Costa Rica Telecom
Market Seen Opening Soon
By Brian Harris and John
McPhaul
SAN JOSE, Costa Rica
(Reuters) - Costa Rica,
one of the few Latin
America countries still
with a state-run
telephone sector, is
expected soon to open to
big foreign players as
part of a trade deal
with the United States.
Costa Rican President
Oscar Arias told the
Reuters Latin America
Investment Summit late
on Wednesday that
foreign telephone firms
are poised to enter the
Central American country
but that national
operator ICE will
continue to play a key
role in the industry.
"The (government) will
be very careful to
listen to the offers of
companies that want to
come here to compete
with the state firm,
which will be the
dominant firm without a
doubt," Arias said.
Opposition lawmakers in
recent weeks have backed
off earlier attempts to
block final passage of
laws to open key sectors
of the economy after
Costa Ricans voted in
favor of a regional free
trade deal with the
United States last year.
Costa Rica narrowly
approved the
U.S.-Central American
Free Trade Agreement, or
CAFTA, in a referendum
in October, and
lawmakers have been
haggling over the
details of its
implementation since
then.
Among other legal
changes, the deal
requires Costa Rica to
open parts of its
telephone industry and
its insurance business
to open to private and
foreign competition.
Because those industries
contribute heavily to
the nation's social
services budget, critics
worry about moving them
into the free market.
Lawmakers dragging their
heels forced an
extension to CAFTA's
ratification in
February.
Since then, opposition
legislators have pledged
to end parliamentary
maneuvers to block
passage of laws
necessary for the trade
deal to take effect. He
said Costa Ricans would
benefit from the
telephone industry's
privatization.
Like everyone, I want
competition to improve
the quality and price of
services," Arias said.
While Costa Ricans say
the ICE has done a good
job extending basic
telephone service
throughout the country,
the quality of cellular
and Internet services
lags behind neighbors
like Panama and El
Salvador.
The end of the state
telephone monopoly,
which was a top issue in
the debate over whether
to pass CAFTA, will
apply to cellular and
Internet access
services, not fixed
lines.
Across Latin America,
companies like Mexico's
Telmex and America Movil,
Brazil's Oi
Participacoes and
Spain's Telefonica, are
battling for fixed-line,
cell phone and
fast-growing Internet
market share.
CAFTA, the
second-largest U.S.
export market in Latin
America after Mexico,
includes Guatemala, El
Salvador, Honduras,
Nicaragua and the
Dominican Republic.
Costa Rica, a popular
eco-tourism destination,
is the only CAFTA member
not to have implemented
the accord by a deadline
last month. |
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