Digicel, the latest entry into Panama's telecommunications business, is at odds with some of its distributors over cell phones that were either sold or given away but never activated.
The company has written a letter to its distributors stating that it has completed an audit of its inventory and found a discrepancy between the number of phones it has issued and the number that have actually been activated.
Referring to one of the clauses in the contract between Digicel and the distributors, the operator clarified that the agent is liable to Digicel for phones that are not activated, including ones that are taken during robberies.
That letter was sent on March 17. A few days later, the company sent bills to the distributors outlining how much money they owe for the unactivated phones.
The legal representative of two dealers who have 25 locations, who preferred not to be identified, told La Prensa that many of the missing phones referred to by Digicel were, in fact, given away during a company promotion in which a free phone was handed out to people who purchased another.
“They gave the phones away, and the clients never used them,” the lawyer said.
One dealer told La Prensa that some of the cell phones, which were being made available at low prices, were purchased for resale in other countries. This is why they were not activated in Panama.
It is also known that several stores have suffered thefts since Digicel opened for business in December.
The operator, meanwhile, said that “any action that Digicel is taking is properly covered by the distribution agreements agreed to between the parties.”
Digicel dealers profit from the sales of cell phones and also receive a commission for each phone that is activated.
However, several dealers have claimed that those commissions are not paid on time. Some say they have not received any commission since they started selling Digicel phones while others say they have not been paid since January.
Some distributors fear that if this situation continues, it will create holes in their accounts that will force them to close.
According to Digicel's web site, the company has had a successful launch in Panama. It lists 305 stores that distribute its phones, and in March, the Public Service Authority granted the operator 400,000 additional numbers on top of the 250,000 numbers it was initially given.