Cuba? Please Continue to Hold

Marcela Sanchez
Latin American Herald Tribune
July 26, 2010

More than 15 months have passed since President Obama lifted the ban on U.S. telecommunication companies seeking to operate in Cuba, ending a 50-year-old embargo against such businesses. The directive was billed as part of Obama’s search for a new direction in U.S.-Cuba relations and allowed, among other provisions, the signing of roaming contracts with Cuba's mobile phone operators.

Beyond creating business opportunities for U.S. companies, Obama wanted to develop the “means to encourage positive change in Cuba.” The measure is intended to expand communication links between both countries and facilitate the free flow of information to the Cuban people.

Early this month, ETECSA, Cuba’s telecommunications company, announced that the country of 11.2 million people now has over one million mobile phone users, a total greater than the number of landline users. While Cuba still remains at the bottom of cellphone penetration in the Americas, the number represents tremendous growth. Just three years ago there were only a few thousand mobile users in Cuba, mostly government officials and foreigners.

A feather in the cap for the Obama administration? Not exactly. Cellphone usage was already climbing rapidly when Obama took office and aside from some U.S. industry representatives being allowed to travel to the island to discuss business opportunities with Cuban officials, no single commercial activity can be attributed to Obama’s telecommunications directive so far.

It turns out the real instigator has been Cuban President Raul Castro. Weeks after officially taking over the helm from his brother Fidel in February 2008, Raul started to lift what he saw as an "excess in prohibitions and regulations,” including those imposed on the sale of cellphones and computers.

To attract more users, the Cuban government has been lowering the cost of consumer cellphone service ever since. Today Cuban officials say they also have "hundreds" of roaming agreements with providers from other nations—except the United States.

So far U.S. companies are the odd man out, while companies from other nations expand their presence in Cuba. Sure, Castro may be a key reason why that is the case, but so far industry representatives say the single greatest obstacle for U.S. carriers turns out to be Washington, not Havana.

According to a new report “Empowering the Cuban People through Technology” jointly published by the Cuba Study Group, the Council of the Americas and the Brookings Institution, telecommunications-related exports are more restricted to Cuba than to Burma, Syria or even Iran.

To read the entire article, click here.

To speak with one of our experts on this topic, call 212-277-8384 or email communications@as-coa.org.

See more in:  Cuba, U.S. Policy, Infrastructure & Environment, Democracy & Elections