If You’d Like to Place a Call, Please Hold…

May 30, 2008

Put those hopes of having a private cell phone company arrive soon on ICE, because it may take years before the telecommunications market opens wide in Costa Rica.

It is expected to take “no less than two years before we see a competitive market,” said Elbert Durán, spokesman for the Costa Rican Electricity Institute (ICE).

Before that happens, the Legislative Assembly must pass two liberalizing telecommunications bills to bring Costa Rica into compliance with the Central American Free Trade Agreement (CAFTA) with the United States.

Once passed, the bills would open the telecom industry to private firms and create a regulating body to control the sector.

One bill already made it through the first gauntlet when the assembly passed it in a second debate. The other bill was passed in first debate and is waiting the assembly’s second nod of approval.

President Oscar Arias then has to sign the bills before they are published in the official government paper, La Gaceta, and become law.

Meanwhile, international telecom companies near and far are looking to Costa Rica with renewed interest.

Multimillionaire Carlos Slim, owner of mega cell phone operator América Móvil, told Reuters earlier this month that he was interested in the Costa Rican market.

“We have to see under which conditions the public auctions are opened,” Slim told the wire service. “We don’t know how many licenses they are going to give, but in general, yes, we are interested in all of Latin America.”

The company’s official stance was more reserved.

“We do not comment on rumors or speculations of possible acquisitions, sales, associations, mergers or future projects,” wrote América Móvil spokeswoman Luisa Fernanda White in an e-mail.

Telecom company Vodafone of Spain was equally cautious.

“We don’t know if it’s in Vodafone’s plans to enter the Costa Rican market,” a company spokeswoman stated.

A representative at Spain’s Telefónica did not respond to Tico Times requests for comment. ICE has not had any conversations with private companies interested in a slice of the Costa Rican market.

“We will have them when it is time,” Durán said.

Costa Rica is lagging behind its Central American neighbors, as Panama, Guatemala, El Salvador, Nicaragua and Belize have fully privatized their telecommunications markets.

Arnoldo Jiménez, director of América Libre Institute and an architect of El Salvador’s telecom liberalization, said Costa Rica has always been a model country in the region, but it is behind when it comes to telecommunications.

“There’s a normal opposition on behalf of administrators,” Jiménez said. “They lose their captive market.”

Citing El Salvador’s case as an example, Jiménez said there are no losers in liberalization. Customers get better rates, quality of service and phone selection. Companies become more efficient through competition.

And, with the expansion of the industry, more jobs are created.

Even former executives in state-run telecom companies benefit.

“They are very well-paid executives in the private industries,” said Jiménez.

An open telecommunications market in Costa Rica would be welcome news to foreigners, who are not allowed to own their own land or cell phone lines through ICE.

Those who do tote cell phones have acquired them as lucky hand-me-downs.

Others have asked a Costa Rican friend to solicit a line on their behalf, unbeknown to ICE. But an ICE representative said it does not have to be that difficult.

“Right now a foreigner who proves his status in the country … can access the telecommunication services that ICE offers,” Durán wrote.

Currently, prepaid landline services are available for all to use through the telephone cards Colibrí 197 and international 199.

Prepaid mobile services are still in the works. ICE plans to issue three cards corresponding to three recharge amounts, according to an ICE spokeswoman.

The estimated date of the cards’ release? The second half of 2009.

lfriday@ticotimes.net

 

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