MEXICO CITY – Nokia, AT&T and Verizon Communications are urging the U.S. government to ease rules that keep them from operating in Cuba even after President Obama loosened telecommunications regulations last year to promote democracy on the Communist island.
Nokia, the world’s biggest mobile-phone maker, is urging the U.S. to ease its 47-year-old trade embargo so it can sell handsets to Cuba. AT&T and Verizon, the largest U.S. wireless providers, urged regulators to make it easier for U.S. companies to directly connect calls to and from Cuba.
The companies’ pleas come after Obama said in April 2009 that greater contact with the outside world would reduce Cubans’ dependency on President Raul Castro’s regime. Still, other regulations prevent companies with U.S. operations from entering the market, according to a July report by the Washington-based Cuba Study Group. “We don’t understand why the regulations stopped where they did,” Jose Martinez, head of government relations for Latin America at Nokia, said last month from Miami. “There doesn’t seem to be a desire at the bureaucratic level to change the rules to allow cell phones.”
Cuba has the lowest mobile-phone penetration in Latin America. As recently as 2008, about 20,000 to 30,000 people, mostly foreign diplomats and senior officials, owned mobile devices. That number has grown to 800,000 since Castro lifted a ban on most people owning them, the Cuba Study Group says.
AT&T and Verizon may be interested in setting up roaming service for U.S. customers who visit the island as a first step into Cuba, said Jose Magana, a senior analyst at Pyramid Research in Cambridge, Mass.
The country of 11.4 million people could become the largest telecom market in the Caribbean, topping Puerto Rico’s $1.6 billion market, Magana said. If the market remains mostly closed, annual revenue could still reach $400 million by 2013 from the current $80 million, he said.
Magana said roaming service in Cuba wouldn’t have a measurable effect on earnings for AT&T or Verizon.
Obama, in an April 13, 2009, memorandum lifting travel limits to Cuba for Cuban-Americans, directed the U.S. to allow companies to provide communications services to the island, saying it would “decrease dependency of the Cuban people on the Castro regime.”
In practice, little has changed, as companies wishing to operate in Cuba risk violating sanctions still in place, said Christopher Sabatini, policy director of the New York-based Council of the Americas business group. These include the 1992 Cuban Democracy Act that prohibits investment in Cuba’s telecommunications network.
