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Cuba - Telecoms, Mobile and Broadband
Paul Budde Communication Pty Ltd., Feb 2011, Pages: 15
Executive summary
Economic pressures underpin Raúl Castro’s reforms
BuddeComm’s Cuba - Telecoms, Mobile, and Broadband profiles the fixed-line, mobile and broadband markets in Cuba.
Cuba still has the lowest mobile phone penetration in Latin America, one of the lowest levels of Internet penetration, and is among the five lowest in terms of fixed-line teledensity. Cuba’s fixed-line services remain a monopoly in the hands of government-controlled Empresa de Telecomunicaciones de Cuba SA (Etecsa), while mobile services are provided exclusively by Cubacel, a subsidiary of Etecsa.
There remains substantial state control over the right to own and use certain communications services, including the right to access the Internet. Whilst the Obama administration has recently relaxed some of the embargo rules pertaining to telecommunications, differences between FCC pricing regulations and Cuban government pricing rules effectively preclude US operators from operating in Cuba. Although Raul Castro has made it clear that he will be reducing the size of Cuban state expenditure in favour of private participation in the economy, the genuine liberalisation of Cuba’s telecommunications sector is expected to occur slowly over the next five to ten years.
Market highlights:
In 2009 the Obama administration said it would forthwith authorise US telecoms companies to establish themselves in Cuba, whether that be by way of establishing telecommunications facilities, roaming agreements with Cuban service providers, or transactions leading to the provision of satellite radio and television services. The US administration would also allow US residents to enter into service agreements with telecoms companies providing services to Cubans, as well as allowing the donation of certain telecommunications devices to Cuba without a licence.
By early 2011 however the Obama announcements had changed little since the Cuban government was still resisting the US policy steps whilst the FCC was not prepared to amend its rules to allow US operators pay the 84 cents per call required by the Cuban government.
Although in 2009 ETECSA stated that it would work with the government to increase teledensity in poorly served areas of the capital, by early 2011 it was estimated that fixed line teledensity was still the lowest in the region, at little more than 12%.
In January 2011 the laying of a new submarine fibre-optic cable between Cuba and Venezuela commenced. The cable is expected to triple Cuba’s overseas phone connections and data transmission speeds.
Mobile subscriber growth of around 50% in 2010 was largely attributable to the Cuban government’s decision to make mobile phones more accessible to citizens. Nevertheless mobile penetration continues to be rated by the United Nations as the lowest in Latin America. The substantial gap between Cuba’s mobile penetration, which stands at around 10%, and the rest of Latin America’s, which averages around 90%, continues to widen.
Despite the growing awareness of the Internet among the Cuban populace, public Internet access is still limited. Broadband services, such as ADSL and cable modem, are non-existent in Cuba, and until mid-2008 Cubans could not legally buy a computer or subscribe to an Internet connection without having a government permit.
Undoubtedly the most pressing incentive for telecommunications reform will come from the country’s growing economic crisis. In 2010 Raul Castro outlined a raft of significant state cutbacks and liberalisation measures designed to reduce the role of the state and increase the private sector.Lawrence Baker
February 2011
Data in this report is the latest available at the time of preparation and may not be for the current year.
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