Etecsa Will Start Charging for Some Services in Dollars Inside Cuba

The state communications monopoly has millions of pesos in cash but needs foreign currency to modernize

Etecsa has been fined for not using its whole 2024 budget of Cuban pesos

14ymedio bigger14ymedio, Natalia López Moya, Havana, 14 January 2025 — The Cuban Telecommunications Company (Etecsa) is trapped in a paradox. While it lacks foreign currency to invest in its deteriorated infrastructure, the monopoly has been fined for not using its entire budget in Cuban pesos allocated by the State for 2024. The national currency abounds in its coffers but is not good for buying antennas, cables or fuel.

“We were fined because last year’s accounting showed we had millions of unspent pesos,” Moisés, an Etecsa administrative officer at its headquarters in Old Havana, with his name changed for this report, told 14ymedio. “The problem is that there was no way to use them, because you can’t buy anything with pesos that you need to make repairs or new installations.”

Etecsa’s accounting department had already warned management that “there was a surplus with no time to spend it before the end of December,” the worker adds. “But there was no way to do anything with those millions of pesos, because no foreign company based in Cuba wants to accept them to buy equipment or pay for services. It’s money that is very difficult to get rid of.”

“The way they got rid of that money was to distribute it, as profit, among some of the employees”

“So we were fined, and the managers had to come up with something,” says Jorge. “The way they got rid of that money was to distribute it, as profit, among some of the employees. In other words, they spent the national currency not on investments but as wage incentives.” 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.”

“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”

Etecsa has not updated the exchange rate between foreign exchange and the Cuban peso – as the state exchange houses did almost three years ago – and continues to be governed by the obsolete rate of 1 dollar for 24 pesos. “For example, a standard recharge from the United States costs the emigrant between 20 and 23 dollars, and their relatives in Cuba receive about 500 pesos of fixed balance, plus the bonuses that Etecsa promotes at the time,” he explains.

“But that same amount of money paid in Cuba to a telecommunications agent or in an office is now equivalent to 6,000 pesos, enough to obtain up to 12 packages of 500 pesos each, and they can buy anything from telephone minutes to gigabytes of web browsing. That distortion cannot continue; no telephone company in the world can balance the books with the contradiction between the currency it charges and the one it really needs.”

The sudden increase in money in employee accounts, due to the hasty liquidation of last year’s budget, has not brought much joy to the workers, who have run into a new problem.

“I have to pay much of the money they gave me in personal income taxes,” explains Tatiana, an employee, also from the administrative area of Etecsa, but from the municipality of Playa in Havana. In addition to taxing wages, there is tax on the profits and incentives that state workers receive.

“People are upset because they know that this is not a prize nor something they gave us in recognition of so much sacrifice, but a last-minute trick,” the woman laments. “On the one hand they have given us that money, and on the other the working conditions are getting worse. At this time of year we are saved because temperatures have dropped, but in my office we have to bring our own fan to cool off because the air conditioning cannot be turned on.”

“There are no land lines to replace, we lack the boxes for home installation, and there are also many problems with supplying cables”

Etecsa’s financial limitations are not felt only in the work environment. In October 2022, this newspaper collected the testimonies of several workers who reported the lack of resources to undertake basic repairs in the fixed telephone network or replace the batteries of the telecommunications towers that, most of them obsolete, stop providing service when a power cut affects the area where they are located.

“We are tying pieces of cables together to repair the breaks,” explained José Ángel, a worker of the state monopoly. He said that the company was going through “the worst crisis since its creation.” The list of what was missing was long, and over the years it has continued to grow: “There are no fixed telephone devices to replace, we lack the boxes for home installations, and there are also many problems with the supply of cables. Even our mobility is affected by the lack of fuel.”

Most of the currencies they receive for top-ups from abroad are not invested in telecommunications infrastructure. “About 90% of what Etecsa collects comes out of the company in a large item with an ’undefined’ concept,” another employee linked to the accounting area and who preferred to remain anonymous told 14ymedio. “With the rest of what remains it is very difficult to maintain a quality service because you can hardly make large investments.”

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.

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.

Translated by Regina Anavy

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