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To get a mobile phone, Costa Ricans endure long waiting periods and pay astronomical prices, only to end up with inaudible conversations, frustrating disconnections and service that barely reaches outside the capital, San Jose, reports Reuters (April 13, 2003). The culprit, everyone agrees, is the State-owned Instituto Costarricense de Electricidad (I.C.E.);

In the 1980s and early 1990s, Costa Rica was a paragon of development with a clear head start on mobile telephony, at least compared with its Central American neighbors mired in civil unrest. But now, after years of under-investment in telecommunications, Costa Rica lags behind its local peers. "The service is incredibly bad, dreadful," says mobile phone user Ricardo Villegas, who depends on his telephone to coordinate his textile import and export business;

Cell phone penetration in El Salvador, at 15%, outstrips Costa Rica's 12% figure, according to the London-based EMC wireless industry research firm. In Nicaragua, where only 6% of the population carries a mobile phone, handsets are a third of the price of phones in Costa Rica, where a basic phone costs US$150. Until just a few weeks ago, when new lines were activated, Costa Ricans faced a waiting list of up to a year before they could have a working mobile phone, vs. less than a day in Guatemala. Even then, state-owned I.C.E concedes its mobile phones will only work in 40% of the tiny nation's territory;

Ironically, the I.C.E is a source of great pride for Costa Ricans, and that has stymied sporadic government efforts to privatize the company or to make it more efficient. Attempts by former President Miguel Angel Rodriguez to privatize I.C.E, which also provides the country's energy, sparked a 22-day nationwide street protest in May 2000. I.C.E, formed in 1949 after the end of the Costa Rican civil war, is seen as a symbol of progress by many because it brought electricity and telephones to a poor, urbanizing nation. Telecoms and energy were put in government hands to direct power away from the coffee exporting oligarchy;

For the government of President Abel Pacheco, which took power in May 2002, I.C.E not only provides a poor service, but is also a drain on public finances. I.C.E, which generates 6% of Costa Rica's gross domestic product, is running a budget deficit of around US$40 million, according to Finance Ministry data. Despite the pressure to cut expenditure and phone users' complaints, I.C.E's head of telecommunications, Alvaro Rentana, says he is turning I.C.E's mobile phone business around;

I.C.E expects to have 400,000 new lines in operation by Dec. 31, after awarding French company Alcatel a US$152 million contract to increase the capacity for cellular connections this year, Rentana said. I.C.E is looking to award either Motorola Inc of the U.S., or Ericsson of Sweden a US$130 million contract to raise the capacity by a further 600,000 lines in 2004, he added. "By 2006, we aim to have 50% of all Costa Ricans using mobile phones. Considering the size of our economy, that will take us to saturation point." Many cell phone users remain unconvinced by I.C.E's ambitious plans, saying that while they are against privatizing the I.C.E., it should be forced to improve by opening Costa Rica to mobile telephone competition. "At up to US$450 a handset, cell phones are very expensive," said university student Mauricio Ramirez. "With competition, we'll get the phone for half price or free."

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COPYRIGHT 2003 Caribbean Update, Inc.
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Publication:Caribbean Update
Geographic Code:2COST
Date:Jun 1, 2003

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