QCOSTARICA – The market was declared dead several years ago, but the government of Costa Rica has been keeping it alive artificially at the expense of taxpayers purses.
Radiografica Costarricense S.A. (RACSA), is a subsidiary of the state-owned Instituto Costarricense de Electricidad (ICE), the major player in the telecommunications industry in Costa Rica, even after the market opened in 2010. The ICE is, in turn, a direct competitor of RACSA, which in recent years has accumulated tens of millions of dollars in losses, while at the same time losing the market share it once had. 2014 losses were estimated at US$5 million.
An article on Crhoy.com reports that the new managers of RACSA, appointed by the new Solis administration have announced a new strategy which should reduce its losses in the next two years and begin to grow in 2017.
The new manager of RACSA, Francisco Calvo, told Crhoy.com that the company will focus on continuing to provide services to private corporate clients who find it very costly to change suppliers, and the public sector in Costa Rica. RACSA, from 2015 will cease providing services to the mass telecommunications market.
Therefore, it will be through the public institutions and companies that contract their services that Costa Ricans will keep paying wages and other unnecessary expenses and will maintain the distorting factor in telecommunications market. These public institutions who are clients of RACSA, will they be obligated to do so instead of having the freedom to choose more efficient suppliers?