The cutting edge of telecommunications can be found in a little room off a grimy street in the eastern suburb of San Pedro, where a telephone sits on a shelf in a cubicle. It looks like a normal phone, but a conversation using this phone doesn’t get transmitted over phone lines.
Instead, the conversation goes to a special receiver, where it gets broken up into data packets and transmitted over the Internet using something called the Voice over Internet Protocol (VoIP).
The data packets can be directed to a computer, a telephone or even a cell phone anywhere in the world, using the same data stream used for e-mail and Web browsing. Essentially, it’s a phone call over the Internet.
Sound complicated? A price sheet on the cubical wall takes it down to brass tacks: United States, 70 colones ($0.13); Colombia, 85 colones ($0.16); Germany, 95 colones ($0.18).
“It’s much, much cheaper,” said Graford Jay-Pang, the owner of this particular little room.
Conversations using VoIP technology pass through the Internet just like any other bits of data – and that means no long-distance or international charges from a phone company.
At the same time, it’s not a bad way to make a buck: Jay-Pang says his Internet café gets roughly 35% of its business by offering VoIP calls.
VoIP telephony is just one way Costa Ricans and foreigners here are using technology to make an end run around the traditional communication options offered by the country’s state-controlled telecom monopoly, the Costa Rican Electricity Institute (ICE).
Thanks to high international calling rates and wait times for phone lines and Internet connections that can last years, thousands of residents and businesses in the country have turned to satellite connections and VoIP technology to cut costs, simplify communications or fill holes left by spotty ICE coverage.
VoIP Goes Primetime
It’s not the first time Costa Rican residents and businesses have tried to duck ICE fees.
In the late 1990s, a popular way of doing this was “callback” services – services that, after a one-minute phone call from Costa Rica, would call customers back and allow them to dial numbers and make international calls at lower U.S. rates, without paying anything in Costa Rica.
VoIP technology was invented around that same time, but it wasn’t until around 2001 that it was fine-tuned to the point of being marketable.
Since then, the most visible Costa Rican businesses to take advantage of the technology for getting around ICE prices and bureaucracy have been Internet cafés like the one owned by Jay-Pang, a Colombian transplant.
At least a half-dozen similar Internet call centers can be found along the so-called Calle de la Amargura (or “Street of Bitterness”) near the University of Costa Rica (UCR) in the western suburb of San Pedro. Likewise, Internet call centers are common in beach towns frequented by tourists.
The Internet cafés buy bulk talk time from VoIP providers outside the country and then send the calls over the high-speed Internet connections they use for their regular Internet customers, usually via satellite, cable or broadband.
The VoIP providers on the other end connect the calls from the Internet back into the phone system, a service whose cost varies depending on the country.
Invariably, the calls come out much cheaper than regular ICE rates. For example, international calls to the United States using an ICE line cost $0.27 a minute; with an international call center using VoIP, they cost about $0.15 a minute.
Of course, those calls are even cheaper with your own VoIP line, and it didn’t take long for Costa Rican businesses to figure this out, especially businesses that do a lot of international calling.
Many service providers have sprung up in Costa Rica to offer VoIP equipment and support to businesses and individuals who want to cut costs with their own VoIP calling.
For example, Nextprods, based in the western suburb of Escazú, has been in business since 2002 and set up VoIP networks for 600 customers. Some of them are individual clients, but many others are businesses, including call centers, multinational companies and hotels.
“It impresses me a lot because the companies that were spending ¢1 million ($1,933) a month are now paying ¢200,000 ($386),” said Sal Araya, the owner of the company.
One of Nextprods’s clients, the Hotel Club del Mar on the central Pacific coast, has VoIP lines set up to all of its 22 condos and 10 hotel rooms, and hotel manager Jeanette Reid said the hotel’s patrons can make international calls for “cents.”
Another VoIP company, Ticom, has set up private networks and VoIP telephony for tourist agencies, sportsbooks, call centers and security agencies. Owner Jorge Antillón calls VoIP a “new solution for the old problem” of telecom regulation.
SC Riesgo S.A., a financial risk-assessment company that has been in Costa Rica for 10 years, is preparing to switch to VoIP telephony as it expands its business into the rest of Central America.
“Conventional telephone is very expensive,” said SC Riesgo General Director Gary Barquero, noting that when the company finishes building its new headquarters in Cartago, east of San José, it will have 48 VoIP lines.
Going Where ICE Isn’t
Most VoIP telephony users in Costa Rica turn to the technology for price savings on international calls, using existing high-speed DSL or cable Internet connections offered by ICE and its subsidiary Radiográfica Costarricense S.A. (RACSA).
But what if the service doesn’t exist? That’s what graphic designer Alberto Zevallos had to face when he moved to the no-man’s-land between Montezuma and Cabuya on the tip of the Pacific-coastNicoyaPeninsula.
Sure, RACSA offered Internet connections – but at tortoise-slow speeds.
“I have to move big files and usually I’m working with very close deadlines,” said Zevallos, who does most of his work for international clients. “I can’t take the luxury of waiting all night for a file to upload.”
The solution to his problem was circling miles above the planet: A satellite. Zevallos hooked up with Ticosat, a subsidiary of VSAT Systems in Ohio, which offered to provide him with a blazing-fast Internet connection via a Lorel Space Systems telecommunications satellite.
The equipment wasn’t cheap. The special satellite dish that can both receive and send signals – plus a special modem – cost him $2,500, plus the $500 installation fee.
Monthly costs can vary depending on the speed of the connection, and Zevallos said he pays $250 a month, although that’s for relatively high speed and a high data transmission limit. Rates go as low as $99.
Ticosat owner Don Jacobs said the service obviously isn’t for everyone, but he gets a lot of business from foreigners like Zevallos who live in remote areas not serviced by ICE and need a reliable connection to the outside world for business purposes.
Jacobs said the satellite connection is also optimized for VoIP, so most of his customers also use it as their telephone service as well. Some of his customers – call centers especially – buy the satellite Internet link exclusively for VoIP purposes to get around the headaches of ICE bureaucracy altogether.