Costa Rica Cell Phone Industry up for Competition

Costa Rica Cell Phone Competition

After several months of delays and schedule changes, the office of the Telecommunications Superintendant (SUTEL) began accepting applications interested in competing in Costa Rica's cellular telephone market. By 12 p.m., SUTEL reported that 11 companies had applied.

Costa Rica's cell phone market was opened to private competition with the entry into force of the Central American Free-Trade Agreement with the U.S. (CAFTA) on Jan.1, 2009. The state-owned Costa Rican Electricity Institute (ICE) has been the country's sole telecom services provider for decades.

Over the course of the next 45 days, applications will be accepted from interested companies that meet conditions set by SUTEL. Conditions included proof of having provided cellular phone service for over five years in at least one country, have a minimum of 1.8 million subscribers, having been involved in the opening of a new market in at least one country and earning over $450 million per year in mobile services.

The window for potential companies to apply will close on Nov. 5. After this deadline, SUTEL will analyze the applications and select three companies, in addition to ICE, to provide cellular phone service in Costa Rica. According to SUTEL president George Miley, although the application process will be completed in November, the three selected companies are not expected to begin providing cellular service until September 2011.

For would-be competitors, the opening of the mobile market has been a slow process, with repeated delays. In January, SUTEL announced that they would begin accepting applications to enter the market in early February. But one day before the application process was set to begin, SUTEL informed interested companies that the process needed to be reworked. After SUTEL and ICE spent several months trying to define which frequencies would be available for competitors. The Constitutional Chamber of the Supreme Court (Sala IV) in early August ordered the market to open within 90 days. The current application process is in compliance with that order.

As of Tuesday, the companies that have applied to provide cell phone service are Cable & Wireless, Amnet Costa Rica, Centennial, Ericsson Costa Rica, Lucent Technologies Costa Rica, Claro Costa Rica, Costa Pacific, the law firm of Soley, Saborío and Associates, Consultores en Telecomunicaciones de Centroamérica, the law firm of Mavin Wiernik, and Costa Rica's ICE. 

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