What Happened
The Autoridad de los Servicios Públicos (ASEP) has announced a precalification process to attract a third mobile operator in Panama. The move follows the exit of Digicel between 2023 and 2024 and repeated failures by previous administrations to break concentrated market structures. ASEP expects the new company to begin operations in the first quarter of 2027 after a planned tender later this year.
Background
Panamanians have long complained about limited competition in the mobile market, citing costly services and poor quality under the current duopoly. The opinion published in La Prensa frames this concentration not as an accidental market failure but as the outcome of extensive state intervention: licensing, concessions and regulatory barriers that, according to the author, protect incumbents and hinder new entrants.
Arguments and Analysis
The piece argues that legal and bureaucratic restrictions to entry have created an environment in which existing operators can extract supra‑competitive profits while delivering subpar service. From this perspective, the ASEP measure to invite a third operator is a positive step but insufficient. The author contends that allowing a single additional player, while leaving the broader regulatory framework intact, will have only limited impact on prices and quality.
Drawing on a libertarian viewpoint, the author calls for comprehensive liberalization: removing administrative barriers, ending privileges that favor established firms and permitting any national or foreign entrepreneur to offer telecom services. The central claim is that true competition, not selective state-managed entry, is the mechanism that will drive innovation, lower prices and improve service for consumers.
What This Means
The ASEP precalification process could increase choice for consumers if it results in a credible new competitor and if the regulatory environment allows that entrant to compete effectively. However, as the author warns, a single new licensee may not be enough to change market dynamics entrenched by years of limited competition and regulatory complexity.
Policymakers face a choice: pursue incremental adjustments within the current regulatory architecture or consider broader reforms that reduce barriers to entry and contestable-market restrictions. The timeline put forward by ASEP—aiming for operations in early 2027—sets a near-term benchmark for assessing whether the process delivers meaningful change.
Next Steps and Context
ASEP’s tender later this year and the expected start of operations in Q1 2027 will be closely watched by consumers, industry stakeholders and policy observers. The opinion published in La Prensa, authored by an independent analyst, positions the precalification as a necessary but partial remedy and urges more extensive market liberalization to break the hold of incumbents and improve services nationwide.