No menu items!

COSTA RICA'S LEADING ENGLISH LANGUAGE NEWSPAPER

HomeTopicsBusinessCosta Rican Electricity Institute appeals ₡2 billion fine by regulators

Costa Rican Electricity Institute appeals ₡2 billion fine by regulators

The Costa Rican Electricity Institute (ICE) is challenging a ₡2.2 billion ($4 million) fine levied by the Telecommunications Superintendency (SUTEL) for unfair competition involving discounted offers for ICE phone service.

SUTEL sanctioned ICE alleging the carrier carried out anti-competitive practices in 2011 and 2012 that affected its new competitors Movistar and Claro. The investigation was prompted by a complaint filed by Spanish telecom Telefónica, which operates in Costa Rica as the brand Movistar.

The regulatory agency alleges that 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.

ICE’s appeal calls the SUTEL action illegal, inconsistent and flawed due to a “lack of proof and evidence to justify the sanction.” It also argues that ICE’s promotions did not cause any of its competitors to exit the market or block entry to new competitors.

On Wednesday, ICE Telecommunications Manager Jaime Palermo said “SUTEL itself has recognized that the mobile telecommunications’ market is vulnerable to competitive practices from all carriers, as all of them sell below operating costs.” He added that, “even Telefónica has reached the same conclusion.”

The appeal also states that Telefónica filed the complaint with SUTEL only 15 days after launching operations in Costa Rica as a measure to prevent ICE from conducting its promotions.

“During the investigated period this carrier managed to increase its market share and even conducted more aggressive promotions than those from ICE, and yet only ICE was sanctioned,” Palermo said in a public statement.

SUTEL’s council will analyze ICE’s appeal, and in the case that the resolution does not favor the state-owned company, ICE has the right to proceed with a challenge in court.

The regulatory agency last month announced that in coming weeks it will conduct a study to determine which markets have the apropriate conditions to be open for competition. Such a resolution would mean that each carrier would be free to set rates.

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.

Trending Now

Costa Rica Joins Global Lunar New Year Observances With Community Festivities

The Chinese community in Costa Rica marked the approach of the Lunar New Year with a public celebration on February 14 in the Barrio...

Costa Rica Leaders Head to Trump Summit for Security Boost

President Rodrigo Chaves and President-elect Laura Fernández plan to attend a high-level summit in Florida next month, hosted by U.S. President Donald Trump. The...

Restoration of Costa Rica’s Teatro Nacional Paused Amid Claims of Irreparable Harm

Work on restoring the Teatro Nacional, Costa Rica's premier cultural landmark, came to a sudden stop this week after the Sala Constitucional issued a...

Guatemala’s president says state of siege brought gangs under control

Guatemalan President Bernardo Arévalo said Sunday that the 30-day state of siege helped authorities regain control over gang activity after Barrio 18 members killed...

Procomer Opens New Office in Silicon Valley to Draw Tech Investments

Costa Rica's export promotion agency, Procomer, opened an investment promotion office in Silicon Valley on February 17. The move targets foreign direct investment from...

The ATP’s South American swing is trying to survive Saudi money

With the certainty that Saudi Arabia will have a Masters 1000 in February starting in 2028, the tournaments on South America’s clay-court swing are...
L. Arias
L. Arias
Reporter | The Tico Times |
Costa Rica Coffee Maker Chorreador
Costa Rica Coffee Maker Chorreador
Costa Rica Travel Insurance
Costa Rica Travel

Latest News from Costa Rica