Sutel recommends lifting pricing controls in several markets

10 Oct 2016

Costa Rican telecoms watchdog the Superintendency of Telecommunications (Superintendencia de Telecomunicaciones, Sutel) has opened a public consultation on its technical study of the nation’s telecommunications markets. The study analysed 15 of the 18 previously-defined markets with a view to assessing the level of competition and determining operators with significant market power (SMP). Sutel’s study proposed replacing the existing market definitions with eleven new ones, including six concerning wholesale services and five retail markets. Under these definitions, Sutel found that four markets were competitive, and recommended lifting its current tariff controls, namely: Telecommunications Traffic (Wholesale), International Roaming (Retail), Fixed Internet (Retail) and International Telephony (Retail). Controversially, the regulator found that the mobile sector was not competitive, noting that state-backed utility provider Grupo Instituto Costarricense de Electricidad (Grupo ICE) – which offers telecoms services under the Kolbi brand – had a market share of nearly 60% in 2015. Sutel’s decision focused primarily on the pre-paid segment, claiming that the space ‘has not achieved a strong competitive dynamic’. Nevertheless, Sutel has recommended that pricing controls on the post-paid segment be lifted, acknowledging that there was sufficient competitive pressure from the smaller two mobile network operators (MNOs), Movistar Costa Rica and Claro Costa Rica.

The watchdog has been under pressure in recent years for dragging its feet in removing its tariff controls, with operators complaining that the restrictions hamper their ability to introduce new services. Following the current public consultation, a final determination is expected to be published in November this year.