Competition in Costa Rica's recently liberalized mobile market will consolidate over the next three years to end up with a market share split of state-owned ICE having 40% and new entrants Movistar and Claro with 60% divided fairly evenly between them, Alexander Mora, president of ICT association Camtic, told BNamericas.
Claro, of América Móvil (NYSE: AMX), and Movistar, of Telefónica (NYSE: TEF), entered in November what was already a quite highly penetrated market. Since 2009, ICE has been introducing a series of new services such as the concept of prepay telephony, which previously did not exist in Costa Rica, to shore up strength ahead of facing tough new competition.
ICE also introduced 3G services and hip new handsets like the iPhone.
Mora estimates that as a result of ICE's efforts in the past two years, the level of mobile phone penetration has gone from around 50% to 90%, and it should reach 100% next year. Eventually, mobile should settle at a penetration rate of about 125%, in a market of some 6mn subscribers.
While ICE has recently concentrated a lot on value-added services, in anticipation of new competitors' focusing on that area, Mora said price is going to continue to be the differentiating factor for the next two or three years.
Regulator Sutel has said number portability is likely to be introduced mid-2012.
"For that reason, I think the temptation to change from one operator to another is going to be more limited because you have to change your number. When number portability arrives, there is going to be a greater incentive, so I think then price will play an even more important role," Mora said.
"Before, there were no bundles and packaged services. Now we're beginning to see bundles, and I think that price is going to continue to be the most important factor, although quality of service and coverage will also be important," he added.
There are also two MVNOs in Costa Rica - Full Móvil and TuYo Móvil - that buy airtime from ICE.