Monday, January 18, 2010

Costa Rica to open up mobile phone sector

By Leslie Josephs

San Jose, Costa Rica (Reuters) - Costa Rica on Monday kicked off the process of opening its cell phone market to private companies, ending the state telecommunications company's more than four-decade monopoly.

The telecommunications regulator, known as Sutel, said it will open up bids in April and hopes to complete the award of the new concessions in the second half of the year.

"We believe that in September, we'll be giving the operators the new concessions," said Sutel's president, George Miley.

Companies interested in bidding include America Movil, Latin America's leading cellphone operator, Spain's Telefonica SA, and privately-held regional mobile operator Digicel, Sutel said in a statement.

Company officials were not immediately available to confirm their interest in bidding although all three are active in other Latin American markets.

The state-owned Costa Rican Electricity Institute, or ICE, has dominated the telecommunications sector for more than 45 years and controls fixed line, cell phone and Internet service in the Central America nation of 4 million people.

There are currently 1.8 million cell phone lines in Costa Rica, where third generation, or 3G services, were introduced last month.

Costa Rica, which has traditionally had strong state control over utilities and other important parts of the economy, was obliged to end the telecommunications monopoly under the Central American Free Trade Agreement, which went into effect last year.

"They're coming here to compete with us," ICE spokesman Elbert Duran told Reuters, adding that the company welcomes the competition.

The ICE currently operates 88 percent of Costa Rica's cell phone frequencies, with the remainder reserved for non-comercial uses.

After the concessions process ICE will have approximately one-third of the available frequencies.

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