Basic telephony liberalisation arrives in Nicaragua, just in time

19 Apr 2005

Nicaragua has become one of the last Central American countries to liberalise its local, long-distance and international telephony sectors, following the long-awaited opening up of the market last Friday. The country’s mobile telephony, VSAT, data communications and internet access sectors have long been open to competition, but plans by regulator Telcor to liberalise the basic voice telephony services market have been delayed by its attempts to introduce a new regulatory regime.

Analysts predict that a number of small niche service providers will enter the market in the immediate wake of the expiration of Enitel’s monopoly. It is hoped that competition will cut long-distance and international call rates by as much as 80%, in a country saddled with some of the highest tariffs on the continent. However, it is unlikely that many will attempt to enter the local calls sector given the high costs required to roll out fixed line infrastructure to compete with the incumbent. Enitel was recently taken over by Mexican telecoms powerhouse América Móvil, which is currently seeking approval for its plans to merge the operator with its cellco PCS Digital and cable broadband provider Turbonet. The proposed merger will give América Móvil effective control of 100% of the fixed line market and close to two-thirds of the cellular sector, meaning an influx of competition is desperately needed now more than ever. The country’s new regulatory regime will include the transformation of Telcor into Superintendencia de Telecomunicaciones (Sitep), operating under the wing of the public services watchdog, Superintendencia de Servicios Públicos (Sisep), in an attempt to transfer regulatory power from the government to the legislature. The Nicaraguan Congress is due to appoint the new Sisep board later this month. Telcor had originally planned to liberalise the market on 18 December 2004 but has spent the intervening months arguing with the government over the exact remit and powers to be handed to Sisep.

Nicaragua, Claro Nicaragua