Telecom Companies Aim for Cuban Sunshine

2016 Telecommunications Trends: More Choices, Less Lock-In

The Cuban Revolution, which occurred in 1959, is working out quite well for American telecommunications firms in 2016.

Firms that were unable to offer services to Cubans in the 57 years since Castro took over are now expecting to see a big payday as the political tide turns and Cuba opens up. The St. Augustine Record put it well late last month:

Thanks to the ingenuity of modern telecoms, as well as a host of new diplomatic and trade deals sponsored by President Obama, it seems as though 2016 will be the year that a direct connection between America and Cuba finally comes to pass. Historic agreements between Empresa de Telecomunicaciones de Cuba (ETECSA), the official telecom provider of Cuban- and American-based telecom giant IDT Corp., have led to some extremely promising preliminary results. With the groundwork for a major agreement in place, the benefits that could come to Florida-based telecoms are almost too vast to contemplate.

The pieces are being put in place. Last week, Reuters reported that AT&T is working on a mobile agreement with Etecsa, which is the nation’s state-run telecommunications firm. The firm won’t be the first to make a Cuban deal. Zacks, in its story on the AT&T negotiations, wrote that in April 2015, Sprint’s Boost Mobile prepaid division began offering an unlimited voice and text service between the U.S. and Cuba. In September, the story says, Verizon began offering roaming in Cuba.

These firms are being encouraged by the government to reach out to Cuba. Earlier this month, Eduardo Guzman and Anthony Glosson at The National Law Review noted that the Federal Communications Commission has taken legal steps to encourage investment:

On January 15, 2016, the IB issued an order removing Cuba from the Exclusion List. According to the order, the FCC ‘agree[s] with the commenters that removing Cuba from the Exclusion List will make it easier for U.S. facilities-based carriers to initiate service to Cuba, promote open communications, and help foster bilateral communications between the United States and Cuba.’ The FCC concluded that ‘[s]treamlining this process will allow carriers seeking new international Section 214 authority for facilities-based service to Cuba to receive such authority sooner, and will permit carriers with existing global Section 214 authority to provide services between the United States and Cuba without additional authorization.’  The order did not, however, address the nondiscrimination rules applicable to the U.S.-Cuba route.

The market in Cuba is untapped and will lead to parallel growth for the firms in the Cuban sections of Miami and elsewhere in the U.S. Thus, telecom companies may have been the second happiest group – after the Cubans themselves – with the moves by the Obama administration.

Carl Weinschenk covers telecom for IT Business Edge. He writes about wireless technology, disaster recovery/business continuity, cellular services, the Internet of Things, machine-to-machine communications and other emerging technologies and platforms. He also covers net neutrality and related regulatory issues. Weinschenk has written about the phone companies, cable operators and related companies for decades and is senior editor of Broadband Technology Report. He can be reached at cweinsch@optonline.net and via twitter at @DailyMusicBrk.