Business survival sometimes requires that bigger companies devour smaller ones. In the upcoming months, Internet providerand telecommunications company Radiográfica Costarricense S.A. (RACSA), a subsidiary of the Costa Rican Electricity Institute (ICE), could be absorbed by its mother company. ICE has overseen RACSA since its creation in 1964.
In a surprise announcement late last week, the general manager of RACSA, Alberto Bermúdez, resigned from his position after extensive meetings with the ICE Board of Directors and ICE’s executive president, Eduardo Doryan. According to a statement released by Pablo Ureña, a member of RACSA’s Board of Directors, Bermúdez’s resignation is an indication that RACSA will soon be downgraded from an autonomous telecom company to the status of “a simple customer service company” under ICE that will “no longer offer its own services.” Currently, RACSA provides internet access to over 100,000 clients in Costa Rica.
During a press conference Tuesday, Doryan vehemently denied that any decision had been made regarding the absorption of RACSA and indicated that Bermúdez’s resignation was a personal decision. Doryan also repeatedly said that any decision made by ICE regarding a change in the status and functions of RACSA would be made to strengthen both companies.
“I want to say very clearly with all my conviction that I came to ICE to strengthen each and every one of its parts,” Doryan said. “ICE represents an important part of the national heritage and RACSA, as part of ICE, is an integral part of the national heritage that we are going to defend and strengthen.”
Doryan explained that, since the Central American Free-Trade Agreement with the U.S. (CAFTA) opened the telecom and cell phone markets, ICE has had to adjust several of its practices in preparation for competition, including redefining the role of RACSA. Prior to Jan. 1, 2009, when CAFTA came into effect, ICE (including RACSA) had been the sole Costa Rican telecommunications provider – save for Amnet, which has ICE’s authorization to provide Internet service.
“We have never had to be marketers or salesmen or promoters,” Doryan said. “We are experts in telecommunications but we have a lot to learn about marketing and sales. In times like these, there will be many technological, regulatory and personnel changes.”