Costa Rica: The Other Side of Cell Phone Privatisation

Cellular stores have had reduced sales since the process of opening the telecommunications market started.

Monday, October 3, 2011

Retail businesses selling cell phones have experienced significant declines since the start of the privatisation process in the telecommunications sector.

The most commercial aggressiveness has been seen by the Instituto Costarricense de Electricidad (ICE) who are offering packages where the phone is free, and added to this is the entry of new competitors such as Claro and Movistar, which has affected traders dedicated to only selling the phones.

Some are arguing that these practices by the ICE are monopolistic, since the institution is able to offer free phones and retrieve the profit on the sale of airtime minutes.

For others, the solution for survival is to ally with companies such as Claro or Movistar, which, according to the same traders, have approached them with potential business offers.

An article by Cesar Quiros Brenes in notes that "’Surrendering’ to the phone companies is a solution also seen by Leonel Valencia, manager of four ABCelular stores in Perez Zeledon .

According to Valencia, monthly sales decreased by ¢30 million, so he is now considering becoming a broker for these companies who are now offering partnership deals. "

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