Empresa de Telecomunicaciones de Cuba in its worst ever state; saddled with worthless Cuban pesos
Cuba’s national monopoly telco, Etecsa (Empresa de Telecomunicaciones de Cuba) is chronically starved of the foreign currency which it needs to buy telecom infrastructure equipment, such as cables and network hardware. Etecsa only has Cuban pesos, which are completely worthless outside its borders. No company in any other country will accept pesos in payment for anything.
Translating Cuba, which has translated and published a 14ymedio article in English, we have learned that the state-owned telco has been fined by the government for failing to spend its entire 2024 peso budget, even though it tried to do so. The island’s network operator had already told the authorities that it had underspent by many millions of pesos because no foreign company will accept them in payment either for goods or services.
The proposed solution was to designate the underspent cash as profit and then divide it up between Etecsa employees, but the Cuban government objected, fined the telco, and sequestered the cash.
To prevent the scenario from being repeated this year, Etecsa is preparing new payment methods for its services to collect as much hard currency as it can.
“Several scenarios have been evaluated, and so far the one that seems the best is to limit the number of recharges in national currency for the same customer. When he gets down to a certain monthly amount, he will have to recharge in dollars,” clarifies the administrator. “Together with the recharges from abroad, the purchase in Cuba will be enabled, directly in dollars or with a Classic card.”
“What happens now is that mobile phone customers sometimes have thousands of pesos left and can buy as many navigation packages as they want. They can even make transfers of that money so that others can buy a connection package. It will remain limited, because there’s not much Etecsa can do with that Cuban money. It’s worthless for investments and purchasing infrastructure.”
“We are just now restructuring everything, and that is one of the reasons why we are removing some monthly offers of recharges with a bonus, because there are many customers whose relatives abroad buy the recharge for them, which includes a balance and a recharge package, but then they resell it to others who pay them in Cuban pesos, and these in turn buy new navigation packages. We even know that many relatives send them dollars, and they change them on the black market and buy the packages in national currency. So Etecsa doesn’t earn foreign exchange and can’t go on like this because this is a telecommunications company and has to earn a lot of money.”
“We are tying pieces of cables together to repair the breaks,” one Etecsa employee told 14ymedio, adding that the company is going through “the worst crisis since its creation.” As a result of the foreign currency crisis, in 2022 the telco was unable to “fulfill its financial commitment to Nokia,” the island’s mobile data infrastructure supplier.
For the 2025 budget, the Minister of Finance and Prices, Vladimir Regueiro Ale, has warned that a “special tax on telecommunications services” will be implemented. According to the owner, “this will generate a tax in addition to the invoices from the Cuban Telecommunications Company of more than 13 billion pesos,” a sea of national currency for some dollar-thirsty coffers. That sounds like a lot, but it’s currently the equivalent of $542m and it’s useless Cuban pesos…That won’t help Etecsa which is in its worst ever state, unable to make basic repairs or replace the batteries that power mobile network sites.
“There are no land lines to replace, we lack the boxes for home installation, and there are also many problems with supplying cables.”
The lack of liquidity has been taking its toll on Etecsa for years, especially with its foreign investors. In 2022, for the first time in 15 years, the company could not fulfill its financial commitment to Nokia, the Finnish company that has worked on the Island implementing the data service for mobile telephony.
References:
Etecsa Will Start Charging for Some Services in Dollars Inside Cuba
Telecom data traffic in Cuba grows 10% due to COVID-19; Free access to EnZona e-commerce platform
What’s the real status of Internet access in Cuba?
Cuba-Google agreement to speed up Internet access on the island
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Congratulatory Message by ETECSAʹs Executive President
“I avail myself of this opportunity that in a few minutes we are participating in the event held in Santiago de Cuba to send lots of love to all the work groups that achieved the status of National Best Work Group and National Most Outstanding Work Group.
As National Best Work Group, we give the special recognition to the Territorial Divisions in Pinar del Río, Granma, Isla de la Juventud, Cienfuegos, Las Tunas and Santiago de Cuba; the No. 5 and No. 6 Government Care Directorates; the Eastern Territorial Division; the Telecommunications Centers in Cotorro and Buenavista in Havana and in Mariel Special Development Zone in Artemisa; as well as the Group of Havana; the Outside Plant Unit in the Western Territorial Division; the IT Department, in Cienfuegos; and the Call Centers (CAT, for its acronym in Spanish) both in, Jimagüayú, Camagüey, and in Guantánamo.
As National Most Outstanding Work Group, we congratulate the Western Territorial Divisions and Ciego de Ávila Territorial Division; the Project and Work Execution Division, the Network Operations Vice-presidency; the Telecommunications Centers in La Lisa, Marianao, Guanabo, Guanabacoa, Sierra de Cubitas, Santa Lucía, San Nicolás de Bari and Güines; the Eastern Work Execution Group; the Public Telephony Team in the South Territorial Division; the Outside Plant Unit in the Eastern Territorial Division; the Commercial Office in Holguín; the CAT in Águila, the Communications Ministry (MINCOM, for its acronym in Spanish) and Cotorro in Havana; the Wireless Networks Unit in Mayabeque; and the Access Networks Group in Villa Clara.
To these 38 work groups our sincerest recognition and strength to continue reaping rewards in this noble work of taking communications to the Cuban people. Let’s fight for keeping and improving our achievements!”
https://www.etecsa.cu/en/companies/news/congratulatory-message-etecsas-executive-president
Cuban state-owned telecommunications company Etecsa needs funds to invest in its network after reporting a loss of “hundreds of millions of dollars” in 2024.
“Although investments have been significant in the last decade, their pace of execution has decreased since 2022 due to the decrease in foreign currency income, directly related to the evolution of the illegal exchange rate,” the company said in a statement.
It added that various fraudulent activities have proliferated, enabling payments in dollars through websites located outside Cuba, “cloning Etecsa’s offers and then converting the payments into CUP [Cuban pesos], taking advantage of the currency exchange rate difference.”
“Despite the great challenges we face, our commitment is clear: to continue innovating and adapting to the needs of Cuban society and ensuring that every corner of our country is connected,” Etecsa CEO Tania Velázquez said on social network X.
Etecsa said it will carry out a series of commercial measures with the aim of increasing its foreign currency earnings to help it cover the investments it needs to make.
According to the company, more than 28,000 fixed-line telephone customers are experiencing service interruptions. It said the delays in resolving these problems are due to technological obsolescence and the lack of funds, as well as vandalism.
It also said that 50% of its 5,600 mobile radio bases lack power backup so interruptions in energy supply affect service quality. Some 10% of the radio bases also have faulty parts and components, which it has been unable to repair or acquire due to its lack of financial resources, it said.
Etecsa had 8mn mobile lines as of end-2024, of which 95% were enabled to access the internet, with 76% of devices in Cuba compatible with 4G.
As for the residential internet service Nauta Hogar, Etecsa said that it ended the year with 290,000 subscribers, with growth limited to just 30,000 users in the last four years.
Despite having plans to expand internet services to homes, including via fiber, the lack of available money resources has prevented the investments needed for both growth and network maintenance.
In a statement, Velázquez underscored that connectivity will continue to be prioritized for institutions in various sectors of social importance, such as scientific, educational and healthcare institutions, as well as for domestic trade, banking entities and others.
Velázquez stated that more than 4,000 initiatives have been carried out to provide connectivity solutions, including offering new services and increasing capacity for existing ones. However, over 2,200 actions remain pending due to financial constraints.
https://www.bnamericas.com/en/news/cuban-telco-etecsa-facing-investment-difficulties-due-to-big-losses-in-2024