ICE sees strong mobile growth

2 Dec 2004

Costa Rica’s only mobile operator, ICE Celular, boasted a mobile customer base of 960,000 at the end of November, up from 756,235 at the start of the year, of which 400,000 were GSM users and 560,000 TDMA subscribers. The increase was, in part, thanks to a flash sale of 17,000 GSM lines in just 36 hours, after they were confiscated from non-paying customers earlier this week. The operator also has 38,000 TDMA lines available for sale, but these are not as popular as the GSM option and the cellco has found it hard to sell them.

Costa Rica has long suffered from a large waiting list for a mobile connection; in mid-2002 it stood at around 400,000. The government now claims to have all but eradicated this thanks to increased investment in ICE’s wireless infrastructure. The cellco launched its GSM network in December 2002 having contracted Alcatel to supply network equipment for 400,000 lines; it had previously only offered TDMA technology. It was not until April 2004, however, that the full quota of lines were in service and, even then, a number of value added services – including internet access – were still not available to all users.

In early 2003 ICE launched a tender for an additional 600,000 GSM lines in a bid to eliminate the waiting list completely, but this was delayed by constant budget cuts imposed by the government – and the resultant workforce strikes – and it was not until December that Ericsson was contracted to supply and install the equipment in a USD130 million deal. Again, though, the process continued be dogged by controversy and the deal was contested by failed rival bidders Motorola and Alcatel, which claimed the tender was not transparent. In September 2004 the contract was officially voided by the regulator, due to ‘inconsistencies’ in the tender process. Ericsson has appealed against the decision, and is currently awaiting the outcome. If the court approves its appeal, it would be able to install the new lines within five months. Because of the delays in the tender process, the country’s waiting list is thought to have crept back up again; local paper Sasso has suggested that it now stands at around 200,000.

Costa Rica, Grupo ICE (Kolbi)