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Posted February 09, 2009 by publisher in Business In Cuba

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Mobile telephone use will remain limited and costly in Communist-run Cuba for the foreseeable future due to the need to subsidize their social use and ensure communications with isolated areas, a state-run newspaper said on Sunday.

The Juventud Rebelde (Young Rebel) newspaper quoted phone company Vice President Maximo Lafuente as stating there were 480,000 mobile phones in the communist-run country of 11.2 million people, of which the 30 percent priced in Cuban pesos accounted for 80 percent of the traffic and the 70 percent priced in hard currency accounted for 20 percent of traffic.

“The vast majority of cell phone traffic is subsidized by the state thanks to the income from cell phones functioning in convertible currency,” the newspaper said.

Juventud Rebelde said peso priced mobile phones are largely assigned to health, education, security and state administrative personnel, as well as to institutions and homes in isolated areas of the country.

“Lines assigned for social reasons account for just 30 percent of those in use, but account for almost 80 percent of the traffic,” Lafuente said.

“For this reason and to avoid congestion not only do we have to constantly invest to increase coverage, but have to limit the minutes assigned to social uses,” he added.

The paper also blamed U.S. sanctions for the situation.

The same newspaper on Saturday reported there were no immediate plans to open up Internet access to the general public, but reported there were more than a million users in the country largely through institutions, though it was not clear how many only had access to the government intranet.

Cuba’s failure to quickly adopt to modern communications technology at a reasonable price is a major complaint among citizens under 50 years of age and especially the youth.

Cuban telecommunications monopoly ETECSA is a joint venture in which Telecom Italia has a 27 percent stake.

Cuba has less than one fixed line telephone per 10 inhabitants and has slowly been adopting cell phones as a less expensive alternative in terms of state investment.

Cuban cell phone density is rated by the United Nations as the worst in Latin America and fixed-line density the sixth lowest.

Cubans are free to buy and use cell phones in a hard currency equivalent called convertible pesos at an exchange rate of 24 pesos to the convertible peso or CUC.

The state dominates the economy and the average state wage is around 420 pesos, or 18 convertible pesos, per month.

At the same time some 60 percent of the population has some access to hard currency through money sent them by relatives abroad, tourism tips and state bonuses.

A cellular telephone line costs 60 CUCs and the cheapest cellular phone is priced at 60 CUCs.

A minutes use of a cell phone calling out or receiving averages half a CUC or more than half a days state wages, while an up to 160 character text message costs .16 CUC to send.

New technologies to receive and send e-mail, access Internet and receive and send graphics do not exist.

Associated Press

Cuba’s telecom monopoly said Sunday that cell phone accounts have risen 60 percent to nearly a half-million since the communist government made private service available to ordinary islanders last year.

Once restricted to foreigners and Cubans with key state jobs, cell phones have been available to all Cubans since April, when President Raul Castro’s government lifted the ban.

The communist youth newspaper Juventud Rebelde reported in its Sunday edition that some 480,000 cellular lines are now in use, compared with 300,000 before the change.

The government recently lowered the activation charge to about $65 from $120 — half a year’s wages on the average state salary.

Most new cell users activated the service with money sent by relatives abroad, tips from tourism jobs or earnings from the island’s ubiquitous black market economy. Prepaid cards are used to place calls.

The government also has increasingly assigned cellular phones at highly subsidized prices to homes unable to receive regular phone service because of a deficit of lines.

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