The tech race is on for smart phones in Costa Rica - Will ICE loose?
Last week (Feb 21th) something unspeakable in this day of age happened, around 800,000 Costa Rican’s cell phone users suddenly found themselves without service.
And at the same time we received a landslide of emails wondering, if this could be the beginning of the end for Instituto Costaricense de Electricidad (ICE)?
An interesting question.
ICE has been under threat since the signing (Jan.2009) of Central American Free-Trade Agreement (CAFTA) when they suddenly found themselves in a competitive world of the telecom market; something they knew little about and not prepared for. ICE for 50 years never had to construct any promotional and marketing strategies. Fact remained, anyone who’s ever wanted a cell phone in Costa Rica had to go through ICE’s neverending playing slot machine; a monopoly that is in jeopardy.
After a ton of paperwork, some major setbacks, two large foreign and multinational mobile phone providers, America Movil and Telefonica, prepare to offer cellphone service to Costa Rican customers and most important, with advance technology.
The two have a ton of capital (America Movil plans to invest $77 million on its expansion here, and Telefonica committed $95 million), whose intentions is to leave ICE in left field with its advanced technology, a major selling point. This is something that ICE can’t (as of this date) offer to their customers who are craving the higher technology.
Will ICE change to meet the demand of the ongoing technology to keep their current and draw more customers?
Both companies have agreements with Apple and can immediately begin selling the popular iPhone. Currently, the only way to get an iPhone is to buy it either on the blackmarket and/or abroad. On a recent trip, I had a meeting with a few clients and one had arrived the night before with 20 iPhones. He knew the demand of smart phones, and already had 12 sold.
Last April, Apple co-founder and CEO Steve Jobs reported that more than 50 million iPhones had been sold worldwide and even if Costa Rica may not be a prime target, it is obvious Apple has Costa Rica in their business plan and they are preparing to open up a few more Apple – Mac service centers. Obviously the blackmarket has already seen the value of smart phones, something that ICE has always avoided to a very hot and demanding market for the tech-savy younger generation who thrive on the smart phone ability to run many applications beside sending/receiving text messages.
The ability to download music, have GPS, play games, video, digital cameras, social media applications, the list is endless to those Costa Rican’s who want to keep up with the rest of the world.
According to Juan Manuel Campos, a lawyer with Ciber-Regulacion Consultores, a firm that specializes in telecommunications law, said, “There is a possibility that ICE could lose 30 to 40 percent of its users in the first year of competition,” adding, “In order to protect the amount of users they have, they must improve the quality of service and applications that they currently offer. If not, they could see a massive abandonment of users”
ICE may be a bit slow, but in the past months, ICE has geared up their marketing staff to launch several a marketing campaigns to reassure Costa Rican that the company is on a mission to remain “a tu lado” (by your side).
One of ICE’s first major promotional plan was giving away tickets to events at the new National Stadium that opened in March, 2010. ICE hyped, if you purchased a new cell phone plan through Kolbi, ICE’s cellphone service we will give you tickets to events like, the Shakira concert and top soccer games like the ones against Argentina or China.
However, if ICE’s service continues like it did last week – we expect to see ICE loose the “a tu lado” on this technology race.
Related articles, Cell Phone Service in Costa Rica
ICE really is a nightmare for all customers in Costa Rica. No Service, no competitive, hours-long waits in the offices.