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Costa Rica connected

Interview - October 7, 2014

The United World team met with Jorge Abadia Pozuelo, Country Director of Movistar Costa Rica, to discuss the telecommunications sector in the Central American nation and, specifically, Movistar’s situation. He explained the most important measures taken since his arrival in the country, his strengths and weaknesses and the strategies for the future. He describes what has been achieved and the obstacles the company must overcome to maintain development. Lastly, he gave us his point of view on how telecommunications directly impact the country’s economic and social growth.



Costa Rica is going through a historic change. The new government is betting on social development with economic drive. What possibilities will open up for the telecommunications sector in this new environment?
Telecommunications is the engine of the economies, where we offer our services. We have seen many countries develop, in part, thanks to telecommunications. There are empirical studies that show that a 10 percentage point increase in the penetration of broadband equals a 0.2 percent growth of GDP.

In Costa Rica, the number of clients has multiplied by six. Thanks to the opening of the telecommunications sector, broadband penetration has gone from 11 percent to 75 percent. Therefore, it is obvious that the opening has had an impact on the country’s economy, because there used to be many sectors and citizens that couldn’t access mobile telecommunications services.

As part of his program, President Solís invites foreign investment mainly to participate in sectors that develop cutting-edge technology. How does Movistar fit into that profile?

It fits perfectly. One of the decisions we applauded at the time and still applaud was that Costa Rica decided to assign the totality of the money it obtained from opening the telecommunications sector to the reduction of the digital gap. It is the only government that I know that has taken such a decision. The process with FONATEL started out slowly, but we are already seeing results and we are reaching areas and communities that never imagined they would have this service. Also, with the intensive use of data and the high penetration of smartphones, Costa Rica is positioning itself at the vanguard of telecommunications. It is a very positive point for the development of information and communications technologies. 

What is the potential of investing in broadband in Costa Rica?

The greatest potential is mobile broadband. It is the most efficient and cheap solution we can offer a client. We are betting strongly on this approach; we are a company mostly centered in data. Our pillars are: the best network, the best Internet, the best customer service and being innovative in products and services. It's all related to the world of data, and mostly if we think of LTE, the fourth generation, which we launched this past July.

Nonetheless, we have a sustainable regulatory system, unlimited in postpaid plans, which can lead to a situation in which Costa Rica dies of its own success, because the existing resources, like the spectrum and infrastructure, aren’t infinite. The operators, like the regulator, advocate a flexible model with the introduction of payment upon download in postpaid plans therefore giving the clients more options, as is the situation in the rest of the countries of the five continents. That same preoccupation existed a year ago, when payment upon download was implemented for prepaid plans and, far from increasing the digital gap, as many thought, the use of broadband has become more democratic because there are many more people today who have access to it thanks to the existence of plans limited by time, download volume or access to pages. In the next six months, after the introduction of the payment upon download plan, our clients increased by 40 percent. 

Is that change being asked for?

Yes. It was requested some time ago. In fact, there was an audience established for July 1 but, for the moment, it hasn’t prospered. The lack of flexibility in postpaid plans is one of the things that could condition the future of telecommunications in Costa Rica. 

Movistar entered Costa Rica in November of 2011 and it has been gaining space in the market. What share of the market do you have today? What is the company’s growth objective? 

Right now we are Costa Rica’s second operator, with a 20 percent market share of real clients. And we have continued to grow each day since our launch. Regarding our objectives, in the middle to long terms, in all countries the shares tend to balance out between the different operator and we are convinced the same will happen in Costa Rica. 

What tools does Movistar use to compete in that market? 

We have been and continue to be very consistent in our distinguishing factors: the best network and the best client service (for example, by actively using social networks) with a simple and transparent offer for our clients and always looking for innovation, as the launch of the LTE demonstrates. 

Are you in conversation with the municipalities that are blocking the deployment of the telecommunications companies?

It’s one of our main problems: the development and deployment of our network. We understand the opening of mobile phone sector and our entry into Costa Rica as a part of the country’s project, which should be above the particularities of some municipalities. We need to guarantee the evolution of our network, mainly because we need to guarantee the best experience for our clients and we have to fulfill the obligations of our concession contract. But the truth is the decision isn’t up to the executive, but to the 81 municipalities. The answer has changed in each one. There has been a positive evolution thanks to the continuous communication we establish with each of them, but it's still an important problem we have to solve. 

Costa Rica is a country that strongly defends the standard of environment protection. How does this affect Movistar’s activities? 

In terms of the company in general, it is one of our main concerns, because we are an environment friendly company. We are starting a phone and charger recycling program. In our main building we recycle different products and we have very specific guidelines, for example, for the reduction of paper consumption, we only print when it is absolutely necessary and we work all day with sunlight. 

Your important growth has meant a considerable amount of new jobs for the country. Movistar is a leader in terms of job creation. What is the company’s policy and how does Movistar help form and train the human capital?

I don’t know if we are leaders in job creation and that since the beginning we have been a very efficient company, but we certainly have a lot of concern for our employees. We have around 850 employees and we generate around 4,000 indirect jobs (distributors, builders, network suppliers, etc.). That way we generate an important impact on the country’s economy. We train and improve our employees’ work quality. Our employees are motivated and happy, and we must retain them. 

Tell us about Movistar’s contribution to the country’s economic and social development. 

I believe we have been one of the main participants in the opening of the sector. Costa Rica didn’t deserve to have only one telecommunications option. The country went from having a cellphone penetration of 50 percent before the opening to being well over 100 percent in less than three years.

We have been pioneers in launching new products. We work to offer the best possible network and the best client service. We brought a lot of dynamism to the sector and we are, without a doubt, protagonists in the growth of Costa Rica’s telecommunications sector. The country is in a position to lead the process of evolution in the information and communication technologies through the data service.

In matters of innovation, we have signed an agreement with the Ministry of Science and Technology and the Ministry of Economy and Commerce for the launching of the Open Future platform, an open platform that will help Costa Rican entrepreneurs, in this public-private association that contributes to our objective of being an ally of telecommunications in Costa Rica. 

What objectives have you established?

Our objective is to be a reference point in the telecommunications sector, with an approach based on data, an efficient structure with the greatest talent in Costa Rica and with motivated collaborators, which finally translates in being the preferred option of the Costa Rican people. Starting from scratch has some added difficulties, but there are even more advantages, with agile and quick decisions in a country that is growing through a vertiginous growth and mostly supported by the best practices and support from the Telefónica Group.


Vanessa Massimini (ProjectDirector)
Matteo Transtevere (Editorial Director)