Over history, I suppose most monopolies were not good for their customers…. certainly some of the early ones in the US were not. One exception we old folks remember was AT&T and their technical arm, Bell Laboratories. They provided world class telephone service and technology that most certainly allowed the USA to become a worldwide business and technological powerhouse. They offered excellent services, excellent customer support, excellent technology and all at an excellent price.
However… The thing about being a monopoly is that, if you want to, you can pretty much give the finger to your customers every day for years and know they must just accept the insult. There is no option. You own the marbles and anyone who wants to play must play by your rules. You set the (cellular) rates (which, by the way and in the case of ICE are REALLY very good!), and make all the rules your customers must obey if they want to have cell phone service.
Now in some cases, the customers do not know they are being maltreated because there is no other option, so they believe this is as good as it gets! Let the learning curve begin!
The bad things about being a monopoly, though, is that for good or bad, your monopoly can end, in this case as a result of the Central American Free Trade Agreement (CAFTA). The bigger bad thing is that a lot of those customers that you mistreated and abused for many years have long memories.
Interested in this topic? Read on!
La Nación published a fine article yesterday (and a decent op/ed piece today) about just what The Instituto Costarricense de Electricidad (ICE) is facing… and it is not lookin’ good.
My translation: “The Instituto Costarricense de Electricidad (ICE) runs the risk of losing half of its customers once competitive cell phone providers open for service in Costa Rica.”
The actual number per a survey commissioned by La Nación, is that 23% of current users will probably switch to one of the new companies (Claro or Movistar) and 28% are somewhat likely to switch.
Those most likely to flee are in the age group 25-29.
I think that baring a tremendous effort on the part of ICE, the above numbers may be low.
Why? A few reasons!
1. The younger users are more tech savvy and far more likely to know what they have been missing, and as some old saying goes… Youth must be served. I expect the competition to cater to that group.
2. The median age in Costa Rica is 28.8 year (males: 28.4 years and females: 29.2 years (2011 est.). What does that tell you?
3. As I mentioned, there is a huge number of Ticos who simply do/did not know what they have been missing… but they will! They advertising barrage is coming sure as the rain.
4. Ticos talk. Families communicate… and as cell phones are as common here as fine looking women, the word WILL get out. Fast.
5. Outages like the famous one in February where 800,000 customers were without service can never happen again. Bets on probability?
6. These (new) competitors know how to market. Who knows if they will give away costly phones in exchange for a multi-year contract, but they WILL do something.
7. And sadly, while I have noticed many positive changes at ICE in the past year (and I deal with them a LOT), they still just do stuff so damned stupid as to make you wanna go bang your head on the wall!
Examples? Here is a couple just from today’s visit:
If your cell phone is in a corporate name, you need to get a fresh personeria (meaning one less than 30 days old) for just doing everyday customer service. This means a trip to the registro (always fun!) or paying your attorney some cash to get a current personeria. Why?? Want another? Prepaid SIMS have an expiration date! If you do not dial 1150 to check… you can miss the expiration and lose your balance! Why? I could go on…. for decades… but you get the point.
I think ICE would be well served by hiring some marketing and tech consultants from outside of Costa Rica to provide them with a virtual) or maybe real) head slap! They need perspective! If it were me, I’d actually try to steal away someone from Claro or Moviestar, because I can promise with almost 100% accuracy that these folks aren’t gonna serve up business as usual.
I actually believe it is not too late. Even some kind of advisory group would be helpful, but time is running out. A lot of people will lose a lot of jobs if management fails to get real.
While I have not been happy with ICE, I AM very happy with Costa Rica, and if at all possible I prefer to give my loyalty to the Costa Rican people and some fine employees at ICE who are trapped by crummy planning, management and policies. Might not be possible of course, but I prefer the colones remain in this country.
But… I also read yesterday (my translation):
“In January, ICE’s chief executive, Eduardo Doryan, told The Nation that ICE seeks to maintain a 55% stake in the cellular market by 2014.”
Wow…
Perhaps not all is lost… Walmart (Mexico and Central America) just today announced their plans to open 24 new stores generating 800 new jobs.
