Further Delay in Cell Permit

The web site Cellular-News reported last week that mobile phone operators will have to wait for a license until the middle of January, still another in a series of delays in breaking the monopoly held by the government agency ICE.

The regulating agency SUTEL had previously report that five companies are seriously competing, Cable & Wireless, Telefonica, Claro, Digicel and Millicom. A further six have requested data but possibly only for their intel.

There have been a number of delays in opening up the market since a law passed breaking ICE's monopoly. The law was one of 13 bringing Costa Rican law into accord with terms of the CAFTA trade pact with the U.S.

ICE has been blasted by some critics for alleged foot-dragging in cooperating with the opening of the whole telecommunications market. If so, it may be because of serious doubts that ICE can meet competition squarely after years of monopoly-induced complacency.

A case in point is the disastrous fire that struck an ICE data center, knocking out prepaid cell phone and 3G Internet service in late October. The Internet news service Top 10 Costa Rica reported that, although such vital centers should have 24-hour monitoring by on-site personnel or remote connections and though the alarm sounded, no human intervention resulted, so the automatic fire suppression system kicked in--with lamentable results.

The system released a suppessent aerosol powder into the room packed with delicate equipment. The system also automatically cut power--including the air conditioners. The computers, still consuming electrical power and covered in heat-trapping powder, were irreparably damaged, reported the news service.

Top 10 said that an on-site security guard with "a normal amount of training" could have avoided the self-induced destruction by simply pressing a button to shut down the system. Recovery, points out Top 10, required extensive replacement of complex and expensive equipment.

ICE, which began as a pure electrical company, was awarded by past government with the phone monopoly and then telecom responsibilities, is somewhat of an institutional sacred cow. The state run company was widely seen with its rural electrification in the 1970s as an example for developing countries. But with increasing political clout came a decline in service. Waits of sometimes years to obtain phone lines became common.

Its record in telecommunications has proven dismal. After the market opened up to competition, ICE had to be given a deadline by the courts to cooperate. The nation waits...

The insurance market, once the sole domain of the National Insurance Institute (INS), was much faster in getting open to competition than the mobile phone and Internet server sector.

Update: on Tuesday November 9th, the SUTEL released a clarification and further information, the announcement will be official once published in La Gaceta on Thursday.

According to SUTEL, interested parties have 23 business days to present their technical and economic offers, which complies with the minimum time frames established in the Administrative Contracts Law.  This change was requested by the Comptroller General and takes into account requests by parties interested in bidding.

The principal modification in this sense is the direct concession of microwave links.  SUTEL introduced changes in the wording that provides better guarantees to participating enterprises.

The Comptroller General requested a report detailing the present location of ICE microwave links and their frequencies, which SUTEL presented October 25th.  In addition, the interconnection rates were published on October 29th.  These rates relate to the calls that will be placed between networks, which is indispensable for guaranteeing that end users may speak with each other across networks.