Cuba’s Mobile Subscriptions Soar

In 2008, when the government of Raul Castro first began introducing market-oriented reforms, the government announced two key policies to spur the growth of mobile telephony. First, in March it allowed Cubans to own a mobile phone, provided they purchased a pre-paid subscription. Then, in May the government permitted mobiles to be included in gift parcels sent from the United States. This jumpstarted mobile telephony on the island.

Since then, number of mobile phone subscriptions on the island has increased 10-fold, rising from only 300,000 in 2008 to surpass the 3 million mark in May 2015.

Behind the Data

Along the way the state telecom providers, ETECSA, and its mobile wing, Cubacel, have encouraged mobile access by introducing various incentives to encourage mobile subscriptions. In 2009 the government cut the mobile activation fee by 50%. In 2011, ETECSA introduced a series of promotions, which at first appeared for only brief periods 3-4 times throughout the year. The most common incentive, then as now, is known as “double top-ups,” which allows senders to buy access through a website and ETECSA will double that access during the promotional period. A 20 CUC (equivalent to $20 USD) purchase is usually the minimum amount to be eligible for the incentive. So, a 20 CUC purchase will provide the subscriber with 40 CUC worth of use.

Since 2012, the pace of incentives has accelerated. “Double top-ups” are now offered every 4-6 weeks. And ETECSA has unveiled a special promotion program aimed at dramatically decreasing the cost of a mobile phone for potential subscribers. “Si activas ganas 30” drops the cost of a new mobile subscription from 40 to 30 CUCs, while also awarding the new subscriber with 30 CUCs worth of coverage, thus making it practically free to get a new subscription. The “ganas 30” plans have also increased in frequency in recent years, but at present they are offered about every three to six months.

What It Means

Going forward, ETECSA plans to add 800,000 subscribers through 2018. Doing so means half the island’s population will have a mobile phone. However, under normal market conditions the pace of growth might be expected to taper off as the cell phone market nears saturation among the primary user group, those aged 18-49.

So, how will the Cuban government meet the goal of expanding mobile to half the island’s population by 2019? Well, by changing the rules on how many mobiles someone can have. Earlier this year, ETECSA announced it would allow each Cuban to have up to three pre-paid mobile subscriptions.

Our Take

In 2008, when the government began encouraging access to mobile, there were twice as many personal computers as there were mobile phones on the island. It was the most depressed of Cuba’s ICT sectors. The catch-up gains were easier with mobile.

In the years since, mobile has served as an effective bridge between Cuba’s telephone infrastructure, which is reasonably good, and the country’s woeful inadequate Internet infrastructure. Expanded mobile helped sate the appetite for greater connectivity without requiring a major drive to modernize the country’s ICT infrastructure. Crucially, it also helped the government glean how Cubans would respond to the newfound openness.

Now things are different. The easy gains in mobile access have been notched, and so the government is trying to meet its goals by letting Cubans have two or three mobiles. Meanwhile, the government looks ready to expand Internet access. Going forward, the numbers of mobile subscriptions are likely to matter less to the government than what the ‘mobile model’ represents—a way to improve connectivity while still limiting society’s ability to stir for greater change.