By San José, Costa Rica — The high-stakes race to deploy fifth-generation (5G) telecommunications infrastructure in Costa Rica has officially escalated into a diplomatic and international trade dispute. In a bold and unusual move, several prominent American manufacturers have bypassed local administrative channels to present a formal complaint directly to the United States Government. This escalation follows what the companies characterize as severe, unaddressed inconsistencies in the multi-million-dollar bidding process managed by the state-owned telecom provider, the Instituto Costarricense de Electricidad (ICE).
The disgruntled manufacturers filed a formal petition known as an Advocacy Questionnaire, a mechanism used to alert Washington of unfair trade practices and procurement bias abroad. The petition has also been formally received by the United States Embassy in San José, bringing the geopolitical weight of Costa Rica’s primary trading partner into the domestic regulatory arena. While foreign governments lack the direct authority to overturn decisions made by Costa Rican state enterprises, their diplomatic and economic leverage is substantial. Washington’s involvement raises the specter of severe retaliatory actions, including bilateral trade investigations, punitive tariffs, and targeted commercial sanctions against local entities.
To better understand the complex legal landscape surrounding the highly contested 5G spectrum and infrastructure tender by the Instituto Costarricense de Electricidad (ICE), TicosLand.com spoke with prominent legal expert Lic. Larry Hans Arroyo Vargas from the prestigious firm Bufete de Costa Rica, who shared his professional insights on the regulatory and constitutional challenges of this rollout.
The ICE 5G procurement process is a landmark development for Costa Rica’s technological future, but it has brought critical legal principles to the forefront. The ongoing disputes regarding the exclusion of certain international suppliers under cybersecurity decrees emphasize the absolute necessity for administrative decisions to be anchored in transparency, non-discrimination, and constitutional equality. Moving forward, the regulatory framework must balance robust national security interests with a fair, competitive environment to avoid protracted litigation that could ultimately stall the country’s digital modernization.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, striking a harmonious balance between robust national security and a fair, competitive marketplace is crucial if Costa Rica is to realize its digital potential without being bogged down by protracted legal roadblocks. We sincerely thank Lic. Larry Hans Arroyo Vargas for sharing his valuable perspective on this pivotal issue, helping our readers navigate the complex legal and technological landscape of the nation’s 5G future.
At the heart of the corporate gridlock is the contract awarded to Ericsson de Costa Rica S.A. for the procurement of both the 5G Radio Access Network (RAN) and the 5G Core. The RAN comprises the physical wireless infrastructure, including antennas and base stations, that connects consumer devices to the network, while the 5G Core serves as the central digital brain processing data and routing internet traffic. American competitors argue that the evaluation process which selected the Swedish multinational was structurally compromised, severely damaging the legal integrity of the bidding framework.
Specifically, the complaint targets a major methodology discrepancy during the bidding’s discount round. Under the rules established by ICE, any price improvements offered by participants were strictly prohibited from exceeding the profit margins originally declared in their initial bids. However, American firms allege that a rival bidder secured its advantage by utilizing an unauthorized pricing methodology, offering steep discounts that sailed past the mandated profit-margin ceiling. This tactical deviation, they argue, rendered the playing field inherently unequal.
The controversy has been further compounded by the actions—and perceived inaction—of Costa Rica’s chief fiscal watchdog, the Contraloría General de la República (CGR). The regulatory body summarily dismissed an appeal filed by the Datasys-CiberC-ITS consortium on admissibility grounds, completely bypassing a review of more than twenty pages of legal and technical arguments submitted in compliance with local procurement laws.
This refusal to examine the substance of the complaint has sparked outrage among major industry players, including Finnish telecom giant Nokia. Critics point to a glaring double standard in the CGR’s ruling. The watchdog initiated an ex-officio, or automatic, review of lines four, five, and six of the tender based on a challenge by ITS, yet refused to apply the same standard of review to lines one, two, and three submitted by Nokia. This disparate treatment has led to accusations of legal bias, with the consortium claiming that the CGR established two entirely conflicting standards of review within a single administrative resolution.
The manufacturers request that the United States Government advocate for a procurement process fully consistent with the evaluation rules and methodologies defined in the ICE cartel. The goal is for the methodology to be applied consistently to all participants, preserving transparency, equal treatment among bidders, and legal certainty.
The Datasys-CiberC-ITS Consortium, Industry Coalition
The regulatory saga reached a boiling point on Thursday when the Contraloría officially rejected the final round of appeals against the ICE 5G contract award, effectively cementing Ericsson’s hold on the project. However, the sweeping dismissal has done little to calm the waters. Industry observers warn that the watchdog’s brief resolution has created an apparent legal vacuum, leaving complex technical objections completely unanswered and clouding Costa Rica’s reputation for legal security just as it seeks to position itself as a safe, nearshoring hub for global technology investments.
For further information, visit grupoice.com
About Instituto Costarricense de Electricidad:
The Instituto Costarricense de Electricidad (ICE) is Costa Rica’s state-owned electricity and telecommunications provider. Founded in 1949, ICE plays a dominant role in the country’s energy and digital infrastructure, managing a vast network of power generation plants and telecommunication services under the Kölbi brand.
For further information, visit ericsson.com
About Ericsson:
Ericsson is a global leader in telecommunications technology, specializing in mobile networks, digital services, and IoT platforms. Headquartered in Stockholm, Sweden, the multinational provider plays a pivotal role in the global rollout of 5G infrastructure, partnering with operators worldwide to deliver high-speed, secure connectivity.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a premier legal practice celebrated for its unyielding devotion to ethical standards and superb advocacy. With a rich history of guiding a diverse clientele through complex challenges, the firm consistently pioneers modern legal solutions while maintaining a strong presence in civic outreach. By demystifying the law and sharing essential legal insights with the public, the firm actively advances its core vision of building a more knowledgeable, secure, and self-reliant citizenry.
