UPDATE ON DIGICEL PANAMA

KINGSTON, Jamaica, April 6, 2022 /PRNewswire/ -- Digicel Group Holdings Limited ("DGHL") today announces that Digicel Panama S.A. ("Digicel Panama") intends to apply for voluntary liquidation and withdraw from the telecommunications market in Panama. This regrettable decision has been made following the Panamanian Competition Agency's (ACODECO) approval of the Cable & Wireless and Claro merger (the "Merger"), in which the Panamanian Government is also a major shareholder and which effectively spells the end of competition in the telecoms market for smaller players.

Today's announcement will not come as a surprise to the Panamanian Government and Regulator. Since the announcement of the Merger, Digicel Panama has repeatedly conveyed in writing to the authorities that approval of the Merger without appropriate remedies would result in our exit as we cannot continue to fund the semblance of a three-player market. In addition to the initial licence cost, the continuous requirement to buy additional spectrum through auctions, together with the exorbitant renewals costs contribute to a high cost regulatory environment. 

Despite this, the Merger has been approved and the combined entity, in which the Panamanian Government is a 49% shareholder, has already engaged in predatory pricing and below cost selling with a significant deterioration in the market in recent weeks. We asked the Regulator to intervene but he has ignored this request. This will make it impossible for Digicel Panama to operate profitably and undermines the case for any further investment in the market.

DGHL has undertaken numerous strategic initiatives over the last two years in relation to Digicel Panama. These initiatives have included the appointment of an investment bank to actively market the business to financial and strategic parties, extensive engagement with the Panamanian Competition Agency in relation to the proposed Merger and finally proposals to migrate customers to another operator which were not taken forward. We have at all times behaved responsibly.

Digicel Panama informed its employees in Panama of its decision this morning and gave them an assurance that Digicel and Digicel Panama will fully honour their commitments to them. Digicel would like to thank our Digicel Panama employees for everything they have done for Digicel Panama, our partners for their support and our customers for having chosen us as their preferred communications partner in Panama.

Digicel holds its equity in Digicel Panama through an unrestricted subsidiary of DGHL for the purposes of our bond indentures and Digicel Panama is not consolidated in Digicel's financial reporting but treated as an investment in an associate.

This decision will have no impact on Digicel's profitable operations in its 31 other markets globally where it is business as usual; we continue to invest, to build out and enhance our services for our customers and to give back to our communities – and we look forward to doing so long into the future. Digicel does not expect the impact of this announcement to have a material impact on Digicel's financial condition.

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About Digicel

As a Digital Operator, Digicel is in the business of delivering powerful digital experiences 1440 minutes of each day to customers – that's every minute, all day, every day.

Through its world-class LTE and fibre networks, together with its suite of 8 apps spanning sports (SportsMax), music (D'Music), news (Loop), local radio and podcasts (GoLoud), TV streaming (PlayGo), enhanced messaging and marketplaces (BiP), cloud storage (Billo) and self-care (MyDigicel app), Digicel is the only operator in its markets that can deliver that.

Serving consumer and business customers in 32 markets in the Caribbean, Central America and Pacific, its investments of over US$7 billion and a commitment to its communities through its Digicel Foundations in Haiti, Jamaica, Papua New Guinea and Trinidad & Tobago have contributed to positive outcomes for over 3 million people to date.

With its Better Together brand, Digicel is making a promise of simply more to customers and communities and its 7,000 employees worldwide work together to make that a powerful reality day in, day out. Visit www.digicelgroup.com for more.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the federal securities laws of the United States. Certain other jurisdictions may have analogous concepts. Such forward-looking statements reflect, among other things, management's current expectations, plans and strategies, and anticipated financial results, all of which are subject to known and unknown risks, uncertainties and factors that may cause our actual results to differ materially from those expressed or implied by these forward-looking statements. Many of these risks are beyond our ability to control or predict.

Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. We do not undertake any obligation to update or review any such forward-looking information, whether as a result of new information, future events or otherwise.

Other disclosure

Our debt securities are not registered with the SEC or any other securities regulator and are not listed with any exchange. We have no intention of registering the securities in the United States or listing them with any exchange.

Regulation G

This release contains non-GAAP financial measures as defined by Regulation G of the rules of the Securities and Exchange Commission.

SOURCE Digicel Group Holdings Limited