First Two Cell Bids Accepted

After many delays caused by foot-dragging by Costa Rica's ex-monopoly, ICE, the telecommunications licensing agency SUTEL accepted the first two private company cell phone operator bids on Tuesday.

America Movil, owned by the richest man on earth, Mexico's Carlos Slim, and Spain's Telefonica submitted their bids, breaking a de facto four-decade monopoly by ICE on the cell market.

"It's a new era for the country," SUTEL president George Miley commented to the Reuters news agency. It was likely a relief to Miley after having suffered through delays caused by ICE's challenges and disagreement over concession terms for months, delays that brought a stiff protest from the Office of the United States Trade Representative.

The breaking of ICE's monopoly was forced by ratification of the CAFTA trade pact with the U.S., one of the conditions of which was opening of telecommunications and insurance. As Reuter correspondent Alex Leff observed, "Third generation (3G) cell phone services were introduced late in 2009 and prepaid mobile services common in neighboring countries in April of this year."

Coupled with lagging technology was ICE's reluctance to let go. Finally President Laura Chinchilla, fed up with ICE's obstructionism, ordered the state-run phone company to cease its challenges, after the Supreme Court had issued a similar order.

"Users will have many more options to choose from," America Movil representative Daniel Bernal told Reuters, "Competition will generate growth." Long-suffering ICE customers also hope it will promote better service. ICE currently services 2.6 million cell phone lines.

SUTEL requires bidders to commit to a $70 million initial investment to build new cell phone infrastructure and are expected to invest about a billion dollars in the next few years.

Such giants as Millicom, Digicel and Cable & Wireless did not submit bids as anticipated. Speculation as to why ranges from Millicom's problems with ICE some years ago to the small size of the consumer pool.