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Mr. Alexander Leon
Trade Commissioner
San Jose, Costa Rica

Costa Rica’s ICT sector profile

This report provides an overview of ICT technologies in Costa Rica

Country's overview

Costa Rica has a land area of  51,100 square kilometres and a population of 4.97 million and 1.5 million households. The country´s gross domestic product (GDP) reaches income per capita averages $15175 for a total GDP of $75.4 billion in 2017. GDP grows at 3% per year and its public debt accounts for 44.94% of the GDP. The inflation rate in the last three years averaged less than 2%, while unemployment reached 12% in 2018 and the minimum wage remained at US$6.2 thousand a year. Costa Rica positions itself as 63rd in the Human Development Index, 67th in the ease to for Doing Business, 56th in terms of the Index of the Perception of Corruption in the public sector and 48th in the corruption perception ranking. It is also a popular tourist destination with over 3 million visitors a year. The currency exchange is Can 1 $ = 427.14 Colon (CRC).

Manufacturing accounts for 14.7% of GDP and provides employment for 11.0% of the workforce. Major industries include production of electronic components, food processing, medical devices, construction materials, cement and fertilizers. Investment in the last years has been heavily focused on free trade zones, which provide tax advantages to investors. Almost 400 companies have established, most of them in the medical devices, advanced manufacturing and shared services sectors. In ICT related sectors, Costa Rica clusters 142 highly specialized companies, which employ more than 46,400 people. These companies are linked to industries like shared services, software, entertainment and media, design and engineering, and contact centres.

In the last 30 years, Costa Rica followed a diversification process was initially led by high-tech computer and electronic industries, services, non-traditional agriculture and tourism. In the future, buoyant exports and free trade agreements (including agreements with the USA and China) should drive the diversification process.

The country has subscribed 42 trade agreements, which cover about 90% of its exports. The main ones include agreements with Canada, China, Singapore and the EU as well as the US-Central American-Dominican Republic Free Trade Agreement (CAFTA-DR). In the last years, Costa Rica has been working to gain access to the Organisation for Economic Co-Operation and Development (OECD) and a number of significant important reforms are being implemented as a result.

Improving the transport infrastructure, fighting insecurity and violence, managing public expenditure efficiency, as well as balancing fiscal deficits are the priorities for the current government and the coming ones.

1. Costa Rica: Business culture

2. Import process, taxes and duty for ICT products of Canadian origin

2a. Bilateral trade Canada - Costa Rica

Costa Rica is Canada's main trading partner in Central America. Bilateral trade of goods between both countries amounted CAD 683.95 million in 2018. Merchandise exports from Canada to Costa Rica totaled CAD 164.4 million, while exports from Costa Rica to Canada amounted to CAD 519.5 million dollars. Costa Rica imports from Canada consisted grain products, machinery, electrical machinery, and vegetables.

2b. ICTs Total Foreign Market

Imports of ICT related products
ProductsUS$%
Mobile phones362.410.9%
Electrical materials171.15.2%
Electric cables157.34.7%
Computers136.24.1%
Semiconductor devices134.54.1%
Others235271.0%
Total3,313.5
100%
Exports of ICT related products
ProductsUS$%
Electric cables178.433.1%
Electrical materials12022.3%
Electric resistance36.76,8%
Integrated circuits34.96.5%
Electric components11.12.1%
Others157.1429.2%
Total538.24100%

Source: Procomer 2017

3. ICT sector in Costa Rica

As per a study conducted by the Costa Rican government, the total sales of the sector comes from national customers (56.6%), while the remaining proportion is distributed almost equally in sales abroad (22,6%) and sales to transnational companies installed in the country (20,7%) in 2017.

According to the classification used in the strategy "Costa Rica: Green and Intelligent 2.0" of the Chamber of Technology of the Information and Communication (CAMTIC), the sector of digital technologies in the country is made up of nine subsectors:


Source: Mapeo 2014 www.camtic.org
Text version
  • Manufacturing of digital components: 1%
  • Services Enabled by digital technologies: 5%
  • e-learning: 10%
  • Digital Multimedia: 12%
  • e-commerce: 20%
  • Telecommunications and Networks: 22%
  • Technology Commercialization: 22%
  • Software development: 52%
  • Information Technology: 55%

The largest TELCO carriers in Costa Rica:

3a. Main ICT Subsectors

Telecommunications equipment, software and services

The number of operators increased from 2 operators in 2008 to 143 in 2017 offering services of fixed, mobile telephony, and Internet and subscription TV.  While fixed telephony has decreased by 14% reaching 843 thousand lines, VoIP shows a constant growing of 17.7% from 2016 to 2017. The penetration in terms of  mobile telephony exceeds 170% with a market share, according to official SUTEL data Footnote 1 52% of with ICE / kölbi, 26,3% with Movistar, 21.3% with Claro. Results showed that, although ICE / kölbi predominates in all regions, in the Central Pacific, Huetar Caribe and Huetar Norte, Movistar has an important market share.

Regarding mobile  Internet, 86.6% of population accessed the Internet through a mobile device. Fewer than 8% of users are considering switching telephone service operators.

Fixed Internet service (residential and business) is provided through cable, ADSL, telephone dialing (Dial Up), fixed wireless connectivity (WIMAX), satellite or fibre optics. By 2017, the main providers are ICE-kölbi 28.6%, Tigo 26%, Telecable 15.6% and Cabletica 11.5%.

Regarding  Internet speed, in 2017, still over 200 thousand users are connected with speed under 2Mbps and almost 0.5 million are connected with speeds between 2 Mbps and 10 Mbps. ICE is still developing and working on the expansion of optic fibre connections. The Institute has built by 2018 about 7 thousand kilometres of optic fibre all over the country with around 50.000 solutions.

In 2017, television by subscription shows a predominance for coaxial cable, with 68 %, followed by satellite television with 29%, and finally television over IP and multipoint that combine the remaining 3% Footnote 2.

Business opportunities in the telecom market

Cyber security and electronic security

Business opportunities in the cybersecurity sub-sector

Enterprise software solutions

Enterprise/Licensed SoftwareInvestment (US$ million)
SAP2,36
GBM1,60
ORACLE0,89
TOTAL4,85

Source: SICOP between 2016 and 2017, taken from La República Media Group

Some Multinationals and National enterprises active in Costa Rica:

Business opportunities for Software solutions:

4. Market and sector challenges

Canadian Government Contacts

Canadian Embassy in Costa Rica, Nicaragua and Honduras

Alexander Leon
Trade Commissioner
alexander.leon@international.gc.ca
www.costarica.gc.ca
T. +(506)2242-4467 M. +(506) 8811-7851
San Jose, Costa Rica

Costa Rican Government and Commercial Contacts

Embassy of Costa Rica in Canada
Email: embcr@costaricaembassy.com

Consular Agent in Commercial Affairs in Canada
Email: mcorriols@procomer.com

Telecom Superintendant /Superintendencia de Telecomunicaciones

Ministerio de Ciencia, Tecnologia y Telecomunicaciones (MICITT)

Foreign Trade Ministry /Ministerio de Comercio Exterior.

CRECEX – Foreign Companies Representatives Chamber

CAMTIC- Chamber of ICT technologies

TELECOM Chamber

Related links

Canada-Costa Rica Free Trade Agreement

The Embassy of Canada to Costa Rica

Latin America and the Caribbean. A Global Commerce Strategy Priority Market 

CIA – The World Factbook – Costa Rica

Country Insights about Costa Rica

Import Regulations – Costa Rica

Prepared by: Alexander Leon (alexander.leon@international.gc.ca), Trade Commissioner at Canadian Embassy in San Jose, Costa Rica

Date: August 1, 2019

Disclaimer: The Government of Canada has prepared this report based on primary and secondary sources of information. Readers should take note that the Government of Canada does not guarantee the accuracy of any of the information contained in this report, nor does it necessarily endorse the organizations listed herein. Readers should independently verify the accuracy and reliability of the information.

Footnotes

Footnote 1

Telecommunications sector statistics, Costa Rica, 2017 Report, SUTEL.

Return to footnote 1 referrer

Footnote 2

Dirección General de Mercados, SUTEL 2017.

Return to footnote 2 referrer

Date Modified: