The Business Year

Jaime Palermo Quesada

COSTA RICA - Telecoms & IT

Connect the Dots

General Manager, kölbi


Jaime Palermo Quesada is the general manager of the telecommunications area of the Costa Rican Electricity Institute (ICE) and of kölbi. He is also president of the boards of directors of Radiográfica Costarricense SA (RACSA) and Cable Visión of Costa Rica, CRICSA, and ICETEL. With more than 32 years experience in the telecommunications sector, he joined ICE in 1982 serving clients. He has been regional director in different areas of the country, and became manager at the customer division between 2009 and 2011, client manager between 2011 and April 2014, after which he has held the position of manager of the telecommunications sector. His educational background is in industrial engineering, after which he obtained a master’s in business administration with an emphasis on marketing, and has a specialization in marketing from Kellogg School of Management at Northwestern University.

"Ultimately, we plan on implementing and expand the use LTE/4G technology for data."

How has the company evolved since its incorporation?

The ICE is a state company which from the beginning was responsible for the development of telecommunications in Costa Rica. One of the main focuses at the beginning was on rural telephony and the expansion of fixed-line telephones across the country. We have gone through every different stage of development, and today we have an IP-based system. We have developed a 4G mobile network and we are improving coverage and the service quality of the overall mobile network. What is more, we started to build up a brand for the telecommunications industry and put social and environmental responsibility at the forefront of our priorities, as well as human resources. This is when the logo of the frog and the name of the company kölbi were created. In 2011, we sold 1.25 million prepaid licenses, a strategy based on getting ready for further competition in the industry with the entry of foreign companies. Thanks to that decision, when these foreign firms first arrived, they saw a slightly more mature market in which we already had a strong position. Today, we have 4 million customers, which represent 60% market share. In terms of income, 70% comes from individual customers, whereas the remaining 30% comes from businesses. In the business segment, we are also market leaders. However, when it comes to TV services, we only own 2% of the market share. One of our particularities is that we compete with all the companies operating in the IT industry in Costa Rica, which is currently at least 136 firms. Having said that, we need to focus on one or two segments in the industry; we cannot cover them all. That’s why we have two sister companies, Radiográfica Costa Rica and Cable Visión. The latter company sells television and internet services for home, while Radiográfica Costa Rica focuses on government services and large companies. In this context, we are currently in the process of redefining our entire strategy.

In which areas is kölbi investing the most?

We want to redefine our entire technological future, for Costa Rica has always been a leading and pioneering country in Latin America in terms of IT services. However, certain macroeconomic problems in Costa Rica have led to a reduction of investment in IT, putting all that innovation on hold. We are trying to get back on track, which is why we have a project to implement fiber optics across the country. We have already started with small-scale projects and in highly targeted areas that have been successful. Costa Rica is a demanding and consuming society in terms of IT services and products. Today, we focus on renovating our infrastructure from copper to fiber optics in order to become a company providing tools and content to our customers, as well as internet services and content on fully-digital platforms through a robust high-speed network.

How do you foresee the sector evolving, and how will kölbi contribute to this development?

We still need to implement certain regulatory reforms in the industry. For example, we are one of the few countries with flat-rate mobile data charges. This has drawn bad media attention to the country, for we are one step behind in terms of tariffs in comparison to similar markets. We currently have tariffs that were set at the end of the 1990s. I think that as a country we have not learned from our mistakes in the past. We need to move toward the liberalization of the mobile market. This does not mean raising tariffs in the market, as many think, but creating more effective competition in the market between players, which will lead to more competitive tariffs in order to attract more customers. We will also see an increase in the quality of services. At kölbi, we prioritize the customer experience. Current regulation has definitely deactivated investment in the industry. We have to learn from other markets such as Uruguay and Chile. The regulatory organization has almost nothing to do with the setting of the tariffs, and we need to move toward a market in which competition regulates the market. In terms of internet penetration, we are one of the leading countries, but when it comes to broadband, we are at almost the bottom of the queue. We need investments and regulations adapted to the current needs of the market.

kölbi currently reaches 89% of Costa Rican territory and is the leading mobile service provider in terms of coverage. What strategy will you implement to keep this edge?

I was appointed as General Manager in 2014. When I assessed the company’s situation I realized that despite covering almost all the country’s geography, this did not imply good performance. In the past few years we have grown our customer base effectively. However, investment in infrastructure did not follow at the same level. Our customers were not fully satisfied with our services, despite the wide coverage. We now focus on strengthening some areas of our coverage and optimizing our network, one of our main focuses since 2014. We have invested more resources in our data, amplifying licenses and controlling traffic. We have also started the installation of new infrastructure spaces. One main objective is to provide a better customer experience to our users. All in all, we have doubled our capacity and coverage in mobile infrastructure since 2014. Finally, we invest heavily in our people and in training.

What are your priorities for 2017?

Our priorities are the introduction of Fiber to the Home (FTTH), the finalization of content provision services, and the doubling of our mobile network points. We aim to introduce new technologies and services thanks to the multi-frequency antennas we plan to install. Ultimately, we plan on implementing and expanding the use LTE/4G technology for data.



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