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BY ANA RADELAT—Cuba received more than $214 million from U.S. telephone companies last year, according to documents released by the U.S. Treasury Department — making the payments a bigger source of foreign exchange for Cuba than sugar, and nearly as big as cigars. The phone payments are also a clear indication of how much Cuba could benefit from expanded telecom-munications links with the United States.
“That’s a huge chunk of change, considering the limited amount of traffic the island allows,” said Enrique Lopez, a global telecom consultant and chief of Miami-based AKL Group.
Lopez said Cuba has only 11 phones per 100 inhabitants. International traffic is often limited by the Cuban government, he said, whenever there’s an “event” in Cuba, such as rumors of Fidel Castro’s death or a new report of a crisis in his health.
Yet U.S. carriers earned at least as much as Cuba did from the traffic—and probably much more—since Cuba’s share of the income is capped by U.S. law. Most phone traffic between the two countries originates in the United States, by exiles calling their families in Cuba.
The number of long-distance calls between Cuba and the United States has steadily increased since the 1992 Cuba Democracy Act allowed U.S. telecom companies and the Cuban state phone monopoly to enter into agreements to open direct communications lines.
The $214 million Cuba received from U.S. telephone traffic in 2008 is a huge increase from the $54 million it earned from those fees in 1995—the first full year contracts were in place between U.S telecom firms and Empresa de Telecomunicaciones de Cuba SA (Etecsa).
Initially, AT&T provided most of the long-distance service, but other companies, including Sprint (now Sprint Nextel) and MCI Worldcom, (now Verizon Business) also signed contracts to provide direct service.
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Sprint’s Taylor wouldn’t say whether his company would take advantage of Obama’s opening. AT&T and other companies also declined comment.
U.S. Telecom Payments To Cuba
TLD de Puerto Rico
Sprint Nextel
Telecom New Zealand*
Verizon Business
Tata Communications*
iBasis Inc.
LD Telecommunications
2008 payments. Source: U.S. Treasury Department.
*U.S. subsidiaries