Phone companies receive approval to charge for data consumption

SAN JOSE, COSTA RICA – October 19th, 2012 – Phone companies now have approval to charge for prepaid mobile phone Internet service by the amount of data consumed, instead of the current flat-fee model based on the speed of connection.

Last week, the Telecommunications Superintendence Council (SUTEL) approved the new rate model.

The maximum rate will be 0.0076 colons (plus sales tax) for each Kilobyte (KB), which comes to 7.6 colones per megabyte (MB). The rates will come into effect once they are published in the official newspaper, “La Gaceta”.

To put this in perspective, a modern web page can be up to 1 MB in size, which is 1,000 KB.  This means that it could cost up to 7.6 colones for every page you read online.  Inside Costa Rica recently launched a mobile version of its site, however, which is optimized for smartphones and drastically reduces the amount of data sent.

With this new way of billing, a customer that has prepaid phone service and consumes an approximate 55 MB per month, according to SUTEL, would pay approximately 483.68 colons (sales tax included) every 30 days.

ICE, Claro and Movistar have stated that the current model in which clients are charged a flat monthly fee based on the speed of the connection does not allow the majority of clients to enjoy the speed that they pay for, due to some users consuming more than others and causing congestion in the network.

But Daniel Tricarico, an international analyst for the telecommunications market, explained that the model of payment based on traffic consumption benefits the operators more than the consumers. The idea is for telephone companies to make the most of the increased data consumption as a result of the popularity of smartphones.

“Those who consume more will pay more.  In the model of billing-according-to- speed, you consume as much as you want for the same price.”

As of June 2012, more than 3 million people in Costa Rica accessed the Internet via their smartphones.

It looks as though post-paid users won’t escape the new billing model, either. SUTEL established a resolution to begin the process of setting an Internet-by-consumption rate for postpaid users, as well.