New GSM Lines Possible By December, ICE Says
Costa Rica will remain without new GSM cellular lines for the balance of this year and if there are no setbacks, new lines could be on the market beginning in 2008, according to Claudio Bermúdez, a telecom manager with the Instituto Costarricense de Electricidad (ICE), the monopoly on telecommunications and electrical power.

Bermúdez says that it will take about 10 months to complete the process of expanding the cellular network, that includes the tendering process and installation of the equipment.

The last contract that saw the addition of 600.000 GSM cellular lines was mired in irregularities and investigations that delayed the project taking more than two years to complete.

The cellular market has been without new GSM lines since the 600.000 lines installed by the Ericsson company were all taken up last December, one year after they came online and much earlier than anticipated by the ICE.

To meet the demand, ICE is attempting to purchase some 300.000 GSM lines from Ericsson at a cost of us$65 million dollars, basing its decision on the Ley de Contratación Administrativa that permits it expand the Ericsson and Alcatel - the first GSM network provider - by 50%.

The ICE board of directors has given the green light to the purchase that would see more GSM cellular lines in the shortest possible time. The Ericsson offer is being presented to the Junta de Adquisiciones del ICE (ICE purchasing board), and then sent to the Contraloría General de la República (Comptroller's office) for approval.

The original proposal of purchasing 200.000 GSM lines from Alcatel who installed the first 400.000 GSM lines network was nixed after ICE decided to break relations with the company, as it cancelled the contract based on Alcatel's failure to provide a working network, as users of the Alcatel network continue to experience failures in completing calls, good reception and coverage.

ICE decided to take control of that network and has been working on improving the quality of the service.

Bermúdez is confident that the Contraloría will approve the purchase, which decision can take up to three months, and the balance of the year would then be spent installing the network.

"The process should take about ten months", said Bermúdez, which would mean that ICE could possibly start selling new GSM lines as early as December, in time for the Christmas shopping marker and the "aguinaldo" - the annual bonus paid to all employees, private and public.

Meanwhile, ICE can only provide GSM lines to customers as it gets tough on their billing process where an existing customer can lose their subscription if two consecutive bills go unpaid. ICE then groups the lines and offers them to new customers, usually selling out the lot in a matter of hours.

For the Asociación de Representates de Fabricantes de Celulares (cellular manufacturers association in Costa Rica) is concerned about all the delays. The association says that cellular sales are down 30% due to the lack of lines and estimate that lines that ICE pretends to buy from Ericsson would be used up in less than five months.

Meanwhile, ICE is moving ahead with its plans for the purchase of 1.5 million lines that will be of the latest cellular technology called 3G or third generation, that has the capacity to transfer multimedia files like photos and videos in addition to text messages.

That process could take a year or more and would not be available on the market until late 2008, according to Bermúdez.