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U.S. Telecoms Eager to Break Into Cuba, but Much Will Depend on The

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U.S. Telecoms Eager to Break Into Cuba, but Much Will Depend on The Vol. 17, No. 5 May 2009 www.cubanews.com In the News U.S. hopes to resume migration talks as Air charters booming Obama weighs new Cuba policy options New Cuba travel rules boost traffic for 7 BY ANA RADELAT The U.S. official said the Obama administra- Miami charter airlines ..................Page 6 he next change President Barack Obama tion is also “looking at a number of other op- will seek in U.S. policy toward Cuba is the tions,” but he said those policy changes are on 2 new gateways? T return of biannual talks that were discon- hold pending a positive Cuban response to tinued by President George W. Bush, a senior Obama’s steps to ease sanctions last month. Tampa and San Juan lobby for direct char- administration official has told CubaNews. The president lifted all restrictions on Cuban- ter flights to Cuba ..........................Page 7 The hoped-for resumption of serious dialogue American travel and remittances, and opened would be sought from Havana without precon- the door for U.S. telecommunications compa- Newsmakers ditions, the official said, noting “we are interest- nies to provide Cuban citizens with new phone, ed in resuming talks on counter-narcotics and Internet and TV services (see story below). Washington immigration lawyer and Cuba migration, and that could be done pretty soon.” Now the administration is debating whether activist José Pertierra fights to put ‘terror- The meetings between top U.S. and Cuban to follow up by easing restrictions on Americans ist’ Luís Posada behind bars ........Page 8 officials ended when Bush took office in 2001, who want to visit Cuba for cultural and educa- in response to pressure from embargo support- tional purposes. Bullish on food sales ers who warned they would lead to greater Ending travel restrictions within the United cooperation and possible rapprochement. States on Cuban diplomats in Washington and ITC sees huge potential for U.S. food ex- Conducted alternatively in New York and New York also is under consideration. ports to Cuba, but only if travel, financing Havana, the discussions were a product of mi- Since 1996, when the Cuban Air Force shot restrictions are eliminated ..........Page 10 gration agreements between President Clinton down two small, exile-piloted Brothers to the and Fidel Castro. Those accords were negotiat- Rescue planes, travel for Cuban diplomats has ed after the last rafter crisis brought thousands been restricted to a 25-mile radius of their mis- Party climbers of Cubans to the United States in 1994. See Obama, page 4 Cuba’s Communist Party names new lea- ders ahead of next Congress ....Page 11 U.S. telecoms eager to break into Cuba, Hot on Holguín Exile flights could pump cash into Frank but much will depend on the fine print País International Airport ...........Page 12 BY LARRY LUXNER That experience has proven useful for Escalona, 11,236,099 and falling uban-born Jorge Escalona is no stranger who for the past two years has advised U.S. to the island’s telecom industry — having telecom firms how to do business with Cuba. Cuba’s population shows slight drop for Cliterally grown up in the middle of it. “Last summer, Hillary Clinton came to Miami third year in a row .......................Page 14 “We were the first country in Latin America to and said that if elected president, she’d allow introduce the electromechanical switch. I know Cuban-Americans to travel to Cuba, and let U.S. Saving the oceans this because my father installed that switch,” he companies upgrade telecommunications equip- told CubaNews recently. “It was one of the few ment,” he said. “It was a significant recognition Experts meet in D.C., urge joint US-Cuba places in Havana that had air-conditioning. of the role telecom could play in the improve- marine conservation effort .........Page 16 When I was a kid, I used to go there on week- ment of relations between the two countries.” ends and read my comic books.” That’s why Escalona wasn’t too surprised A divided people Escalona’s dad was engineering director for when President Obama announced Apr. 13 that the Cuban American Telephone Co., then a sub- he’d let U.S. entities participate in fiberoptic and Survey shows Americans remain deeply sidiary of ITT. No wonder the young man grew satellite links to Cuba as well as license roaming polarized on embargo issue .......Page 19 up with a passion for telephony — or that he agreements for cellphones on the island. ended up as a top executive with AT&T, broker- Radio and TV satellite firms may also soon CubaNews (ISSN 1073-7715) is published monthly ing multimillion-dollar deals in the Virgin provide services directly to Cuban citizens. by Luxner News Inc. © 2009. All rights reserved. Islands, Puerto Rico and eventually Mexico. Yet the nation’s telecom giants — AT&T and Subscriptions: $429 for one year, $800 for two years. Part of his job involved making contractual Verizon among them — don’t have much to tell For editorial inquires, please call (301) 452-1105 CubaNews about this potential bonanza. or send an e-mail to: [email protected]. agreements with Cuba’s state phone monopoly, Etecsa, over international long-distance service. See Telecom, page 2 2 CubaNews ❖ May 2009 says 8,000 people signed up for service with willing to sell its shares to Telefónica. The two Telecom — FROM PAGE 1 its mobile subsidiary, Cubacel, within 10 days European telecom giants have been talking “At this point, we’re still reviewing what the of ownership restrictions being lifted — since December 2008, when Telecom report- changes would mean for business,” said Jon despite $60 activation fees and prices of 50-60 edly asked $780 million for its stake in Etecsa, Taylor, a spokesman for Sprint Nextel. “Until cents a minute for calls in a country where the and Telefónica countered with $500 million. we know a little more about what it actually average worker earns only $19 a month. Last year, Il Sole said Telecom Italia’s hold- ings in Cuba had dropped in value from $329 means, we’re not in a position to talk about it.” TELEFÓNICA EYES TELECOM’S 27% OF ETECSA Added Fletcher Cook, a spokesman for million in 2005 to $297 million in 2007. No fig- AT&T: “We’re looking at the proposals, but Etecsa also operates just over one million ures were readily available for 2008. beyond that, we don’t have any comment.” fixed lines, giving Cuba a fixed-line density of According to the Miami Herald, “industry Jon Gieselman, senior VP at DirecTV, told 11 per 100 inhabitants — quite low by region- observers suspect that a possible future relax- the Miami Herald:“We will look at any al standards. As for the Internet, Cuba has ation of the U.S. trade embargo against Cuba change in U.S. policy very closely, and should just 11.6 users per 100 inhabitants, compared and the interest in Cuba’s telecommunica- a new market opportunity arise in Cuba, care- with 21 in Mexico and 73 in the United States. tions industry expressed by Mexican mag- fully consider our options.” Since Obama’s announcement, interest in nate Carlos Slim [owner of América Móvil] CubaNews couldn’t reach Verizon for com- Etecsa itself has intensified dramatically. have sharpened Telefónica’s appetite.” ment at all. Nor could we get a hold of Atlantic On Apr. 28, the Italian business newspaper Escalona said he doubts Etecsa will have Tele-Network Inc., a Massachusetts-based Il Sole 24 Ore reported that Spain’s Telefónica trouble meeting its objective of adding anoth- conglomerate with telecom holdings in Guy- had offered to buy Telecom Italia’s 27% inter- er 250,000 wireless subscribers in 2009 — ana, Bermuda, various New England states est in the Cuban phone monopoly. especially if it continues to slash activation and the U.S. Virgin Islands. Telecom hasn’t made as much money in fees and introduce more affordable handsets. Cuba as it expected, said the newspaper, citing Those goals will be further helped by the DIGICEL EAGER TO OPERATE IN CUBA TOO Spanish financial sources — which is why it’s Obama administration’s recent elimination of But David Hall, former CEO of Digicel Jamaica and now a private telecom consult- ant, said Obama’s new policy “fantastic” for College kids launch ‘Cells 4 Cuba’ phone drive both the United States and Cuba. “This is obviously the first step,” he told us group of Cuban-American college stu- into roaming agreements with the Cuban by phone from Kingston, Jamaica. “The next dents and young professionals are government. thing that needs to be done in order to bring Asending a steady stream of used cell- Washington will also allow U.S. citizens to down costs will be the laying of fiberoptic phones to Cuba in an effort to link people on pay these companies for services used by cable between Cuba and Miami.” the island to each other and to the world. residents of Cuba. According to Hall, who’s traveled to the The group, Raíces de Esperanza, hopes As of earlier this year, only 500,000 or so communist island several times, “Cuba is now that recent steps taken by President Obama cellphones were active in Cuba — translat- the 4th-most expensive country in the world to allow U.S. telecom firms to operate in ing into the lowest mobile penetration rate in to call from the States. That’s partly because Cuba could provide a boost to their nascent the Western Hemisphere. of the embargo, but also because all the mobile phone campaign.
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