Despite New Norms, Cuban Telecom Space Still Remains Monopolised

U.S. sanctions on Cuba are deterring American firms from exploring its telecommunications sector even as Washington seeks to expand internet access on the Communist-run island, according to the final report of a U.S. government task force released on Tuesday. Chinese companies dominate Cuba’s telecoms sector, a status quo “worth challenging given concerns that the Cuban government potentially obtains its censorship equipment from Chinese Internet infrastructure providers,” the report said.

Cuba’s government protested the U.S. State Department’s creation of a Cuba Internet Task Force last year as “foreign interference.” It remains unclear how open it would be to U.S. investment in the strategic telecoms sector. “U.S. companies informed the subcommittees they are often deterred from entering the market due to uncertainty caused by frequent changes to U.S. regulations concerning Cuba,” according to the task force, convened last year by the State Department.

U.S. presidents have successively tightened and loosened the decades-old U.S. trade embargo on Cuba imposed in the years after its 1959 revolution. Former President Barack Obama created a loophole for U.S. telecommunications companies to provide certain services to Cuba. His successor, Donald Trump, maintained the loophole but tightened the broader sanctions, worsening the overall business climate. Banks are increasingly reluctant to process payments originating in Cuba. Some telecoms firms surveyed by the task force said that was putting them off offering key services and products in the country.

The task force advised the U.S. government to clear up the regulatory uncertainty and seek feedback on how to improve telecoms firms’ ability to invest. Until 2013, the internet was largely available to the public in Cuba only at tourist hotels amid the U.S. embargo, lack of cash and concerns over the free flow of information. The government has increased web access in recent years, installing a fiber-optic cable to Venezuela and introducing cyber cafes, Wi-Fi hot spots and mobile internet.

Cuban telecoms monopoly ETECSA signed a deal earlier this year with Alphabet Inc’s Google on increasing connectivity, but the two have not publicly agreed on any significant investments.