In a "Solomonic" decision, the Ministry of Finance has decided to settle the dispute between CompraRed and Merlink, ordering the development of a new platform, giving the moribund state telecom company RACSA something to do.
The market was declared dead several years ago, but the government of Costa Rica has been keeping it alive artificially at the expense of taxpayers purses.
Editorial
Radiographic Costarricense (RACSA), is a subsidiary of the state-owned Instituto Costarricense de Electricidad (ICE), the major player in the telecommunications industry in Costa Rica, even after the market opened in 2010. The ICE is, in turn, a direct competitor of RACSA, which in recent years has accumulated tens of millions of dollars in losses, while at the same time losing the market share it once had. 2014 losses were estimated at $5 million.
The Instituto Costarricense de Electricidad has said that it plans to build a six-story building on land it owns in order to reduce current spending on renting offices.
From a statement issued by the Costa Rican Electricity Institute (ICE):
The Instituto Costarricense de Electricidad (ICE) plans to build a building which would house, in 2016, 610 members of staff currently located in ten different sites rented by the company in the greater metropolitan area.
The state run company RACSA -which is experiencing serious financial difficulties- has acquired a virtual mobile phone operator that was " about to close".
The state run company Radiográfica Costarricense (ICE) has bought Fullmóvil, the virtual operator that sells prepaid phone services, reported the Telecommunications (Sutel).
An article in Crhoy.com reports that "Ana Victoria Velasquez, of the Committee on the Promotion of Competition, which was consulted on this acquisition, said that because it is a virtual operator which was about to close, the commission saw no problem in approving the purchase, but the last word went to the Sutel. "
There are five projects in Costa Rica attempting to set up truly fast internet networks, and all of them are hampered by bureaucracy.
An editorial in Elfinancierocr.com explains that in Costa Rica "the five projects designed to bring high speed internet to businesses and homes are stuck."
In order to put into operation speed cameras on the highways, RACSA has requested $5,500 a month for each of the 90 cameras to be installed.
This would mean that every month the Road Safety Council (Cosevi) would have to pay $495,000, not to mention that in December it has to install 150 cameras, meaning it will need $825,000 per month for the monitoring system to work.
Five years after the fall of the monopoly, there are more companies, more users and a greater array of services on offer, with growth of 45% in the sector's contribution to GDP.
According to data reported by telecommunications companies to the Superintendency of Telecommunications (Sutel), the sector's contribution to the economy has grown by 45% over the past five years. In 2012, these companies reported gross income which exceeded $1.315 billion, equivalent to 3.3% of GDP.
The multitude of paperwork and the Fondo Nacional de Telecomunicaciones are the obstacles preventing major progress in implementing fast internet services in Costa Rica.
"There is a significant increase (according to preliminary reports) in the number of broadbandinternet connections. This is despite the fact that there have been delays in major projects for the country and which could make us progress faster," said Rowland Espinoza, Deputy Minister of Telecommunications.
The term "white elephant" is used for possessions whose costs are greater than the benefits they bring, or those which, benefiting others, only cause the owner problems.
Radiographic Costarricense (RACSA) is a subsidiary of the state energy and communications company in Costa Rica, the Instituto Costarricense de Electricidad (ICE).
A new loan from the Instituto Costarricense de Electricidad will allow its subsidiary Racsa to stay afloat despite its finances continuing to deteriorate.
This is how things are reflected in its assets, which decreased between 28% and 29% over a period of one year, from October 2011 to October 2012.
Racsa (Radiographic Costarricense) will close in the red, although with slightly better figures than expected.
If the announcements made become a reality, there will be two fiber optic networks providing households with access to broadband digital services, with a subsidiary competing with its parent company.
An article in Elfinancierocr.com reports on the characteristics of both projects:
The state run company RACSA has signed a contract with the Swedish company Vía Europa in order to provide optical fiber multiservices, including very high-speed Internet.
Under the agreement, the company Vía Europa will construct, operate and maintain the infrastructure for a fiber optic network and manage the services market.
Along with two other private sector competitors, the state run Costa Rican Institute of Electricity intends to buy Cable Vision.
The state-owned Instituto Costarricense de Electricidad (ICE) aims to break into the business of cable television and is bidding for the company Cablevision.
The president of Costa Rica Laura Chinchilla is meeting with representatives from the Swedish company that designed an open network that would bring high-speed connections to Costa Rican homes.
After the state run company Radiographic Costarricense (RACSA), a subsidiary of Grupo Instituto Costarricense de Electricidad (ICE), rejected the project, despite recognizing the benefits it would bring to the general population, arguing that "it was not good business for the group ", the theme is being taken up by the aforementioned president, who has apparently questioned the decision to abandon the project.
Corporatism in Latin American state institutions, especially those dedicated to the production of goods or services, means that its officials are losing sight of the sole reason for their existence, which is to serve the interests of the country and its citizens.
In Costa Rica a public company has rejected a proposal for a fiber optic network project recognizing that "it serves the country, but is not good business for the company."
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