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ICE Plans To
Dismantle RACSA
The Instituto Costarricense de Electricidad
(ICE) said that it plans to move all its
internet clients from its wholly owned
subsidiary, the Radiográfica Costarricense (Racsa),
to its network, affecting some 80.000
customers.
Racsa customers would be serviced by ICE and
the rates would be unified, moving to the
lower rate structure offered by ICE.
For example, Racsa customrs with a 1Mb
connection pay us$26 monthly, while ICE
customers pay us$25.
The move is to fortalize operations as ICE
faces competition with the opening of the
telecommunications market and makes the
future of Racsa uncertain.
ICE officials say that a possible future for
Racsa would be to convert to a developer of
online services, a builder of infrastructure
and international marketing agency for the
Institucion.
The move is part of a plan to end the
duplication of services of ICE agencies,
sometimes competing which each other in the
same market and for the same customers, such
as the case of Racsa.
According to José Abraham Madrigal, the
author of the proposed reforms, Grupo ICE,
should take advantage of economics of scale.
Racsa has been offering internet services -
dial up and by cable modem - since 1994,
while ICE has concentrated on ADSL, interent
over its telephone lines.
Pedro Pablo Quirós, president of ICE, who is
also president of Racsa, said that move
would also end the deal between Racsa and
the cable operators such as Amnet and
Cabletica, who distribute Racsa services
over their cable network.
Amnet is one of the companies interested in
entering the telecommunications competition,
by adding international calling and direct
interent services to its cable television
services. The cable company has 50.000
internet subscribers and has made an
application to the Superintendencia de
Telecomunicaciones (Sutel) to offer
connection directly to its customers.
Negotiations between ICE and Racsa officials
have already begun in an effort to set a
timetable for the transfer, which would,
according to Quirós, first be Amnet
customers and then Cabletica's.
The proposal also indicates that there is
little time for ICE to make the move, as
customers would react negatively to the move
and provide an opportunity for competitors.
Racsa began operations in 1921 as a private
company owned by the state offering
international telegraph services. In 1964,
by law, 50% of Racsa was transferred to the
ICE and 1972 Racsa became a wholly owned
subsidiary of the state telecom.
In the 1980's, Racsa began offering Telex
services to replace the telegraph and in
1990 began offering internet services, 10
years ahead of ICE.
Today Racsa counts with 245 employees and an
annual revenue of us$60 million.
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