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In Costa Rica, in the second half of 2009, when the Triple Play technology allows the acquisition of telephone, television and broadband Internet services from the same company, the consumer’s decision will be who to choose.
If you are not inclined toward the Costa Rican Electricity Institute (ICE by its initials in Spanish), by acquiring a package from private competitor, it is likely that you will cancel your fixed telephone service contract with the state entity, as you would have such service over the network.
Although conventional landline services were not opened to competition with the opening of the telecommunications market which is part of the Central American Free Trade Agreement with the United States (CAFTA), it is clear that through Triple Play that monopoly will also be threatened.
The technology to transmit voice over the Internet has been purged so much that it will compete on equal footing with traditional analog service, so the ICE is prepared to face its rivals from the private sector with a strategy of “fire against fire.”
This will first be attempted by launching its own version of Triple Play, so that consumers who are eager for a more sophisticated service through a single company can obtain it through the State entity.
Indeed, initially it would be a great opportunity for the ICE to open the service in Costa Rica because it will be resolving the bidding process in a few days. There are at least four companies interested in supporting the implementation of this technology, the Chinese companies ZTE and Huawei, the Venezuelan company Desca and the Costa Rican company STI.
That is not all. To implement this project, it is necessary to ensure that customers have the proper high-speed connectivity. The ICE’s Telecom section is working in that area, on projects such as expanding the access network to connect residential and business customers with faster access technology, which consists of nearly 179,984 ports, detailed Claudio Bermudez, ICE deputy manager.
It is also working on the extension of WiMax (wireless Internet coverage of up to 20 kilometers) for some 37 thousand additional connections and fiber optic projects for homes and businesses to be carried out through partnerships with companies in electricity distribution such as the Electric Services Administrative Board of Cartago (Jasec by its initials in Spanish), the Public Services Company of Heredia and others.
In fact, since last November 25 the ICE and Jasec signed a business alliance for the joint development of Triple Play. The institutions have committed to having transport and access networks, as well as content and applications. “The delivery service is expected to begin in the second half of 2009,” Bermúdez explained.
Once all the roads are cleared for the start of the opening of telecommunications during second half of this year, the private sector would come in and compete with the ICE. For now the focus is on seeing who offers the triple service first.
In a competitive environment, cable TV companies appear to be strong providers of Triple Play technology because they already have the networks that enable the function.
In Costa Rica, Amnet is one of the companies that comes to mind as one of the most powerful, not only because their networks are already spread throughout Costa Rica, both to provide access to television and cyberspace, “but also because it was absorbed by a multinational of Millicom’s caliber, experienced in leading edge technology and customer service,” said Enrique Messeguer, an expert in telecommunications.
For now, as long as the market is not definitely open, since there are still some regulatory issues left to polish, the ICE’s potential rivals are silent. At Amnet, they indicate that at the moment they are only carriers of the Radiográfica Costarricense SA (RACSA by its initials in Spanish, a member of the ICE Group which together with this additional service) signal, so they are not addressing the issue.
”As for the chances of the opening the telecom sector, we are exploring the possibilities,” was the simple reply of Manuel Mendez, chief financial administrator at Amnet, while at Cabletica manager Jorge Garro did not respond.
However, it is estimated that private companies will begin to operate in Costa Rica beginning in June, because there are still some technical and legislative adjustments that need to be done, such as the consolidation of the Superintendent of Telecommunications which will regulate the industry and market rules.
Among the factors that must be analyzed is interconnection. For example, we have to wait and see the amount that the ICE is going to charge to allow their “competitors” to communicate with telephones belonging to the state network which “initially may be high,” said Ricardo Trujillo, an expert in telecommunications.
”I believe that at least during the first two years of the opening of the market, those who acquire private Triple Play will maintain conventional fixed service to call other users of the ICE network, but they will drop it after that as has happened elsewhere, and that is when the contracts for regular fixed telephone services will be cancelled,” he added.
In the beginning the market will be fighting for corporate and residential sectors of the middle class upwards.
In Costa Rica, only 28.6% of households have cable TV, so far this has been a portion exclusively of the private sector, while 11.8% state has state Internet services, according to data from the National Institute of Statistics and Censuses ( INEC by its initials in Spanish).
Currently the “war” is against time, because in telecommunications “whoever enters the market first has the advantage,” concluded Alexander Mora, president of the Costa Rican Chamber of Information and Communication Technology (Camtic by its initials in Spanish).
The team at TicosLand.com sees this possibility as a great opportunity for everyone in the country. There are certainly many technological options for communication and the services are not known or offered in Costa Rica because the ICE simply does not make them available.
What is expected is that as the ICE is faced with competition, the services will be improved and there will be more available and of better quality, benefiting not only the consumers but the country in general.
You can read much more about Costa Rica and TicosLand.com in our internal blogs and forums.
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