Archive for the ‘cell phone companies in El Salvador caught price fixing’ Tag

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.”

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