Chavez Beats AT&T to Cuban Telecom 'Gold Mine' as Dispute on Pricing Bites

Charlie Devereux
Bloomberg
January 26, 2011

A pricing dispute between the U.S. and Cuba may have cost American companies including AT&T Inc. and Verizon Communications Inc a foothold in the communist island’s recently opened telecommunications market.

Paris-based Alcatel-Lucent SA on Jan. 22 began laying a 1,600-kilometer (1,000-mile) underwater fiber-optic cable between Venezuela and the city of Siboney on Cuba’s southeastern coast. Venezuelan President Hugo Chavez heralded the subsea link as a way to break the half-century-old U.S. “blockade” of Cuba.

U.S. companies had been backing a separate venture by Miami-based TeleCuba Communications Inc, which said it was granted a license to build a 110-mile link from Key West, Florida, to Havana after President Barack Obama in 2009 loosened the U.S. trade embargo for phone service providers. The project has been delayed over the Federal Communications Commission’s refusal to accept price demands by President Raul Castro’s government for routing calls.

“This is a huge missed opportunity,” said Chris Sabatini, senior policy director at the New York-based Council of the Americas, a business group. “If you can get into a market early on, you can control it all along the value chain...”

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