Market Consolidation in the Telecommunication Sector: Will LIME Survive?

Abstract

This teaching case presents a situation confronting Garfield Sinclair, the Managing Director of LIME Jamaica, a telecommunication provider, in March 2011, learning of a possible swap deal between the market leader, Digicel and its closest rival Claro (LIME's two biggest competitors). The unexpected deal threatens to create a new monopoly in the Jamaican telecommunications market. Ironically, LIME held a monopoly position in Jamaica until 2000, when new licenses were offered in the country. Now, LIME's very existence is threatened and Sinclair must decide what to do. This case supports debate on whether the telecommunications industry is a natural monopoly, and can serve as a vehicle that improves students’ understanding of the complex interplay among technology, business strategy and the law.