A report by Cuba Siglo 21 attributes the decision to increase the tariffs to the military conglomerate Gaesa.
14ymedio, Madrid, 12 June 2025 — It’s not the “US blockade” that “strangles imports” or the “fraudulent websites” that divert international recharges, as the Cuban officials rushed to maintain. The reasons for the dramatic drop in revenues of the Cuban Telecommunications Company (Etecsa) that led to its decree on May 30 are, according to consultant Emilio Morales, three: the effects of the Ordering Task, the migratory exodus and the decline in tourism.
In a report published by Cuba Siglo 21 this Thursday, Morales breaks down the discourse of the State monopoly, which, “although in theory is proclaimed by the State to be a socialist enterprise owned by the Cuban people, in practice is another strategic undertaking under the hegemony and control of the Grupo de Administración Empresarial S.A. (Gaesa), the largest and most lucrative super corporation on the Island, which controls about 70% of the country’s economy and just over 95% of its finances.”
The text defends the university students, who have risen in protest against Etecsa’s price increases — the “tarifazo” — and are being harassed by State Security. Hence its title: “Transparency! The Cuban Students against the Mafia State,” as he describes Gaesa’s network, for having “appropriated the most lucrative national companies, their resources, and profits.”
Morales says that the price of 3,360 pesos for three gigabytes is almost three times the value of the minimum wage
Morales says that the price of 3,360 pesos for three gigabytes (GB) of navigation, established by the telecommunications monopoly as an “extra” to the restricted package of 360 pesos for 6 GB per month, is almost three times the value of the minimum wage (1,260 CUP) and “more than twice the pensions of tens of thousands of retirees.”
Etecsa justified the measure by referring to “a loss of 60% of income from abroad and the high indebtedness of the company,” but Morales offers additional explanations. “When the Government implemented the Task of Monetary Regulation (TOM), or the Ordering Task*, it began to market mobile phones in Cuban pesos at a lower rate than the packages sold in dollars abroad. However, the TOM boosted inflation, and the dollar exchange rate soared. On October 10, 2019, the dollar was traded at 1 x 24 Cuban pesos (CUP) and on May 9, 2024, it was traded at 1 x 395 CUP,, he says.
“At time it was very easy to change dollars on the street at a very favorable exchange rate,” he continues, and buying offers for refills in CUP proved to be very cheap. “This was one of the main factors that caused recharges from abroad to fall.”
Another factor was, he says, “the massive wave of migration that has rocked the country,” with more than one and a half million Cubans having left the Island, which has meant, for many, “a process of family reunification.” In other words, those who left were the ones who recharged the most.
“The roaming service charged to tourists visiting Cuba is another important source of revenue for Etecsa”
The third element is the fall in tourism, by more than half compared to 2019 figures, before the Covid-19 pandemic, which began a debacle from which Cuba has not yet recovered. Also, “the roaming service charged to tourists is another important source of revenue for Etecsa,” indicates Morales.
For the analyst, President of Havana Consulting Group, the tarifazo (price increases) has two fundamental objectives: “T0 increase, at the expense of the Cuban exile, the profits of one of the most lucrative financial channels of Gaesa, especially when its other revenues, through tourism and remittances, have fallen dramatically.” It also aims “to limit the ability to access information,” which contains the “potential for national communication of the Cuban population in the face of the real possibility that a spark will arise” that provokes a mass protest such as that of 11 July 2021.
The report insists that the true owner of the communications monopoly is the all-powerful military conglomerate. “The one who has the last word for Etecsa is not its managers or the Cuban State: it’s Gaesa.” In this regard, at the beginning of 2011, Luis Alberto Rodríguez López-Calleja, former son-in-law of Raúl Castro and now deceased, was then the head of the Business Administration Group and bought the shares held in Etecsa by the Italian multinational Telecom Italia, which had boosted mobile telephony since the 1990s, taking it out of the business.
Similarly, Gaesa took control of other entities with shares in Etecsa
Similarly, Gaesa took control of other entities with shares in Etecsa, such as the Panamanian Universal Trade & Management Corporation S.A. in 2013, which Morales describes as a “a front company commissioned by Fidel Castro,” and in 2016, the Banco Financiero Internacional.
Beginning in 2011, the consultant continues, when Raul’s reforms were approved that would allow a certain openness of the regime, the mobile phone sector grew exponentially. “It was not just the business of cell phones itself, but the number of services that would later be added, such as the Internet and roaming service for foreign visitors, to name the most important. General López-Calleja quickly saw that the telecommunications business was a gold mine that Gaesa should control. With Fidel Castro semi-retired, there was no obstacle in the way for him to take control of Etecsa step by step,” adds Morales.
He provides figures: in 2018, the amount collected for telephone recharges was 317 million dollars, and three years later, it had doubled (650 million dollars).
Etecsa, says the analyst, is not only a “tool of totalitarian control and repression,” which benefits all the “repressive organizations” and “is responsible for the Internet blackouts”; it is also the “tip of the business iceberg that controls Gaesa,” which, to top it off, “does not contribute to the treasury in hard currency.”
This company, says Morales, was created in Panama by order of Fidel Castro in 1978
Morales documents that Gaesa and its shareholders “steal the country’s wealth” with the affidavit of Cimex lawyer Mali Suris Valmaña, which appears in a lawsuit filed by the US oil company Exxon Mobil against the Cuban state corporation and Cupet. In it, Suris Valmaña indicates that she holds the position of secretary of the board of directors of both Cimex-Cuba and Corporación Cimex S.A., “a public limited company organized in accordance with the laws of the Republic of Panama.”
This company, says Morales, was created as a front in Panama by order of Fidel Castro in 1978. Then, he explains, “it was used for illegal trade operations and the transfer of dollars to Cuba. In 1995 it was established that this is the main company and the Cimex entities in Cuba are its branches, and the flow of money is reversed: it is extracted in Cuba and goes to private shareholders (“anonymous societies”) in Panama and from there to banks in tax havens.”
All this, states Morales, “was a lucrative possibility from 1993,” with the fall of the Berlin Wall and the Special Period, when dollarization began. The company thus served to capture foreign currency arriving in the country “through remittances, tourists and other channels.”
After summarizing the systemic crisis in which the Island is mired -“in total bankruptcy,” having lost its lines of credit, with its energy matrix “in ruins” and its manufacturing “obsolete,” or its health system “collapsed”- the report calls for transparency “not only for Etecsa, but for the criminals who are becoming rich today at the cost of growing urban misery.” And he predicts “almost certainly” that the “student insubordination” against Etecsa “will have consequences.”
“These protests began by being directed against the abuse of a company and have become in practice a greater understanding that Cuban citizens live under a mafia state where only the profits of an elite count and not national development or the needs of the population,” concludes Morales.
*Translator’s notes: The Ordering Task was a collection of measures that included eliminating the Cuban Convertible Peso (CUC), leaving the Cuban peso (CUP) as the only national currency, raising prices, raising salaries (but not as much as prices), opening stores that take payment only in hard currency, which must be in the form of specially issued pre-paid debit cards, and a broad range of other measures targeted to different elements of the Cuban economy.
Translated by Regina Anavy
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