Sunuvabiiches – they ARE price fixing! ( Cell phone mafia in El Salvador)   6 comments

Tops on my list of things I will NOT miss when I leave El Salvador:   the cell phone mafia (white collar mareros* of El Salvador).   Phone saldo (credit) runs out faster than you can blink.  I suspected price fixing, jokingly, but thanks to my Google search for ‘noticias’ on Digicel, I found out some companies were BUSTED and FINED for it just three weeks ago!    A cell phone experience this past Saturday illustrates how this happens:

Did a saldo (phone credit) check. Had $3.67 credit.  Then made two phone calls:
1) 6 min 56 seconds to my husband
2) An 8 minute, 16 second call to a friend a couple hours later.
– – A total of 7 minutes and 12 seconds of talk time —

Saldo check after call two:  I had 78 cents. That’s about 19 cents a minute.

Sure, I could get a plan, for as cheap as $10 a month, and they go from there.  I went to their web pages, and see per minute tariffs you pay above your monthly rate, but don’t find plans where TALK time is included with a monthly fee.   I can get anywhere from 2-5 “favorite numbers”, and up to 150 free text messages.

I’ve asked people here, and no one seems to know about cell phone plans with voice minutes included.  Everyone says they don’t bother with a plan (unless their job pays for it), they all buy “Saldo” which is pay as you go credit.  Here is a web page from the Claro website, which has a plan for $15 a month, where calls to other Claro customers are .08 a minute, and calls to non-Claro, .14 a minute.   The per minute rate drops to .07 for $20 a month, .06 for $40 a month, and its only (only, ha ha!) .05 a minute if you pay $75 a month for the “plan”.  For all plans, out of network calls are ALWAYS .14 a minute.  You call that a plan?  I call it a sham, stan!  People who make $700-$1000 have a “good” job here.  Would you sign up for one of these cell plans if you made that a month?

But there is some justice, after all.  Proof that a number of them were price fixing, and some were fined for it, based on a January 22 article.  My provider, Tigo, is not in this list, but I bet they collude with the others – the $500 in taxes they paid last year is indicative of their  standards.

Article, in Spanish, on La Pagina, about the ruling.    Translation:

Million Dollar fine imposed for agreeing to fix telephone rates.

The Board of Directors of the Superintendent of Competition (SC) fined Telemovil, Telefonica, Digicel, and Intelfon for violating the competition Act by agreeing to set a fee, despite knowing the law prohibits such agreements.

The Superintendent of Competition, through its board, sanctioned the Telemovil, Telefonica, Digicel and Intelfon phone companies, for violation of the Competition Ac

Digicel and Intelfón received an economic sanction for a total of US$ 1, 215,497.94, after having agreed to fix the rate of $.21 plus VAT per minute for a call originating on a land line and terminating on their mobile networks.

Specifically, the phone companies violated Article 25 of the Law of Competition, which prohibits agreements between competitors.  The article literally says that “anticompetitive practices made between competitors are prohibited, which, among them, adopt the following forms:  a) Establishing agreements to fix prices o other conditions of purchase or sale under whatever form,” describes the Superintendent of Competition.

In this way each company is fined: $ 658,050.00 for Telemovil; Telefónica $260,672.03, $233,909.76 for Intelfon, and Digicel $ 62,866.15.

The fines differentiated based on criteria of reasonableness and proportionality considered by the SC, which, in addition to the criteria in Article 37 of the law, took into account the economic capacity of the companies being sanctioned.

* marero – a local name for a gang member, a member of a ‘mara’.  The ‘ero’ ending is used to denote a person who does or is associated with something.    Pelo is hair.  A peluquero (you have to change the c to a q for it to sound correctly) is a barber/stylist.  Here’s a fun one:   Mujer is a woman.  And a mujerero is a “womanizer.”

6 responses to “Sunuvabiiches – they ARE price fixing! ( Cell phone mafia in El Salvador)

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  1. That is awesome Jen! About time someone did something about this. Next they need to fix the text message problem. I swear they send you messages and than charge you to read them. Even using trickery to make you think that the message is coming from an actual person so that you open it. Great post!!

    • That’s really crazy with the tricky text messages. I used to get a ton from TIGO but I called up and said opt me out of any and every ‘solicitation’ and believe it or not, after the 2nd or 3rd call, the # of inane txt messages did seem to go down. I find it an immense invasion of privacy to send all those messages. Its YOUR phone because you paid for the phone and you pay for the airtime. Therefore, they have NO right to use your phone, bandwidth, resources, etc.

  2. Why wouldn’t the Salvadoran elite price fix phone credit. They rip off the consumers there in every other way. Look at the packaging in the grocery stores! The Salvadoran elite have created a new system of shorting the consumer; through using packaging that provides something just short of the amount needed to prepare any decent recipe. So you are forced to buy two packages of tomato sauce instead of one to create something like spaghetti sauce. And the pricing of these items is even higher than in the U.S., for a country whose median income is so far below the U.S.

    Go to Hiper Paiz and try to find do-it-yourself items to save money. You won’t find them. I wanted to hook a rug…something basic…and there were no hooks or burlap anywhere in Hiper Paiz. Go to Walmart in the U.S. (which Hiper Paiz is supposed to represent) and these are standard.. Forget about buying yarn there to knit or crochet! I wanted to find string to macrame. Forget about it! All the crafts projects that I freely did in the U.S. were nearly impossible to do there. I realized why. In El Salvador, the corporate elite want to sell you particle board furniture and cheap plastic crap from China, rather than allow you to create your own quality items.

    It’s really sad when the corporate elite of a country are so jug-headed and ridiculously insecure that they do this. What I saw when I lived there was nothing short of exploitation and persecution of the Salvadoran people. I left feeling disgust for the vulgarity of the wealthy there and respect for the average Salvadoran for eeking out an existence in these conditions.

    • You are so right, Jennifer. When you do the math, it doesn’t work out. Some things are cheaper – like fruits and veggies grown here (or in nearby Guatemala/Honduras), but shouldn’t they be? Other things, yeah, a total rip-off. I was talking with someone a couple months ago, who travels between the Central American countries, and he was telling me that items in the hardware store are cheaper and more reasonable in other CA countries, but cross the border to El Salvador and the price rockets upwards. And yes, furniture is darn expensive here – which may be partly a result of current laws against cutting down trees (after their massive deforestation), but why shouldn’t the same cheap furniture we buy from China in the U.S. be the same price here?

  3. You are welcome. You have a fascinating blog!

    When you think of furniture, have you ever wondered why El Salvador and Latin America in general doesn’t allow IKEA to sell there? Especially, when you see IKEA particle board furniture in even some of the top stores? Certainly, IKEA would reset prices if they arrived there. LOL

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