ICE, A Company In Change, But Sticks With Same Restrictive Policies For Cellular Services

January 15, 2010

For more than a decade Costa Ricans and foreigners living and visiting Costa Rica have had to accept the decisions of the Instituto Costarricense de Electricidad (ICE) with respect to cellular telephone service, with poor service, no coverage in many areas and the banalities of a state institution of dictates who can and who cannot subscribe to their cellular service.

For decades ICE had the monopoly on telecommunications. But that all changed at the end of 2008 with the passing of the Ley General de Telecommunicaciones, which allows the opening of the telecom sector and breaks the decades old ICE monopoly.

But what has really changed? Let’s take a look.

Improving on the TDMA  technology that was first in use in Costa Rica, ICE moved to GSM. But, as with the TDMA, service was spotty, especially in rural areas and there was always a lack of sufficient lines to meet the demand, causing long lines ups at ICE offices when lines were made available.

The ICE policy also created black market for foreigners and visitors who wanted to get connected, since only citizens and “legal” residents could subscribe to cellular service, a policy that was instituted quickly after the introduction of the first cellular service in the late 90’s.

Today, that policy continues, even tough the technology has changed, like the ability to offer pre-paid cellular service and the fact that ICE now has more than sufficient lines to meet the demand.

According to Jaime Palermo, director of División de Clientes, ICE will soon make available for pre-paid cellular service with the GSM lines customers are trading in for the 3G.

Palermo says that 110.000 GSM customers have already switched over, the majority of clients who had “high end” phones and wanted to take advantage of services like the transmission of data (internet over the cellular network).

However, that news does not really change anything for foreigners or visitors, as ICE continues to maintain the “residency” policy in effect, a policy that even extends to subscribing only to the cellular internet service, a service that uses a USB stick to connect a computer to the 3G network.

Although ICE now has hundreds of thousands of lines of the 3G network available and will soon free up 300.000 lines of the GSM network, foreigners living in Costa Rica and those just visiting cannot obtain any type of cellular service.

That policy even extends to those foreigners who obtained their cellular service before ICE instituted the residency policy, where they can transfer their TDMA service to the 3G, but cannot obtain any new additional services.

And it gets worse for those subscribers, as ICE will not be returning the difference of the deposit, not yet anyways.

Let me explain.

With the subscription to TDMA service, ICE required a deposit of ¢60.000 colones (us$260 dollars when the exchange rate was ¢225 colones to a dollar). Now it only requires a ¢12.500 deposit (us$22).

Transferring TDMA customers could get a refund or credit on the difference or the entire deposit back if they cancelled their service entirely. But, that is not happening just yet, as ICE says it does not have the ability to issue those refunds or credits just yet. “Maybe in February”, said Palermo.

For those who already took out their calculator will notice that the refund is some us$210 short. Now, multiply that by hundreds of thousands of customers who are subscribed to the TDMA.

How is that? Well, when ICE was asking for ¢60.000 colones, the exchange rate was around ¢225 colones per one US dollar.

Now, the exchange rate is hovering at ¢570 colones per one us dollar, which means ¢47.500 colones is only us$83 and not us$210 when the deposit was paid.

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