QCOSTARICA — A group of position legislators want to do away with the Radiográfica Costarricense (RACSA), a division of state telecom Grupo ICE, claiming its functions are duplicated.
RACSA was once the only internet connectivity in Costa Rica. Before that it played a major role in telecommunications in the country. Today, the Grupo ICE in charge of the development of digital solutions that optimize the infrastructure of information and telecommunications technologies of the state companies, to increase their efficiency, quality and transparency of the services that institutions provide to citizens.
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RACSA has strategic assets such as radio spectrum and is responsible for the deployment of private networks and 5G wireless broadband. In addition, it is a contractor for the State.
“Racsa is a company of ICE that represents greater burdens and financial risk for the group, as well as for taxpayers,” states bill N.º24.105.
And while RACSA is a wholly owned subsidiary of the Instituto Costarricense de Electricidad (ICE), it was founded in 1964 by law and it’s function can only be terminated by a law. That is, ICE has to carry the company until such a time legislation is passed to remove it’s legal status.
ICE does not publish the financial results of its individual subsidiaries. Overall, ICE’s telecommunications segment, which includes RACSA and the mobile communications brand Kölbi, among others, reported revenues of ¢406 billion colones (US$780 million) during the first nine months of 2023 compared with ¢432 billion colones for the same period the previous year, according to the group’s latest financial report.
The bill, promoted by a group of seven legislators headed by Kattia Cambronero of the Partido Liberal Progresista (PLP), states that in 2021 Racsa reported a loss of ¢447 million colones. More recent data was not provided.
The proposed legislation also says that “given the company’s difficulties in facing its financial situation and unjustifiable existence, it has been assigned other projects outside the nature of its powers” such as operating drug detector scanners in ports and border posts. This situation has been questioned by the comptroller general due to the lack of transparency, according to the bill’s proponents.
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The bill also claims that the company has not been able to innovate in the telecommunications market and “has lost many customers in recent years.”
According to parent ICE, RACSA currently has a portfolio of more than 700 clients, both public and private.
Unlike Kölbi that offers consumer services, RACSA focuses on business and government services and is an official Oracle distributor.
“The need to close institutions that have lost their reason for being is urgent. Throughout different administrations, Racsa tasks have been assigned for which it is not prepared; making it vulnerable to possible acts of corruption.
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“Costa Ricans are tired of institutions that do not add any value to the country. Therefore, it is time to close what does not work and liquidate these institutions that are not transparent at all,” said Cambronero.
In the hypothetical but seemingly unlikely case that the bill to scrap RACSA is approved, the company’s spectrum 3.5GHz band, one of the main bands for the development of 5G networks in Costa Rica, should be put out to public tender, according to the proposed bill.
The accumulation of spectrum by ICE and Racsa is a constant complaint of Costa Rican telecommunications players. Recently, two blocks of spectrum were returned, opening the door to advancing the 5G spectrum auction.
RACSA is in charge of the deployment of 5G for enterprises and the development of 5G fixed wireless access (FWA). The first which should begin to be offered this February.
President Chaves in defense of RACSA
In a press conference last Wednesday after presenting a bill related to driving licenses in which RACSA will participate, Costa Rica president Rodrigo Chaves stated publicly his government’s support to keep RACSA alive and its work with ankle bracelets used to monitor prisoners on condition release and the anti-drug scanners at the Limón port, among others.
“What happens is that they (the legislators) are touching interests, with ankles, scanners and with this licenses, now that the tool is being well used, and not as before, but well, let’s see what happens,” said Chaves.
Legislator Cambronero quickly replied to Chaves’ statement.
“It seems that the president lives in another reality because coming to defend an organization like RACSA is impressive, that it has lost more than ¢56 billion colones and says that it adds value… what value is it if they are not transparent when making contracts, like that of the scanners? It’s time to stop defending the indefensible,” said the legislator.
If the legislation is approved, Grupo ICE has six months to initiate the liquidation of RACSA.
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