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 and US Seize 4.4 Tons of Cocaine in Pacific Operation

Costa Rican and U.S. authorities completed a joint maritime operation that led to the seizure of 4.4 tons of cocaine, dealing a substantial hit...

US Dollar Exchange Rate Hits Record Low in Costa Rica’s Monex Market

The U.S. dollar continued its slide against the colón yesterday, closing at ₡493.47 in the Monex market, marking the lowest level in nearly two...

Costa Rica Prepares the San Jose Airport for Future Passenger Use

Officials have outlined the Master Plan for our Juan Santamaría International Airport in San Jose through 2042, but details focus mainly on near-term work...

Five Things to Know About Honduras Ahead of the Elections

A president sent out of the country in his pajamas, another locked up in a U.S. prison for drug trafficking, deep turquoise waters that...

El Niño Causes Massive Coral Die-Off at Costa Rica’s Isla del Caño

Scientists report that the 2023-2024 El Niño event delivered a severe blow to coral reefs around Isla del Caño, one of Costa Rica's key...

Trump Endorsement Shakes up Honduras Presidential Race

The president of the United States, Donald Trump, has gotten directly involved in Honduras’s presidential elections by openly backing right-wing businessman Nasry Asfura, just...
L. Arias
L. Arias
Reporter | The Tico Times |
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