COSTA RICAN TELECOM UPGRADE ON TRACK

UNCLAS SAN JOSE 000426 SIPDIS SIPDIS E.O. 12958: N/A TAGS: ETRD EINV TINT CS SUBJECT: COSTA RICAN TELECOM UPGRADE ON TRACK ¶1. Summary. Costa Rica's parastatal telecom monopoly, Instituto Costarricense de Electricidad (ICE),announced plans to invest US$59.8 million for installation of a nationwide fiber optics network upgrade to improve its broadband internet capacity and coverage. This investment is being made so ICE can better compete under CAFTA. End Summary ¶2. ICE signed an agreement with ECI Telecom, an Israeli network provider, in October 2005, which just gained final contract approval from the GOCR comptroller's office. Utilizing ECI's design, ICE has already completed up to 40% of the network which will comprise a total of five separate rings covering border to border and sea to sea creating improved international interconnection for its network. The backbone network will provide ICE with additional capacity to deliver voice and data services to fixed and mobile subscribers. The project completion date is set for mid 2008. ¶3. The project includes the delivery and installation of ECI's XDM converged SDH and DWDM optical platforms, which enable up to 40 channels and 10 Gigabits each, meeting the long-term bandwidth capacity needs of ICE. In addition, the project will give ICE an advanced network architecture for future services and expansion to meet the needs of both residential and business communities. ¶4. Under the terms of the contract, ECI Telecom has provided all aspects of the network design and installation for over 1,000 km across urban and rural areas of Costa Rica. The total project cost is $US59.8 million. ICE will contribute US$28.6 million and the Central American Bank for Economic Integration will provide a loan for the remaining US$32.5 million. ¶5. Most industry observers think ICE would not be making this kind of investment without the competitive environment created by CAFTA looming on the horizon. In that sense CAFTA is already spurring investment that will benefit Costa Rican telecom consumers. WEITZENKORN