Raul Castro allows Cubans to possess mobile phones

Details: Category: Trends & Forecasts; 29 April 2008; 10170 views

Cubans are now able to buy mobile phones. They can now use pre-paid systems to make both national and international calls. This is the first time that this has been possible in Cuba and reflects a limited programme of economic liberalisation which Raul Castro is authorising, not least in ending bans on electrical consumer goods...

Response has been enthusiastic, as potential customers have crowded the Detaxa telecoms shop - ironically still state-owned - which is stocking the mobiles. Physical crowding is not just a sign that mobiles are in demand as customers are prepared to go to great financial lengths to buy their mobile. The line will cost US$100, US$30 more than the actual phone itself. When the average wage in Cuba is put at around US$20 per month it is obvious that customers are very keen purchasers.

One factor is the Cuban diaspora, ie, relatives of Cubans who now live abroad and who can send the necessary money (one is tempted to ask whether acquisition of foreign capital and currency is really behind the move). In fact, there had already been a loophole in the system, whereby Cubans had arranged for foreigners to take out pre-paid mobiles and then allow Cubans to use them. It is clear that the new regime was not happy with the previous ownership pattern: government workers and foreigners only.

Overall, the change has been welcomed, not least by those relying on the "foreigner" loophole, as they can now use their mobiles legally. Customer feedback has ranged from: "It is an advance, like other things happening in Cuba now" through to one customer who was worried about the ratio of mobile expense to his wage: "It is a very good measure, but what we earn does not correspond to the price."

Certain implications will have to be resolved, One is in the apparent clash between allowing Cubans to make international calls but still imposing very strict restrictions on Internet usage. Then there is the role of the local cellular operator, Teléfonos Celulares de Cuba (Cubacel), which runs a 900 MHz GSM network. Will this be allowed to remain a monopoly or will competition be allowed? Cubacell, incidentally, is owned by Telecom Italia's mobile arm despite Cuba being a Spanish-speaking company and despite the recent success of Spain's Telefonica in Latin America.

And then again, who will manufacture the Cubans' handsets? A Cuban company or companies? Players from Communist countries? Or will the market be thrown open to any company? Will the USA relax its embargo on Cuba and allow US companies to tender? Cuba will be a very interesting market, to put it mildly. Remember those articles Developing Telecoms published about the sub-US$30 handset? We can't see the US$70 handset surviving for long.

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