Costa Rica is holding an auction for its mobile phone business after 40 years of state-run monopoly.

Costa Rica is to open up its mobile telecoms market after 40 years of state ownership – a condition of its Central American Free Trade Agreement (CAFTA) with the US.

The opening of the mobile phone market has been long-awaited by telecommunications companies in the region – after the CAFTA agreement came into effect a year ago, obliging Costa Rica to end its monopoly.

According to the regulator Superintendence of Telecommunications (SUTEL), three new mobile phone companies will get the green light to compete with their service plans and coverage by the first quarter of 2011, joining the current state-owned Instituto Costarricense de Electricidad (ICE).

The news was announced last week at a public forum held by SUTEL at the Hotel Real Intercontinental in Escazú, west of San José.

George Miley, president of SUTEL, said: “We are excited about the turnout and the interest and to see new faces and new competitors in the Costa Rican telecommunications market.

“Today marks the beginning of the process of granting approval into the mobile telephone market in the country. We believe that by September we will be giving approval to the country’s new operators.”

Potential entrants to the market will apply in February, and then three will be selected in April. They must meet certain criteria – including at least five years of providing cell phone coverage and reputable track records in other countries – to be eligible for market entry.

President Oscar Arias will sign a decree on 5 May approving the participation of those selected in Costa Rica’s cell phone market, three days before the conclusion of Arias’ term on the 8th. 

Then from May to September, the approved companies will work alongside SUTEL and the Environment, Energy and Telecommunications Ministry (MINAET) on the technical issues involved.

In a statement, SUTEL said that companies interested in bidding include America Movil, Latin America’s leading cellphone operator, Spain’s Telefonica SA, and privately-held regional mobile operator Digicel.

The approved companies are expected to offer phones and service in the first three months of 2011, and will be granted access to Costa Rica’s airwaves for up to 15 years, with the possibility of renewing their contracts for an additional 10 years.