Costa Rica’s telecom regulator sanctions state-owned ICE for unfair competition

The Telecommunications Superintendency (SUTEL) on Thursday slapped the Costa Rican Electricity Institute (ICE) with a ₡2.2 billion ($4 million) fine for unfair competition carried out on two separate ocassions in 2011 and 2012.

The fine is equivalent to 0.58 percent of ICE’s mobile services brand kölbi’s gross income during the fiscal year prior to the anti-competitive practices, which SUTEL called “a very serious infringement.”

The investigation was prompted by a complaint filed in December 2011 by Spanish carrier Telefónica, which operates in Costa Rica as the brand Movistar.

SUTEL President Gilbert Camacho said “the ruling was issued in order to prevent commercial practices that can limit the market’s development in detriment of customers.”

ICE’s unfair practices consisted of rate discounts offered under a promotion called “Chip Extremo” aimed at attracting prepaid mobile phone users. The promotion was conducted twice in two years, first from November to December 2011, and then from October to November 2012.

The regulatory agency also ordered ICE to refrain from conducting promotions leading to negative returns, or to abuse its market-share leadership to affect competitors.

ICE officials denied engaging in anticompetitive practices. ICE’s telecommunications manager Jaime Palermo said that “given the complexity of SUTEL’s ruling, ICE is proceeding with a legal analysis to determine appropriate action. Once we finish the analysis of the more than 300-page ruling, we will state our position and the steps we will take on this issue.”

Costa Rica opened the mobile services market in 2011, as it previously was run exclusively by ICE.

ICE, under its brand name kölbi, leads Costa Rica’s mobile market with a 72 percent share, followed by Mexican carrier Claro with 13.6 percent, Movistar with 13.4 percent, and locals Tuyo Móvil and Full Móvil with less than 1 percent each.