Cuba’s Phone Company: Who Are the Real Owners?

Fernando Ravsberg*

El desarrollo de las comunicaciones en Cuba es escaso, existen pocos teléfonos y menos conexiones de internet.

HAVANA TIMES — At the dawn of the industrial age, some workers destroyed machines in an attempt to halt the growing unemployment of the times. They were moved by the mad hope that they could put a stop to technological development and return to the past.

I remembered this story when I read a public announcement made by ETECSA, Cuba’s only telephone company, complaining about the allegedly “fraudulent” competition it is subjected to by new Internet communications technologies and platforms, such as Skype.

There are of course enormous differences between the two situations: the workers were looking after their children’s food, while the Cuban company seeks to protect its monopolistic privileges, the same one that allow it to set extremely high prices in exchange for deficient services.

Prohibitions place huge limitations on development. For years, Cubans were denied the use of privately-owned cell phones. The same thing is happening with the Internet today.

Cuba is an island but its people aren’t so isolated so as to be ignorant of the fact that international phone call rates are among the world’s highest. We could even say they are the highest everywhere, if we set them against the average wage in the country.

A 10-minute call to Europe costs a Cuban their entire monthly salary and 1 hour of Internet use is equivalent to what they earn in a week. With these prices, it comes as no surprise that the phone company isn’t exactly cherished in Cuba.

Cubans, however, are practical folk. Instead of wasting their time registering official complaints, they have found an alternative they can afford. Today, there are houses in many neighborhoods where people can call abroad at reasonable rates.

My acquaintances asked me not to reveal any details, but the fact of the matter is that it is done over the Internet and it is quite efficient. A call to anywhere around the world costs US 20 cents, that is to say, many times cheaper than what ETECSA offers.

Everyone in the neighborhood knows who runs these private phone locales but no one reports them to the authorities because even members of the Communist Party and the Chair of the local Committee for the Defense of the Revolution (CDR) have relatives living far from home who they call every so often.

Internet rates continue to be sky-high: an hour at a Cuban cybercafe costs US $ 4.50.

In its communiqué, ETECSA claims it is a foreign conspiracy aimed at undermining the company’s income, but the truth is that these private service providers would not survive a day without the complicity of the general population.

Perhaps they’ll proceed to clamp down on 3 or 4 of these private phone locales, but they will inevitably resurface, just as the machines destroyed by workers were replaced with ones that were even more modern.

Any war against development and the spread of technology is doomed to failure. To seek and halt its advance with secret plans, repressive measures and prohibitive prices is like trying to put out a fire by spraying it with gasoline.

It shouldn’t be too hard to do things a different way. In other countries, there are many telephone companies that have survived the challenges posed by the Internet and they have done this by charging infinitely lower prices. It is merely a question of efficiency.

If ETECSA is a “socialist State company”, it belongs to all Cubans and, as such, citizens have a right to know its finances and where the enormous profits it must secure through its extremely high service prices go.

Internet continues to be a mere promise for Cuba’s young.

It would positive for the company to tell people how much money it makes, what percentages are destined to financing the expansion of its Internet and telephone services or trips abroad, and how much of a “deficit” it has because of misappropriation and corruption.

Greater transparency could help improve the company’s image. It would allow people to know what obstacles it faces and what development plans it has, and to have a sense of where the money coming from customer pockets is ending up.

The fact is that, till now, the company’s communiqués and the declarations made by its managers are fairly cryptic: they do not establish any schedules, do not specify the amounts invested or outline the company’s plans or future objectives.

It is as though they do not realize they are merely employees and that, when they approach citizens, they are addressing the true owners of the company, those they must answer to in full, particularly as regards how their money is being spent.

9 thoughts on “Cuba’s Phone Company: Who Are the Real Owners?

  • Just plain wrong.

  • If Fernando suddenly had to serve on the body that sets the Cuban national budget, I wonder how he would meet the needs of citizens?

  • What citizen has asked to be put into the position of waiting for the old, very old, establishment to make decisions on their behalf that affect them so greatly. As my Cuban friends always say, we don’t want the 1/4 pound of chicken they sell us cheaply every month, we want to be paid for our work so we can have la plata to decide. Walter is still living in his socialist fantasy.

  • So how do a couple of guys like Fidel and Raul, who have held government jobs for the last half century amass more than $700 million to buy a 27% share in ETESCA? The book is yet to be written that would surely fly off the shelves as to how and with whom these thieves have likely socked away billions in ill-gotten wealth.

  • Pre-revolution, the Cuban Telephone Company was 100% owned by an American corporation. The didn’t rob anybody or seize any property. The invested the capital and built the system from the ground up. In 1959, the Revolution seized control of it.

  • What’s clear is that the monoply company goes against the interests of 99% of Cubans and that the lack of accountability with its finances and services only benefits those who run the show and those that can suck off it. Having competition isn’t necessarily the answer in itself (many readers will disagree with me on this) but public accountability of such an important “socialist” monopoly would be a good start towards improvement. To me that’s the main focus of Ravsberg’s article.

  • Haters must lie. Before the revolution, the phone and many other utilities in Cuba like the US today, were owned by individuals. They conspired to make as much profit and pay the least taxes. They didn’t care about the public then and don’t now. Only massive citizen action has broken the monopolies in some countries and demanded a socially regulated set of fees and profits. Fernando seems to be ignorant of the actual economics of capitalist states and the war time state of Cuban economics. I agree and most citizens worldwide would agree that both transparencies and competition (regulated and honest) can be good, but maybe not in the midst of warfare.

    If Fernando suddenly had to serve on the body that sets the Cuban national budget, I wonder how he would meet the needs of citizens? I will not assume he is motivated by hate and really wants better services for (all) Cubans, not just young people with phones. But, I urge him to check out the complicated facts on how communications companies and citizens are in struggles worldwide. Sometimes the citizen wins, sometimes not.

    For example, here in the US citizen pressure on the companies making huge (non-transparent and very corrupt) profits, to supply elderly and poor citizens with emergency phones for free. A good thing even if of very poor quality and limited to local calls. If the budget in Cuba could afford to both feed the elderly and provide internet services, I say why not? Elderly people benefit from both.

    And please don’t insult all our intelligence by repeating the fantasy that Fidel “owns” a percentage of the phone company. As a retired government leader and still contributor to the dialog and future of Cuba, he should be protected and provided with services, but not at the astronomical levels of the 1 or even 5% in the US or most other anti-social-ist countries.

  • It is ironic that Fernando would title his post this way. It is common knowledge that the Brothers Castro are the de facto owners of the Cuban telephone company. Beyond the significant percentage they own outright, as head of state (and eternal head of state), their roles in government, official and unofficial, put them completely in control of ETECSA.

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