Cuba's state-run telecom giant, ETECSA, has unveiled its strategy to start charging for its services in foreign currencies. During a press briefing, Tania Velázquez, the CEO of the organization, disclosed that only 10% of the company's revenue comes from foreign currency, yet prices have remained unchanged. This situation forces the company to maintain the network and settle international debts.
Velázquez emphasized, "We understand that these services are meant for widespread public use and enjoyment. However, sustainability is a pressing issue that extends beyond just importing technology; it also includes paying for international connectivity. Failing to do so could result in debt or legal challenges."
"We are compelled to adopt measures to boost revenue from abroad," she continued, "although these efforts have not been particularly successful, mainly due to the 1x24 exchange rate gap and various fraudulent activities on some platforms that directly harm our company."
The executive noted that following the currency overhaul in 2021, the 1x24 exchange rate was maintained, making prices more affordable. This is linked to an announcement by Prime Minister Manuel Marrero last December in the National Assembly, where he revealed that ETECSA would be launching new service packages in foreign currency, offering additional services not currently available.
Marrero stated that the aim of this initiative is to attract foreign currency, as domestic currency packages have decreased in popularity since their introduction. Velázquez acknowledged the quality issues with Internet access, attributing them to financial constraints and inadequate investments, while mobile traffic continues to rise.
"Revenue from abroad is crucial for improving service quality and expanding connectivity," she affirmed, highlighting the need to "make decisions to reclaim the existing market." She assured that "the population will continue to enjoy services in national currency, but we need to find ways to monetize and sustain them," explaining that "this is not a publicity stunt, but a necessity to make services sustainable. ETECSA sustains itself through its own services."
Finally, Velázquez clarified that these solutions will extend beyond mobile services to other market sectors, including new economic players. "Following the Prime Minister's statement in the National Assembly, we are working on creating the conditions to implement these changes, and once ready, they will be communicated appropriately. It is important for the public to understand the reasoning behind these decisions."
Understanding ETCSA's Foreign Currency Strategy
Why is ETCSA implementing foreign currency payments?
ETCSA is introducing payments in foreign currencies to increase revenue from abroad, maintain its network, and pay international debts. This move is also aimed at improving service quality and expanding connectivity.
How does the 1x24 exchange rate affect ETCSA's revenue?
The 1x24 exchange rate has made domestic prices more affordable, reducing the popularity of services offered in foreign currencies. This has limited ETCSA's ability to generate revenue from international markets.
What challenges does ETCSA face in improving its services?
ETCSA faces financial constraints and insufficient investments that hinder its ability to enhance Internet service quality. Additionally, fraudulent activities on platforms and the exchange rate gap complicate revenue generation.