Internet and e-commerce industry in Costa Rica

The country, the name of which is transliterated as the “Rich Coast”, Costa Rica represents the only Latin American country included in the list of the world’s 22 older democracies. This Central American country is bordered by Nicaragua to the north, Panama to the east and south, the Pacific Ocean to the west and south and the Caribbean Sea to the east. Costa Rica has consistently been among the top Latin American countries in terms of the Human Development Index. The country is ranked 3rd in the world, and 1st among the Americas, in terms of the 2010 Environmental Performance Index. Besides, Costa Rica stands as the most visited nation in the Central American region, with 2 million foreign visitors every year.

Central American countries, like Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama, all of which are having considerable scale of development in all telecommunication sectors. Moreover, as Costa Rica's economic policy boosts ICT development processes and operations, the country managed to reach a high level of ICT infrastructure advancement. This processes let country become one of the centers of e-commerce and offshore activity.

With number of Internet Service Providers operating, Costa Rica’s telecommunication sector is monopolized by two government companies, applied by the majority of Costa Rica residents, Grupo ICE and RASCA, ICE’s subsidiary. ICE delivers two main Internet services: ISDN and ADSL. ICE ISDN functions at double the speed of dial-up (128 Kbps), and is available in most areas without access to DSL or cable Internet. In addition to the monthly connection fee of about $8 listed below, ISDN users are required to pay $15 (RACSA) or $16 (ICE) additional per month.

ICE also offers ADSL service, high-speed data transmission via copper telephone line. The operator provides the connection at download/upload speeds starting from 256/128 Kbps up to 4096/768 Kbps for the prices ranging from $19 to $169.
RACSA offers a number of additional alternatives, including dial-up Internet, prepaid Internet (via dial-up), 900-number access, high-speed cable Internet and new WiMAX service.

RACSA’s dial-up Internet, priced between $9.90 and $35, represents an affordable solution for many Costa Ricans.

RACSA also delivers high-speed cable internet additional to ADSL. It’s is the fastest practical Internet connection for personal users. Cable connection services are also currently delivered by such companies as Cable Tica, Amnet, Coopelesca and Super Cable.

RACSA’s WiMAX represents a line-of-sight, high-speed wireless Internet option. Billed under the name Evoluciona, this new service is currently available at the prices of $29 up to $244 in select areas of San Jose, Heredia, Cartago and soon, Alajuela.
Meantime the other Internet services providers are achieving to operate on the Costa Rica’s telecommunication market, but with varying success. These smaller ISPs are currently in the process of getting legal permits to operate in Costa Rica.

Meantime, by the middle of 2009 six new ISP licenses to provide VoIP were awarded by regulator Sutel in June 2009.

In 2006, the incumbent operator ICE signed a deal with Global Crossing, the US internet and telecommunications company, targeting to significantly enhance the Central American country's internet capacity. Global Crossing announced plans to spread its core network to Costa Rica through the extension of its Pan American Crossing (PAC) system via the Unquí cable landing point in Esterillos. And Costa Rica's connection to PAC was supposed to give the country access to Global Crossing's global IP network delivering services in more than 600 cities in 60 countries.

The country code top-level domain (ccTLD) for Costa Rica is .cr, administered by NIC-Internet Costa Rica. Two years registration agreement for .co.cr is $149.00.

Direct second-level domains registration is also available in Costa Rica under:

• .ac.cr - Academic: Universities
• .co.cr - Commercial
• .ed.cr - Education: Colleges, High Schools, etc
• .fi.cr - Financial institutions like banks
• .go.cr - Governmental
• .or.cr - Non-profit organizations
• .sa.cr - Health related institutions.
• .cr - Other Uses

As for the Internet penetration growth, it made up almost 500% for the decade, with almost 1.5 million current users in the country, or 34% of the population. These figures may be compared to previously seen less than 7% subscribers in the country in 2000 that hovered 23% by 2005. However, Internet usage penetration remains relatively low in comparison with other ICT leaders.

Despite rapid ICT progress seen in the country during the last few years, substantial software development sector reflects tremendous interest being shown in ongoing offshore e-commerce development.

Costa Rica's e-commerce infrastructure deployment let a lot of companies, mainly based in the USA, establish online gaming operations in the region.

In 2001 the Channel Islands-based bookmaker Sportingbet.com bought Betmaker.com, a Costa Rica-based internet gambling site, that let Sportingbet.com get a toe-hold in the US online gambling market.

  However in 2003 the government of the country unveiled the decision to establish a registry of online gambling companies by the economy to ministry that was supposed charges about $26,000 up to $63,000.

So, government attention and participation reflected bad time for the gambling industry in Cosat Rica, which was at that point under threat from the looming US legislation seeking to prevent US citizens from utilizing offshore gambling services.

As for the electronic banking, it appeared to be relatively late in coming to Costa Rica. However, it first appeared in the country in 2001 offered by Interfin Bank's Inter Banca site that provides online request forms, general information, and corporate and personal banking services via the Internet, as well as other providers including Credomatic and Banco Nacional. Besides, online banking services are also delivered by various international banks with Costa Rica-based operations.

Locating websites in Costa Rica to carry out functions previously based in high-tax jurisdictions gives advantages of low rates of taxation for increasingly substantial parts of their operation. A company operating an e-commerce facility in Costa Rica will definitely choose to locate in one of the Free Zones and will therefore have minimal local taxes to pay

This wonderful coastline country proved its chance to become Central American leader in terms of e-commerce and offshore businesses by reflecting rapid Internet and related services deployment. Country’s government, that participates actively the processes of ICT development, encourages the progress in this industry. Currently, Costa Rica increasingly attracts foreign companies as successful offshore jurisdiction.