The Obama administration eased Cuban embargo constraints Monday, opening the island’s marketplace to U.S. telecom companies.
The new policy authorizes U.S. telcos to establish satellite and fiber-optic links to Cuba and enter into roaming agreements with Cuban service providers. Satellite radio and television companies also benefit; they are now allowed to provide services in the communist nation.
Additionally, U.S. residents can now send a variety of devices to the country, including handsets, computers, software and satellite receivers. Americans can also activate and pay for telecom service in Cuba, as long as the service is provided by a U.S. or third-country company.
“[With] more than 11 million inhabitants, very few of whom have a cellular phone, Cuba would almost certainly be viewed as a very attractive new market for carriers,” says Chris King, senior analyst with Stifel Nicolaus Telecom Equity Research. “Names that immediately come to our mind as potential players would include America Movil, Digicel, Millicom, Verizon, AT&T and Sprint Nextel, among others.”
Digicel spokeswoman Antonia Graham declined to comment, as did Verizon spokesman Jeffery Nelson and Sprint Nextel spokesman John Taylor. AT&T spokeswoman Jenny Bridges said that while the company would certainly study the administration’s proposal, they could not comment beyond that point. Neither American Movil nor Millicom replied to requests for comment by press time.
King says many questions remain, including how the Cuban government would view these changes in U.S. policy. It is unclear whether the country’s communist regime will allow U.S. companies access into the country’s telecommunications market, as doing so would circumvent government controls. The Cuban government lifted its ban on the ownership of cell phones by private citizens only last March, and it’s estimated that just 8 percent of the population had a cell phone in 2007.