News of the relaxing of restrictions on travel to Cuba and the opening up of debate around changes to diplomatic relations between the United States and Cuba has also stimulated discussion about the potential for the Caribbean country to claim a piece of the IT nearshoring pie. Such developments, though, would require a stable, high-end telecommunications infrastructure to support the industry.
The potential is there, but the current state of telecommunications is underwhelming. Larry Press, a professor of information systems at California State University, Dominguez Hills, who runs a blog on the Internet in Cuba, noted on his blog: “This sad situation is changing. Cuba will soon have an undersea cable. Chinese networking equipment and expertise are world class and, presumably, not effected by the embargo. The political situation in the United States is slowly changing as the revolution fades further into the past. The Cuban leaders are old and will change. Most important, there is a good deal of pent up demand for the Internet among the well-educated Cuban population.”
Nearshore Americas: How would you characterize the current state of the telecommunications sector in Cuba? To what extent is the telecommunications infrastructure comparable to that of the USA?
Larry Press: It is very poor – nothing like what we have in the USA. In my blog I provide some context on the state of the telecommunications sector and note that the Cuban Internet is minimal and unfree – far worse than one would expect in a nation with a relatively high UNDP Human development index.
Freedom House ranks Cuban Internet freedom 62nd among the 65 nations they survey and the UN International Telecommunications Union ranks Cuban information and communication technology development last among 32 nations in Latin America and the Caribbean.
Historically, there are three primary causes for the sad state of the Cuban Internet – the US trade embargo, Cuban poverty at the time of their connection to the Internet and the government’s fear of information. Today, resistance by ETECSA, the current monopoly ISP, may also be a problem.
NSAM: Has there been significant investment into the development of the sector recently? Is there any indication that this is a priority going forward?
Press: The most significant investment was the ALBA-1 undersea cable to Venezuela and they are building a datacenter, but the domestic infrastructure is highly limited – Cuba is a “greenfield.” They say they want to do as much as they can afford, but they are not doing much. Cuba now says they want to give the Internet priority. I hope they mean what they say – the ball is in their court.
NSAM: What impediments are there to the creation of a stable, state-of-the-art telecoms sector to support the development of IT services in Cuba?
Press: The core obstacles are around lack of funds and a poor economy, government fear of free information and (probably) the desire of the monopoly ISP, ETECSA, to keep control and maximize profit.
We do not know the answers to questions such as what happens to ETECSA profits; who sets ETECSA policy; and who makes operational decisions about which services to offer and where to invest. As I noted in that blog post, the answers to those questions will determine the future of the Internet in Cuba.
NSAM: What impact do you think the opening up of Cuba to US telecoms will have on the sector?
Press: That depends upon them – the ball is in their court. Recently the President announced changes to Cuba’s policy “in order to increase Cubans’ access to communications and their ability to communicate freely”. These included:
- The commercial export of certain items that will contribute to the ability of the Cuban people to communicate with people in the United States and the rest of the world will be authorized. This will include the commercial sale of certain consumer communications devices, related software, applications, hardware, and services, and items for the establishment and update of communications-related systems.
- Telecommunications providers will be allowed to establish the necessary mechanisms, including infrastructure, in Cuba to provide commercial telecommunications and internet services, which will improve telecommunications between the United States and Cuba.
So, the US is willing, but so are vendors from other nations like Orange in France and Chinese countries – the question is, what is Cuba willing to allow? If they sincerely wish to expand access, there are a number of interim steps they can take as they commence long-term planning. Policy decision regarding infrastructure ownership and regulation will as important as technology decisions.
NSAM: In your opinion, could Cuba leverage the relaxing of restrictions to IT services nearshoring to Cuba a viable option? What still needs to happen to make this possible, in your opinion?
Press: I sure hope so! I think nearshoring of software development would be viable – it would be “very near” shoring and Cuba has many trained programmers – but the possibility for Cuban exports of goods and services goes well beyond software development.
Cuba has a lot of underemployed people in many fields – not just software developers. Cubans would benefit from collaboration with people in the US who better understand the business processes and markets here. I would like to help Cuban technical people and entrepreneurs in coming to the US. I am not sure what sort of political and regulatory pressure that sort of thing would meet.