14ymedio, Marcelo Hernandez, Havana, 23 March 2017 — The mobile telephone market is changing at a speed that leaves little time to get used to new models. In Cuba, this dynamism is mostly seen in the informal networks, where the Chinese brand dominates because of its low prices and the preference it receives from the government.
Since 2008, when Raúl Castro’s government authorized Cubans to have a mobile phone contract, the number of customers with mobile lines has skyrocketed. At the end of 2016, the Telecommunications Company of Cuba (ETECSA) had more than 4 million subscribers to its cellphone service.
However, the sale of the handsets in the state network fails to satisfy users, who complain of outdated models and high prices. To alleviate this situation, the black market is greatly supported by those who want to update their telephone technology.
ETECSA’s offices sell Huawei Y3 and Huawei Y520 for 80 and 85 CUC respectively; low-end terminals with limited features
ETECSA’s offices sell Huawei Y3s and Huawei Y520s for 80 and 85 Cuban convertible pesos (CUC) respectively. Catalogued as low-end terminals with limited features, these devices are an option for those who can’t afford more complex models such as Huawei P7, which the company sells for a whopping 472 CUC (roughly the same in dollars — about two years’ average salary in Cuba).
“I use it to connect to wifi and make videocalls with IMO,” Havier Morales, a technology student who owns a Y520 told 14ymedio. The young man emphasizes that the front facing camera, which is the one that is most used to talk with this application, is not very good quality, “but for the rest it’s an all-terrain phone.”
In the ETECSA office located in the Miramar Trade Center complex, an employee who preferred to remain anonymous offered more details. “We sell a lot of these models to teenagers who can’t afford a more expensive device and also to people who want to use it to connect to the internet,” she says.
The employee acknowledges that “the competition is tough, because street prices for mobile devices have dropped a lot,” and informal sellers frequently offer their merchandise outside the office. “They sell phones with cases, extra batteries and high-capacity micro-SD cards, so they have more attractive offerings than we do.”
Huawei holds 17.2% of the Chinese market and is now the leading mobile producer in that country. Outside its borders, for example in Spain, where in 2016 the Chinese company provided 21% of the smartphones sold in that country, the company has been very successful.
In late 2015, the company founded by Ren Zhengfei, who worked as an engineer in the Chinese Army, signed an agreement with the Cuban state monopoly to market smartphones on the island
In late 2015, the company founded by Ren Zhengfei, who worked as an engineer in the Chinese Army, signed an agreement with the Cuban state monopoly to market smartphones on the island and to improve voice and data services. The agreement includes the purchase of “parts, pieces and technical training,” according to a report at the time from the Cuban News Agency.
In 2000, Huawei obtained a contract to install the national fiber optic network. The Chinese company’s equipment is also used in wifi hotspots and in the newly opened Nauta Home service that provides internet access from homes.
The presence of Huawei on the island goes back more than fifteen years, according to Javier Villariño Ordoñez, sales director for the Chinese firm. In its relationship with state entities, it emphasizes “negotiating on the basis of mutual protection,” the businessman told the national press.
Official media has widely covered the company’s presence, while they have ironed out the scandal that enveloped the firm for some months because of a security hole in its code that sent client information to China. The problem was detected in other very popular brands in Cuba, such as ZTE and BLU.
The Washington-based human rights organization Freedom House has followed a number of allegations about the close ties between Huawei and state power in China and warns that security and human rights issues have been linked to the business.
In an open letter from Miami addressed to ETECSA, the Foundation for Human Rights in Cuba stated its disagreement with the agreements between Havana and Huawei, a firm that “has a long history of supporting closed societies by improving the ability of your government to censor the Internet. ”
In the middle of last year it was learned that US authorities were investigating Huawei for its business with Cuba, Iran, North Korea, Sudan and Syria
In the middle of last year, it was learned that US authorities were investigating Huawei for its business in Cuba, Iran, North Korea, Sudan and Syria. Its Chinese competitor, the telecommunications company ZTE had already been sanctioned for the same reason and fined 1.2 billion dollars.
However, the brand continues its expansion in the Cuban market. “Before we sold more Samsung but now a lot of customers prefer BLU or Huawei,” Rosa Ileana, an informal seller who sells smartphones from Panama and the United States, told 14ymedio. “Three out of four phones I sell are Chinese brands,” she says.
Her most frequent clients are “young people in high school,” but she also says that recently her products have been sold to “many older people who want to video-chat with relatives abroad,” from the wifi zones on the island.
The preferences are “a question of prices” but also because “as more people get a Huawei others also want to have one,” explains the seller. “A lot of it is word of mouth, if a device is recommended to you because of a long-lasting battery, stability and durability, then it’s more likely you’ll reach into your pocket and buy it.”