The Instituto Costarricense de Electricidad (ICE) decided not to award the contract for 1.5 million 3G cellular lines to the Chinese firm, the only bidder, however, promising that users will have the technologly available as scheduled for later 2009.

Last month, Nokia, Continez, Siemens Network Costa Rica, ZTE Corporación (Samsung) and Ericsson de Costa Rica, all bowed out and left Huawei Technologies Costa Rica, as the only bidder for the 3G contract, coming it at us$538 million dollar, more than double the estimated us$225 million ICE had budgeted.

Costa Rican president, Oscar Arias, sent a letter to the ICE board of directors urging the public institution not to award the bid to the Chinese and begin a new licitation for the urgently needed cellular lines.

According to ICE president, Pedro Pablo Quirós, the decision fornot awarding the contract to the Chinese was not motivated by the Arias letter.

The Huawei proposal included a number of items that were not in the ICE bid, thus elevating the price of the contract, according to Quirós. Another point of contention by ICE was the request by Huawei for a 15% deposit on the contract, while ICE had made it clear that all payments for the purchase were to in arrears.

Notwithstanding the setback, Quirós assures that ICE will have the 3G network in operation by the end of 2009, as had been planned and ready to compete in an open market now that the telecommunications monopoly has come to an end with the approval of the Telecommunications law last month.

Costa Rica has been without GSM cellular lines for more than a year, and the list of subscribers for the service keeps growing into the tens of  thousands.

Claudio Bermúdez, subgerente de Telecomunicaciones del ICE, said that ICE, faving the coming of competition, will now go into plan "B", which could include the expansion of the current GSM networks to provide lines in the short term and then make an initial purchase of 750.000 3G lines and two additional purchases of 375.000 lines each in the near future.

Source:insidecostarica