The Arenal Area Magazine

Municipalities In Costa Rica To Cash In On Opening Of Mobile Telecommunications Market

Municipalities in Costa Rica are looking to cash in on the opening of the telecommunications market by charging operators a tax or license fee to erect and maintain radio towers. This would be the first time that municipalities would be allowed some control on the location of the radio base towers and a new source of revenue.

The change comes with the move forward in the opening of Costa Rica’s mobile telecommunications market with the expected three new operators to be approved to operate separate cellular networks later this year.

In addition to the license fee, mobile operators will also have to pay for building permits to erect the towers.

The tax or license fee would also apply to the Instituto Costarricense de Electricidad (ICE) – the state telecom – that currently has more than 1.100 towers and without paying a “colon” to any municipality.

The Superintendencia de Telecomunicaciones (Sutel) will begin the bidding process for three operators in addition to ICE later this month and it will be up to the Sutel to allow or not allow municipalities to charge for the towers.

Of course, the cost of any tax, license fee and/or permit will be end up being passed on to the end user, which will undoubtedly increase cellular telephone costs in Costa Rica.

Compared to most other countries, Costa Rica’s cellular use is inexpensive.

The basic rate for a TDMA, GSM or 3G line is ¢4.000 colones or us$8 per month that includes 60 minutes of call time (no charge is made for incoming calls). Additional minutes run as high as ¢35 colones at peak times, much less evenings and weekends. And, users of 3G data services pay a maximum of ¢15.000 colones or us$30 per month for the maximum connection speed and unlimited data transfer. Those costs are pale compared to US and Canada and other Latin countries where the same service runs to us$75 or more per month.

The initiative is part of the proposal by the Federación Metropolitana de Municipalidades de San José (Femetrom) that brings together the Central Government and more than 35 local municipalities.

The president of Femetrom and mayor of Montes de Oca (San Pedro), Fernando Trejos, says that municipalities are within their right to charge for the radio towers, as this is a “commercial” activity for the operators.

Some of the private operators do not see a problem with paying a tax or license fee for the towers. But, that may be another thing with ICE.

A meeting later this month is scheduled for talks on the subject with ICE president, Eduardo Doryan.

The Sutel has yet to define how many radio towers will be required and it will required companies to share towers. George Miley, president of the Sutel, says that 90% of the towers could be shared by the various operators.

Miley added that the majority of those companies interested in setting up shop in Costa Rica have expressed an interest in sharing with their competitors.

If that were to be case, experts conclude that some 2.000 towers are needed or 900 more than what ICE has already installed to fully cover the country.


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