Costa Ricans Think Size
Matters
One of the biggest
changes the Tratado
Libre de Comercio (TLC)
- free trade agreement
with the United States
and Central America -
will have for Costa Rica
is competition in the
telecommunications
sector. However, nothing
has happened yet, as the
state owned Instittuto
Costarricense de
Electricidad (ICE) is
still the sole provider
of all telecommunication
services in the country.
However, that will soon
change. And Pedro Pablo
Quirós, president of
ICE, feels optimistic
that ICE's size is an
advantage in competing
in an open market when
the country's 4 million
plus population will
have a choice of
carrier, products and
technologies.
ICE currently employees
some 20.000 people and
has assets of us$8.5
billion dollars with
daily earnings of us$5.5
million dollars.
According to Quiros, ICE
size is not match for
the competition as it
has already established
a national coverage and
at the cheapest rates in
the region.
ICE's advantage will
also be its national
pride, as Costa Ricans
are expected to continue
with ICE over
competitors.
Currently Costa Rica is
the only country in
Central America where
you cannot get a
cellular telephone, as
the state institution
has constantly struggled
to meet the demand even
though it has 1.8
million cellular lines.
Due to the lack of lines
for new subscribers, ICE
has constantly
maintained a strict
policy of not connecting
non-residents to its
cellular networks and
unlike in most other
countries, does not
offer prepaid cellular
service.
However, that will soon
change as the
competition gears up to
enter a free Costa Rican
telecommunications
market.
And ICE will be
prepared, according to
Quirós with the expected
purchase of 1.5 million
additional cellular
lines of the 3G
technology and will soon
be experimenting with
offering packages that
include air time and
equipment.
The changes are all
possible to the passing
of he new
telecommunications law
that allows a
competitive
telecommunications
market and ICE greater
organizational and
financial freedom, like
being able to seek out
debt for investment
equivalent to 45% of its
fixed assets.
Before the change, ICE
has to the Central Bank
and several government
ministries and agencies
before it was able to
get into debt.
However, most important
according to Quirós, is
that private competitors
are expected to operate
in the country in the
form of alliances with
ICE rather than in
direct competition.
"We are too big and too
cheap for a lot of the
competition. They will
want to work with us and
not against us", said
Quirós.
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