América Móvil Eyes Costa Rican Market
Mexican mobile giant América Móvil is interested in entering the Costa Rican and Panamanian telecoms markets in the light of the Central American Free Trade Agreement (CAFTA), Spanish news service EFE reported.

In an interview with Costa Rican newspaper La República this week, Marco Antonio Slim, the son of the owner of América Móvil, Mexican billionaire Carlos Slim, was quoted as saying, "we are interested in exploring new markets in telecommunications ... In Central America there are interesting countries."

Costa Rica and Panama are the last two Central American markets where the company does not yet have a presence.

Also, América Móvil has registered its brand name in Costa Rica including the Telcel logo under which it operates in Mexico, EFE reported citing an announcement in Costa Rica's official gazette La Gaceta.

The company also registered its "Amigo Kit" logo, which refers to its frequently used numbers call discount scheme.

América Móvil already operates in the other major Central American countries: in Guatemala through fixed line operator Telgua; in Honduras through Aló; in Nicaragua through PCS Digital; and in El Salvador with CTE Personal.

América Móvil has never made any secret of its expansion plans.

In August, América Móvil acquired Chilean operator Smartcom from Spanish power company Endesa and TIM Perú from Telecom Italia. In July the company also completed the acquisition of Paraguayan wireless operator Porthable from Hutchison.

According to Manuel Guereña a telecoms analyst with Standard & Poor's Mexico, the key element in any decision by América Móvil to buy is always the right price.

However, given that those are the only two markets in Central America where the company still does not have a presence to complete its footprint, Guereña does not rule out the possibility of the company starting up a new operation given that it has the financial solidity to do so.

"They are interested in completing their footprint in those markets. If there is an appropriate price they will look at acquiring an existing operation. If there is not the right price they might start up a new 'greenfield' operation," Guereña said.

Buying an existing operation may not be that easy Guereña said, adding that Panamanian incumbent Cable & Wireless is well established and has not made noises about selling.

In Costa Rica, state telecom monopoly Instituto Costarricense de Electricidad (ICE) could potentially seek a strategic partner. But that remains to be seen, Guereña said.

Costa Rica's government currently has a draft copy of the bill that proposes opening up the mobile market to competition.

However, a member of the team drawing up the liberalization bill admitted last week it now looks like bureaucracy could hold up the proposed market liberalization, originally slated for 2007.