ETECSA
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 it 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.”
References:
Etecsa Will Start Charging for Some Services in Dollars Inside Cuba