San José, Costa Rica, since 1956

Slow start for Costa Rica’s new telecom market

In a five-minute span, 15 people stopped in front of a Movistar store across the street from the National Theater in downtown San José on Wednesday afternoon. Paper signs on the front doors announced: “Coming soon.” 

But inside, workers donning Movistar shirts prompted interested customers to rap on the door and ask, “When will the store open?” 

Movistar, the local brand of Spanish company Telefónica, and Claro, owned by Mexican company América Móvil, entered the Costa Rican telecommunications market this week. Despite public relations hoopla, the first few days of private competition were marked by sporadic store openings and closings, spotty connections, and limited availability of calling plans. 

“If God permits it, we’ll be open tomorrow,” a Movistar manager in the capital said on Wednesday. “Lots of interested customers stopped by the store in the last two days. If all goes as planned, we’ll offer service plans to new subscribers tomorrow.”

The manager, who asked not to be named, said that Movistar locations at TerraMall in Cartago, Paseo de las Flores in Heredia and in Puntarenas, on the central Pacific coast, had been open since Tuesday, the day the company officially launched service. 

Despite the inaugural week’s hiccups, many cellphone users are interested in what the new market will offer. Movistar and Claro are the first foreign cellphone operators to challenge the Costa Rican Electricity Institute’s (ICE) monopoly in telecom.

“I’m not sure if I really even want to switch coverage from ICE,” said teenager Randal Rivas. “I really just want to see what my options are, what kind of phones they have and if there are any discounts.”  

“I’m definitely switching to Movistar,” said Pablo González, who is in his early 20s. “Movistar is an international company that already has a good reputation in big countries like Mexico and Colombia. They know how to provide coverage in big countries, so I assume Costa Rica will be easy for them.”

González said that he made the decision to switch because of unreliable ICE coverage in other parts of the country. 

“When I am out of town or in a rural area, I never know if I will have service or not,” he said. “I think Movistar will provide better coverage across the country.”

According to Jorge Abadía, director of Movistar Costa Rica, the company is the only provider of both pre-paid and post-paid plans for the BlackBerry. 

“The options we offer through our BlackBerry plans are the broadest and most innovative in the Costa Rican market,” he said. 

ICE’s brand Kölbi is the only operator that currently offers the popular Apple iPhone, though both Claro and Movistar representatives said that they will sell the iPhone 4S model within the next 15 days. 

Claro, which operates throughout Central America, has a long-standing relationship with the iPhone and was the first provider to offer it in Latin America. Both Claro and Movistar also offer the Samsung Galaxy S, considered a competitor of the iPhone, which offers a touch screen with dozens of applications, such as a music player, camera, map and weather icons, as well as Internet and video capability.

 Movistar released details of its calling plans on Tuesday.

Compared to Kölbi, both companies offer similar pre-paid packages, charging ₡34 ($0.07) per minute for calls, an initial SIM card fee of ₡2,500 ($5) and ₡1.7 for each text message. Movistar offers a plan for up to 150 minutes of calls to selected phone numbers for ₡3,000 ($6). A plan for calls made only to other Movistar users offers 150 minutes for ₡3,000. Kölbi does not offer a similar package.

 For post-paid plans, Movistar is slightly less expensive than Kölbi. A basic 60-minute plan with 30 text messages costs ₡3,277 ($6.44) with Kölbi. A similar plan with 60 text messages and 60 minutes of calls to a favorite number costs ₡3,250 ($6.40) with Movistar. Movistar’s rates on bigger plans are also less expensive.

Kölbi’s 750-minute plan, for example, includes 1,500 text messages for a monthly cost of ₡24,423 ($48).

Movistar’s 800-minute plan, which includes 400 minutes with a favorite number and 1,500 text messages, is priced at ₡24,000 per month ($47).

 Claro’s pricing strategy and plans will be available today, when Claro’s first store opens on Avenida Segunda in downtown San José, 100 meters east of the Social Security System.

According to Zaida Plácido, marketing director of Claro Costa Rica, many of the post-paid options will include significant discounts on phone models, such as BlackBerrys. Pre-paid plans will begin at ₡2,500 ($5) and charge ₡34 ($0.07) per minute.

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