Nearshore Americas

US Firm to Help Cuba Bolster its Telecommnications Network

U.S. company IDT Domestic Telecom has signed an agreement with Cuba’s state-run telecom firm Etecsa to provide a direct connection between the two countries. If approved by the U.S. Federal Communications Commission, the deal will see IDT become the only U.S. telecoms provider offering a direct connection to Cuba.

On its website, the Cuban company stated that restoration of direct communications between the two countries would benefit people in both the countries, indicating that its aim is to bridge the communication gap.

According to its statement, the two companies are discussing the price for the service they are going to roll out in the months ahead.

Robust telecom infrastructure is critical for Cuba if it wants to compete internationally and attract foreign direct investment. Moreover, it is a prerequisite for businesses considering a move into the communist island.

Etecsa, it seems, has ambitious plans for Cuba. It says it will cut the Internet service price by half by April this year and set up about 136 cyber cafes across the island. For now, home Internet service is reserved for state officials and foreigners, while most Cubans turn to government offices, hotels and cybercenters for access.

American companies cannot explore the Cuban market unless the island’s telecom infrastructure is raised to the global standards. The United States has, therefore, allowed commercial shipments of devices like mobile phones and laptops, as well as related software and hardware to Cuba.

The U.S. military is building a US$31 million fiber-optic cable line between its naval base in Cuba’s Guantanamo Bay and Florida. This cable line will be ready for operation by the end of this year. Analysts believe that the United States will one day extend this cable to Cuba to improve connectivity.

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Until recently, the U.S. embargo was blocking Cuba from connecting to such submarine cables.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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