Wednesday, 28 October 2020

Sutel Evaluating Free Market Pricing For Telecommunications

Court ruling sets precedent for cellular network operators to provide coverage


(QCOSTARICA) Telecom operators may soon be free to set their own rates, that is no longer have restrictions on the maximum tariffs, forms of collection and the quality of services they offer.

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That would mean that consumers will have to be more cautious when acquiring telephone and internet services, as operators can freely set prices according to supply and demand and no watchdog looking out for them.

The change comes from a decision of the Superintendencia de Telecomunicaciones (Sutel) – the government regulator, saying that there if an effective genuine competition between the companies in the six years since the breaking of the Instituto Costarricense de Electricidad (ICE) monopoly on telecommunications.

Gilber Camacho, chairman of the Sutel board of directors, says the methodology for the analysis has already been approved and results could be ready later this year.

The study not only applies to cellular and internet, but to all telecommunications, including fixed telephone, VoIP and international calls.

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According Walther Herrera, director of markets at the Sutel, “it is time” to review how the industry changed since the monopoly held by ICE, now represented by the Kölbi brand. He added that if there is effective competition, companies would have no incentive to raise prices.

The change, is adopted, would end the country’s model of regulatory pricing intervention of telecommunications that has been in place for the last 40 years.

Since the opening of the market in 2009, the telecommunications landscape in Costa Rica has changed, going from 1 supplier to 117 in 2013.

According to the Sutel, the cellular market shared by the three operators, as of September 2013 (the latest report available) is:  Kölbi, 65% with 4.278.183 active lines; Movistar, 16% with 1.063.148 active lines); and Claro, also 16% with 1.055.695 active lines. (The Sutel did not say who holds the other 3%.)

Thus the number of active cellular lines in the country, in September 2013, was 6.398.026 for a population of less than 5 million, a stark contrast to the pre 2009 days of cellular communications in the country, when a shortage of cellular lines and having to line up for hours, days or wait weeks and months to connect was all too common.

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