Top 10 Costa Rica

Dialling into Costa Rica’s mobile market

Costa Rica finally on Tuesday announced the terms of a tender that will open the last frontier of the free market in cellular service in Latin America.

The tender will invite bids for three bandwidths to compete with the Costa Rican Electricity Institute, which currently controls the state monopoly on mobile phones.

The likely competitors already include leaders in markets in the region: Mexico’s América Móvil, controlled by Carlos Slim; Spain’s Telefónica; Luxembourg-based Millicom; Britain’s Cable & Wireless; and the Irish reggae boyz from Digicel, based in Jamaica but controlled by Dennis O’Brien.

Costa Rica was obliged to abolish state monopolies in cellphone service and insurance as a condition of joining Cafta, the free trade accord between the United States and Central America.

Cafta was approved by Costa Ricans in a referendum by only a very narrow margin some three years ago. Since then, however, foot-dragging bureaucrats and legal wrangling by one’s learned friends have delayed the opening of the mobile market.

Now the potential contenders are being given six weeks to place their bids.

With a stable – if in some cases rather stuck- economy, Costa Rica has a relatively wealthy population in regional terms, yet mobile penetration is scarcely over 50 per cent. Panama, which has similar levels of prosperity, has more cellphone lines than people.

That leaves the potential bidders for the Costa Rican concessions to do the math.