Trio pledge to expand 4G coverage; Sutel to lower price ceiling for internet services

20 Oct 2014

Costa Rica’s trio of mobile network operators – ICE (which offers services under the ‘Kolbi’ name), Claro and Movistar – have confirmed that they intend to continue expanding coverage of 4G Long Term Evolution (LTE) services in the coming months. El Financiero writes that Claro, which currently covers the western and northern areas of San Jose, as well as Alajuela and Heredia, plans to triple the size of its footprint by 2016, whilst Movistar has said that it plans to expand ‘rapidly’ to serve the areas of the country it does not already cover. Kolbi, meanwhile, offers LTE in 357 locations and plans to expand further.

In related news, Costa Rican regulator Sutel has failed in its obligation to lower the maximum price for internet services for five years. Under the terms of Costa Rica’s telecoms legislation, Sutel should reduce tariffs each year based on increases in the efficiency of providing those services, ensuring that as the cost of providing internet services decreases, end-user prices are also lowered. A spokesperson for the regulator noted that at present Sutel will only lower the rate if it decides that a review of the cost is necessary, opting instead to leave the market to determine pricing. The only time Sutel has exercised this authority is with mobile internet, setting the price-per-kilobyte to CRC0.0075 (USD0.00001) for both pre- and post-paid plans. The Ministry of Science, Technology and Telecommunications (MICIT) has argued that Sutel needs to take measures to lower the price of fixed broadband services, noting that although broadband prices in Costa Rica are amongst the lowest in Latin America, they are still high in comparison to other Organisation for Economic Cooperation and Development (OECD) states. In its defence, Sutel explained that fixed internet prices halved between 2009 and 2013, as tariffs have been driven down by competitive pressure. Nevertheless, Sutel said it is working on a new model to determine maximum prices, taking into account the impact of converging technologies and a number of other factors. The new model is expected to be in place by Q1 2015.