51% of the population in Nicaragua.
The deal accelerates the execution of Millicom’s fixed-mobile convergence strategy, it helps consolidate the company’s leadership position in Central America, and it diversifies and balances the geographic footprint of the company in its mission to build digital highways and opportunities therefore connecting more users and developing communities throughout the region.
The agreement was initially struck in February to buy three Central American units from Telefonica for $1.7 billion. Deals for Telefonica’s operations in Panama and Costa Rica are still undergoing regulatory review.
Millicom says the newly acquired assets complement its operations in Central America, and that it will now be able to cross-sell mobile services to its existing cable customers and cable services to Telefónica’s mobile customers.
All of the three Central American countries have among the highest disposable income levels in the region, but penetration rates for digital services are relatively low.
Millicom operates in Bolivia, Colombia, El Salvador, Guatemala, Honduras, and Paraguay under the Tigo brand, serving more than 50 million mobile telephone customers and 3.3 million households.
The chart above gives a good summary of the Spectrum in use in Nicaragua. At present 3G and 4G is in use but the coverage needs improvement in the future.
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