OECD sees several digital transformation challenges facing Costa Rica

Costa Rica is lagging behind several other Latin American countries in fixed broadband penetration and 5G implementation, which are factors preventing faster digital transformation, according to the OECD. 

“Regulatory barriers on e-communications are relatively high in Costa Rica. Excessive and sometimes inconsistent regulations across public institutions also hinders infrastructure deployment. Heterogeneous regulations at municipal level are a particular concern”, the Paris-based organization said in a report on the country’s economy. 

Costa Rica recently published a law to facilitate telecom infrastructure deployment and enable the use of public spaces for such infrastructure. 

Expanding access to fixed broadband, which stands at about 34 subscriptions per 100 inhabitants, should be a priority, according to OECD. 

While mobile service prices are “significantly lower than in regional peers and at par with the OECD average in terms of affordability”, fixed broadband remains significantly above, it said.

OECD highlighted that Costa Ricans need nearly 15% of their monthly income to pay for a fixed broadband connection compared to only 2% in the case of mobile broadband. 

The country’s 2027 telecom development plan sets out several connectivity goals, including increasing internet access and speeds. 

Fixed broadband accesses totaled 1.05mn at the end of 2021, according to latest data from sector regulator Sutel. 

State-owned telecom operator ICE commanded 29.8% of the fixed segment, followed by Cabletica (now Liberty) with 23.5%, Telecable (19.9%) and Millicom (18.6%).

5G

The development plan also includes plans for a 5G auction, and the government recently launched a public consultation for a process that may include recovering unused frequencies by ICE.

OECD said Costa Rica “should accelerate the release of the 5G spectrum” as it lags behind several other Latin American countries. 

“The deployment of 5G services would still take at least three years. Setting a transparent and robust concession process will be critical for an effective deployment and a competitive market,” it added.

There were 4.5mn mobile internet accesses at end-2021, with Liberty leading the prepaid segment with 43.9%, followed by ICE (40.4%) and Claro (15.7%). In the postpaid segment, ICE was the leader with 38.3% and the second and third places were occupied by Liberty (32.2%) and Claro (29.5%), respectively.