Following changes in U.S. foreign policy toward Cuba, announced by President Obama in December 2014, U.S. government officials and industry players have begun exploring the development and expansion of Cuba’s telecommunications infrastructure and services. This development and expansion, targeted by the Obama administration as a natural step in its plan to normalize relations with Cuba, appears to be a priority as the President encourages gradual, but certain, changes.
Developments began in February 2015, when Cuba’s state phone company, ETESCA, in partnership with New Jersey-based IDT Domestic Telecom, established a direct interconnection with the United States for international voice calls for the first time since 1999. Then, in mid-March, several Google executives visited Cuba and met with students and professors at Havana’s University of Information Science to discuss, among other things, the island nation’s access to and adoption of the Internet and mobile applications and services. Perhaps the highest-level interchange between the United States and Cuba so far came in late March, when U.S. Deputy Assistant Secretary of State Daniel Sepulveda led a delegation to Cuba to meet with Cuba’s Vice Minister of Communications and discuss telecommunication issues.
Though these developments are encouraging, reports from these meetings seem to share a common theme: telecommunications has a long way to go in Cuba. The country has one of the lowest rates of Internet access and mobile penetration in the world (roughly 5-10 percent for each). Internet access and private computer ownership are only possible with government authorization, and most of the population can access the Internet only by paying exorbitant fees at government-sanctioned Internet cafes.
Cuba’s underdeveloped telecommunications infrastructure and low Internet and mobile access penetration rates present both significant hurdles and the sizable opportunities of a largely untapped market. The way these opportunities develop will largely depend on the Cuban government’s policies going forward. For now, at least from the U.S. perspective, government and industry players appear ready to bet that Cuba’s telecommunications sector will take off in the foreseeable future.
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