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

Messi, Inter Miami agree to extend contract beyond 2026: source

Inter Miami and Lionel Messi have agreed to extend the Argentine superstar's contract to remain in Major League Soccer (MLS) beyond next year's World...

Costa Rica Plummets in FIFA Rankings Amid World Cup Qualifier Struggles

The Costa Rican national soccer team is facing a pivotal crisis, confirmed by the latest FIFA rankings published today. La Sele fell seven spots,...

El Salvador Faces Fastest Democratic Decline in Latin America

El Salvador is the country in Latin America and the Caribbean facing the “fastest deterioration” of democracy in recent years, according to a report...

Estée Lauder Opens Skin Longevity Institute in Costa Rica’s Blue Zone

Estée Lauder launched its Skin Longevity Institute at Hacienda AltaGracia, an Auberge Resorts Collection property in Costa Rica, back in May. The spot sits...

Costa Rica’s Central Bank Defends Exchange Rate Strategy

The exchange rate has been an important topic during the administration of President Rodrigo Chaves. The strong appreciation of the Costa Rican currency has...

St Regis Papagayo Resort Breaks Ground in Costa Rica Guanacaste

Developers broke ground this week on the St. Regis Papagayo Resort, the luxury brand's first spot in Costa Rica. Solana leads the project on...
L. Arias
L. Arias
Reporter | The Tico Times |
spot_img
Costa Rica Coffee Maker Chorreador
Costa Rica Coffee Maker Chorreador
Costa Rica Travel Insurance
Costa Rica Rocking Chait
Costa Rica Travel

Latest News from Costa Rica