If you notice a grinning, orange advertisement popping up around Costa Rica, consider it the new face of the free market.
The first entrant into the newly opened Costa Rican cellphone market begins operation this week. Known as FullMóvil, and promoting its services with an orange smiley face with teeth resembling cellphone coverage bars, the small startup will be the first company in national history to compete against the Costa Rican Electricity Institute (ICE) for mobile phone users.
The announcement of FullMóvil’s launch in Costa Rica took many by surprise. For months conversation about new cellphone companies focused on giants América Móvil (Claro) and Telefónica (Azules y Blancos). Though ICE’s telecommunications monopoly opened when the Central American Free-Trade Agreement with the U.S. (CAFTA) came into effect on Jan. 1, 2009, nearly three years later, ICE remains the only national provider.
To circumvent the bureaucracy and infrastructure disputes impeding the entrance of other providers, FullMóvil took a different approach. Instead of being a traditional brick-and-mortar operation, FullMóvil is a virtual operator.
“We will offer cellular service that will be managed entirely through our website. There will be no physical locations, no waiting in lines, and everything can be handled online or by calling our call center,” said Sebastian Haedo, the company’s general manager. “We are trying to corner a niche market and hope to do so by offering a network that is easily accessible, flexible and with a better pricing strategy than our competitors.”
FullMóvil is known in the telecommunications world as a mobile virtual network operator, or MVNO. An MVNO is a cellular service provider just like its competitors, though without its own infrastructure. MVNOs do not construct their own cellular towers and instead use the antennas or infrastructure of an already existing company, such as ICE in the case of FullMóvil. Though the antennas are shared, the two companies operate entirely separate networks.
In the last 15 years, MVNOs have set up operations in many countries with varying results. The most successful MVNO, according to Haedo, is Virgin Mobile U.K. Using T-Mobile’s antennas and infrastructure, Virgin began offering cellphone service from its virtual online location in 1999. Within a few years, Virgin vaulted ahead of T-Mobile and became one of the most prominent providers in the U.K.
Few MVNOs experience similar successes. While there are about 650 virtual cellphone providers in the world, several have entered and exited markets without making so much as a peep.
Haedo and FullMóvil are confident they can carve out a niche in Costa Rica, particularly among younger users. FullMóvil offers only pre-paid plans, with more than 500 national activation points and 10,000 recharge locations. Management of each account is handled entirely online and service questions are routed to a call center of 125 FullMóvil employees. If users want to design their own telephone number, FullMóvil gives customers the option to choose the last six digits.
FullMóvil is a Costa Rican company that aims to be a “Tico operator for Tico customers.” ICE, which has operated in Costa Rica since 1949, also stakes that claim.
If FullMóvil is using ICE’s antennas, what’s the difference in service?
“We offer a completely different network and have entirely different operations than ICE. All of the systems we use were designed by our staff and are our property,” Haedo said.
To differentiate from ICE, as well as rivals Claro and Telefónica, Haedo said pricing will be vital to FullMóvil’s success. He claims that FullMóvil will offer some of the best and most competitive prices for calls, text messages and Internet access.
“We are going to be competing with a company that already has 100 percent market share and two other large multinational corporations,” Haedo said. “But if we can offer better service and better prices than them, we’re confident we can find a niche.”