U.S. telecom firms may be able to do business in Cuba more freely now, but they'll have to compete against established European and Latin American firms.
The White House announced Monday that it would allow U.S. firms to establish fiber-optic cable and satellite facilities linking the U.S. and Cuba, allow roaming service agreements with Cuban service providers, and permit U.S. firms to do what is necessary to provide services to customers.
Experts say that a change in U.S policy doesn't translate to a new market overnight. The Cuban government needs to change its regulatory policies to allow U.S. firms to do business in the country. U.S carriers will also have to compete for access in Cuba, since other companies have already established businesses. Telecom Italia owns 27 percent of Cuban telecom company Etecsa, Venezula's government currently is deploying an undersea cable system to the country, and Telefonica was also a partner in a Cuban venture.
The upside for any carrier willing to persevere is access to one of the best opportunities in the region for future growth, given the low penetration of telecommunications services, be it broadband, wireline or wireless services. The ITU pegged the wireless penetration in Cuba at 1.8 percent in 2007 - the lowest in Latin America. The second-lowest country in the region, Haiti, had a penetration rate of 26.1 percent.
Growth in an open Cuban market is expected to be fueled by the country's proximity to the U.S. and a large Cuban-American population that will send more money to the island.
For more:
- Latin Business Chronicle on the implications of new Obama Cuba policy. Article.
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