First U.S. telecom company connects directly with Cuba

HAVANA, 6 Mar.  The first U.S. company to strike a long-distance deal with Cuba since the Obama administration announced a telecom opening toward the island is now handling direct calls to Cuba.

“Now we can terminate and make calls directly to Cuba,” said Bill Ulrey, vice president of investor relations for Newark, N.J.-based IDT Corp. Previously, U.S. carriers couldn’t make direct calls to Cuba and had to use a non-U.S. carrier for the final connection.
IDT reached agreement with Empresa de Telecomunicaciones de Cuba (ETECSA), Cuba’s national telecom provider, to exchange international long-distance traffic in February, and the Federal Communications Commission gave IDT the green light for the deal earlier this week.

IDT began doing business with ETECSA on Wednesday.The telecom opening, which was announced in December as part of the White House’s plan to renew diplomatic relations with Havana, allows U.S. companies to sell personal communications equipment in Cuba as well as work on projects to improve Cuba’s outdated Internet and telecom infrastructure.

At this point, it’s unclear how far the Cuban side is prepared to go with the telecom opening but developments are starting to percolate on both sides of the Florida Straits. Cuban officials say they’re ready to work with U.S. telecommunications companies.
“We confirmed we’re ready to receive U.S. telecom companies to explore business opportunities — business that could be of benefit to both sides,” Josefina Vidal, the Cuban Foreign Ministry official heading the Cuban delegation, said after the first round of U.S.-Cuba talks in January. Rivkin said the bureau has already received a lot of feedback from U.S. companies.

“This is a potential opportunity for them; there is interest,” he said. “We’re really just beginning the process.” The company currently charges 83.3 cents per minute for a retail land-line call to Cuba and 76.8 cents per minute for a call to a cellular phone using its Boss Revolution app. New rates haven’t been announced yet.
IDT also will be able to sell its interconnection service to other U.S. carriers that provide service to Cuba. Ulrey said the agreement helps IDT get its foot in the door.

Eventually, it would like to offer the same telecom and payment services in Cuba that it provides in other Latin American countries. Among its services are topping up a prepaid phone, which allows someone in the U.S. to go online and transfer minutes prepaid in U.S. dollars to a friend or family member abroad.

Since the president’s Dec. 17 announcement, Cuba has temporarily cut the the price at state-run Internet cafes from $4.50 an hour to $5 for two hours and 16 minutes. That price is good until April 10. The government also has said that it plans to open more than 100 additional Internet cafes this year.
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