President Obama’s decision to normalize U.S. diplomatic and economic relations with Cuba, which has been considerably strained since 1961, has started showing results.
Under Obama’s administration, new Cuban policy regulations have been approved by the Treasury and Commerce departments, which have helped the U.S. telecommunications industry to gain initial exemptions from the existing embargo to invest in Cuba.Yesterday, Sprint Corp.’s prepaid service division – Boost Mobile – launched an unlimited voice call and text message service plan to enhance connectivity between U.S. inhabitants and their friends and family in Cuba.Starting as low as $50 a month, the plan – “Cuba Monthly Connect” – will allow Sprint’s customers in Miami to connect calls to Cuba without a long-term subscription contract. With its latest service, Sprint is primarily targeting nearly 2 million Cuban-Americans who are mainly residing in Florida. To get into the details, the new plan will cost $50 per month against which the subscribers get lowest per minute rate of 33 cents for the first 15 minutes. Thereafter the standard rate of 99 cents per minute will apply. Subscriber will also enjoy unlimited texting to Cuba.Sprint will also donate $10,000 to Roots of Hope, a non-profit organization with a mission to empower the youth of Cuba. Last month, U.S.-based IDT Corp formed a venture with Cuba’s Empresa de Telecomunicaciones de Cuba SA to provide direct international long-distance service.This latest truce between U.S. and Cuba will allow U.S. telecom carriers to export telecom equipment and products to Cuba. The operators will also be able to establish the necessary infrastructure in Cuba to offer various telecom services including the Internet.The export of communications devices, related software, applications, hardware, and other items to upgrade the systems will enable Cuban citizens to communicate freely with the U.S. and the rest of the world.Cuba is predominantly a less developed country with a population of around 11 million. At present, only 5% of the inhabitants have free access to global Internet connection through government institutions, high-end hotels and the black market.Near about 23.2% people access the Internet under highly restrictive conditions. The government of Cuba strictly monitors global networks, keeps a check on phone connections of anti-government activists and also surveys private email accounts through the installation of software in offices.
Such stringent measures have significantly escalated the price of telecom gadgets and services in Cuba. The price of an average personal computer is as high as $700 while an hour of Internet connectivity may cost 20% of the average minimum monthly salary of an individual in the country.Earlier, T-Mobile US Inc. had stated that it will always look forward to promote open telecommunications as U.S. policy evolves for Cuba or any other country. However, telecom behemoths Verizon Communications Inc. and AT&T Inc. are yet to comment on the matter.We believe that in the long-term, Cuba may become a boon for U.S. telecom operators. An opportunity to sell products to 11 million customers is something to reckon with. Further, with the Communist rule is quickly losing its control and wind of globalization is spreading across the world, Cuba may well become an emerging market in the future. Finally, Cuba’s geographical proximity with respect to the U.S. is a major positive in terms of cost of operations.