Costa Rica's telecommunications sector is poised for a transformative leap with the upcoming auction of 5G radio spectrum, as announced by the Superintendence of Telecommunications (Sutel) on Tuesday.

This auction, scheduled for January, aims to award spectrum concessions to both domestic and international firms eager to develop 5G networks, setting a baseline bidding price at $52.5 million.

Seven companies have been deemed eligible to partake in the process, meeting Sutel's stringent requirements outlined in the conditions of entry.

The auction is structured in two distinct phases to cater to nationwide and regional coverage needs.

For nationwide coverage, telecommunications giants América Móvil, operating under the brand Claro, and Liberty Latin America, known as Liberty, will vie for spectrum rights.

They will use the initial $52.5 million as the benchmark for their bids.

The regional phase of the auction opens the field to smaller, yet ambitious players such as Coopealfaroruiz R.L., Coopeguanacaste R.L., Coopelesca R.L., Coopesantos R.L., and Ring Centrales de Costa Rica.

This segment will proceed with the aim of enhancing localized 5G infrastructure.

The auction will offer 28 blocks of frequency bands across low, mid, and high ranges, with block prices varying from $49,000 to $3.2 million.

These prices reflect the available spectrum volume across different frequencies.

Successful bidders for national coverage must commit to constructing a minimum of 1,060 telecom towers, a stipulation essential for entry into the initial auction round set for January 23rd, contingent upon adherence to the established timeline.

The financial outcomes from the auction, including any premium bids beyond the starting price, will funnel into the National Telecommunications Fund (Fonatel).

Fonatel's mission is to harness these resources to bridge the digital divide by financing telecommunications projects.

Firms have a window from December 17th to January 7th to confirm their participation, as detailed by Cinthya Arias, President of Sutel’s Board of Directors.

Only those affirming their interest by this deadline will proceed to the respective auction phases, with the regional-focused bidding occurring on January 24th.

Following each phase, Sutel will release the auction results alongside a technical report to inform governmental decisions on awarding the spectrum licenses.

This auction not only marks a significant shift in Costa Rica's telecom landscape but also reflects the growing global emphasis on technological advancement and connectivity.