Cubans will have to wait until 2010 for Internet access

Fernanda Mello Veiga, from ovum.com

Last week, the Cuban government announced that ordinary Cubans will not be allowed to have Internet access in the short term, even though the government authorised ordinary citizens to buy computers and own mobile phones on 1 April 2008. After last month's announcement, we were hopeful that Fidel Castro's brother, Raul Castro, would be keen to break the communications and digital divide in Cuba.

Currently, Cuba has an estimated fixed line penetration of 10% and some 200,000 computers connected to the Internet for a population of almost 11.5 million inhabitants.However, the situation is more complicated than it seems, due to economical and technical constraints, as well as the United States embargo against Cuba. As Cuba has not yet privatised or liberalised its telecoms market, political decisions directly affect the telecommunications sector.

As well as the difficulty in obtaining Internet access, there are also content restrictions on what Cubans can access. Raul Castro is not willing to invite Carlos Slim (owner of Telmex/America Movil) or Cesar Alierta (Telefonica S.A. CEO) to participate in the privatisation of state-controlled company Etecsa, or to award them licences to operate as alternative telecoms operators. We believe that these two groups would be very interested in investing in the country and therefore increasing their Latin American regional coverage.

However, Raul Castro will stick to Fidel's plan to improve Cubans' connectivity through state-owned assets, sharing similar ideas with Venezuela's president Hugo Chavez, who re-nationalised Venezuelan incumbent CANTV in March 2007.

In January 2008, Venezuelan state-owned telecoms operator CVG Telecom and Cuban company Transbit announced that they had formed a joint venture - Telecomunicaciones Gran Caribe - to build a 1,552-kilometre submarine fibre-optic cable connecting Venezuela to Cuba and some other Caribbean countries (Jamaica, Haiti, Curacao and Trinidad), completing rings of submarine fibre-optic cabling. The cable is expected to run from La Guaira in northern Venezuela to Siboney in the eastern province of Santiago de Cuba. Ordinary Cubans will have to wait until 2010 - when the submarine cable is expected to be ready for service - even though Cuba has been officially connected to the Internet since 1996.

Considering Cuba's low purchasing power and the government's manipulation of information, we are slightly sceptical as to whether prices will be kept sufficiently low to enable ordinary Cubans to afford Internet connections.

The good news came yesterday when US president George Bush decided to soften the 50-year US embargo against Cuba, allowing Americans to send mobile phones to Cuba as gifts, and even mentioning that US non-governmental organizations could offer computers to Cuba. Sending mobiles and computers is a good start, as the price of these devices is one of the biggest obstacles to improving penetration rates. It is also worth bearing in mind that the population will still have to pay an activation fee (e.g. $120 for mobile) and monthly fees, which are still very expensive for the average monthly salary of $20. It seems that even the US president is willing to help Cuba to break the digital divide. However, it is now up to Raul Castro to allow handsets and computers to reach the population.