Cell Phone Use to Double

Surprisingly, for such a talkative people, Costa Ricans have the one of the lowest rates of cell phone use in Latin America, according to the blog, Cellular News. But, predicts Pyramid Research, with privatization of the industry, that will jump 136% by 2015.

Until recently, ICE, the telephone company, held a monopoly, contracting cell phone companies by means of a cumbersome bidding process so arduous that currently a corruption trial of an ex-president is underway because of alleged improprieties in granting multi-million dollar contracts.

One obstacle to ratification of the Central American Free Trade Agreement (CAFTA) was that a special law had to be passed privatizing telecommunications to bring local law into accord with the trade pact. Costa Rica is the last country in Latin America to "liberalize" its telecommunications, reported Cellular News, and this slowed down the growth of cell use here.

According to the Pyramid study, only 52% of Ticos had the mobile phones at the end of 2009. This is "not consistent with the income level of the population," according to Jose Magana, senior analyst for Pyramid Research. But, he adds, "Costa Rica is auctioning three new mobile licenses over the next few months and the process is expected to be completed before year's end."

Magana expects this fresh competition to revolutionize the cell phone situation here. He predicts that mobile penetration will more than double by 2015 "with prepaid subscriptions accounting for 79% and that mobile revenue will advance to $831 million by 2015 from $603 million in 2009 with gains coming mostly from data services such as mobile broadband."

He also expects use of 3G handsets to jump ahead of the country's Central American peers. "The lack of subsidies in Costa Rica makes replacement of handsets very expensive for subscribers but we predict that competition will boost the adoption of advanced handsets, particularly among the high-end segment," he adds, foreseeing that 40% of handsets will be 3G by 2015.