Informacion economica sobre Cuba

ETECSA, A Bankrupt Monopoly / Pablo Pascual Mendez Pina
Posted on November 21, 2013

That we are in a state of ruin is something that no Cuban in his or her
right mind really questions, though we have become all too accustomed to
the cynicism of the architects of this disaster, who continue to blame
the “Yankee blockade” for all the misery afflicting people.

As though this were not enough, it is appalling to see Havana overrun
with billboards and posters touting utopian slogans such as “Let us
fight for a prosperous and sustainable socialism.” And “Revolution means
never lying or violating ethical principles.” Or “Banish the fear of
looking for problems in fulfilling our duties.” One cannot walk even a
few kilometers to refill a mobile phone account, to wait in line in
hopes of resolving some bureaucratic issue or to file a complaint
without coming across a marquee announcing, “ETECSA, on line with the
What is obvious is that the state telecommunications monopoly, commonly
known as ETECSA, is no longer a public-private partnership with
financial backing from the multi-national telecommunications firm
Telecom, whose employees wore uniforms, drove a fleet of vehicles and
had access to spare parts in order to respond to the needs of its customers.

Some 85% of workers questioned believe that, ever since ETECSA fell into
the hands of GAE – a business arm of the Ministry of the Interior
(MININT) – it has become a kind of Cinderella. Innumerable
questionnaires indicate that it has also become known for its inefficiency.
Rolando Chapotín, a 70-year-old retiree from Vedado, describes how an
ETESCA employee fit together various bits of cable to fix a problem with
his landline. “It was obvious he did not have the parts he needed,” says
Chapotín, “but he worked hard to resolve the problem until fortunately
it was fixed. That young man made me forget about all the waiting in
line and arguments with bureaucrats. Now I would like to know where the
hell all the money that GAE takes in is going.”

To the question “Why does it take so long for ETECSA to resolve problems
that have been reported?,” a technician replies, “We don’t have the
vehicles, we don’t have the materials, we are short-staffed, wiring is
no longer well-sealed and whenever there is a downpour, the problems
multiply. There’s also a significant number of customers who have spent
three months waiting for their landlines to be repaired.” The technician
summed it up by saying, “ETESCA might be on line with the world, but not
so much with Cuba.”
From Moron to “Cuba Says”

The government sponsored website Cubadebate reported that this past
October a meeting of company directors from the eight eastern provinces
was held in the town of Morón. It was chaired by Mayra Arevich, an
engineer and the current chief executive of ETECSA. The goal was to
prioritize the handling of complaints from the public and to analyze
problems associated with mobile phones and landlines, services to which
only three million customers currently have access.

Hilda Arias, ETECSA’s head of mobile phone services, told those present
that there would be an increase in capacity of 270,000 just this year,
resulting in a growth of two million mobile phone lines, or the
equivalent of 18% of Cuba’s population.

According to anonymous sources a significant part of this increased
capacity is destined for use by the Revolutionary Armed Forces Ministry
(MINFAR), the Council of State, the Council of Ministers, the offices of
the Communist Party and other governmental organizations. These are
services to be paid for indirectly by private customers.

A recent installment Cuba Dice (Cuba Says) — an ongoing series broadcast
by Star Television News (NTV) in which official journalists solicit
opinions on pertinent topics from people on the street — raised the
issue of problems with telecommunication services.

As might be expected, 90% of respondents complained of punitive fees on
mobile phone and internet services, and the ludicrous 5 CUC mandatory
monthly charge for maintaining cell phone service.*
Other complaints involved overcharging to refill pre-paid cell phone
accounts, long lines at branch offices and retail outlets, and the
inability of local customers to take advantage of double-airtime offers
available to overseas customers.

However, the most pointed criticisms involved the refusal by officials
to increase the number of landlines and pay phones, restrictions which
impact the poor, who cannot afford the cost of mobile phone service.

In interviews company directors distanced themselves from the serious
financial problems facing ETECSA and its inability to made new
investments in infrastructure. They say that most of its income, which
is in the form of convertible pesos (CUCs), is spent just on subsidizing
local phone service.

“Mobile phone service in Cuba costs 2.50 dollars a month,” says Hilda
Arias, the aforementioned director of ETECSA’s cell phone services.
According to Arias the company is obliged to offer double-airtime
minutes to attract overseas customers due to the need for “fresh sources
of hard currency.”

Sniffing around

A former ETECSA director, who requested anonymity, stated that in the
1990s a Telecom vice-president informed his Cuban partners that his
company was willing to make the investments necessary to provide a
landline to any Cuban who asked for one.

“At the time international calls were the principal source of ETECSA’s
revenue and it was clear that increasing the number of domestic
customers would increase profits,” he says.

“The company’s Cuban partners, however, were strongly opposed and agreed
to only a modest expansion, with priority given to workers in healthcare
and education. Assigning the remaining increase in capacity was left to
the mercy of Revolutionary communities and organizations.
“Up till now,” says the former director, “Cuba has not even been able to
double the capacity it had in 1959, when there were eight landlines for
every hundred residents and it ranked 14th in the world in terms of
telephone coverage.”

In contrast the former director points to the case of neighboring Haiti,
which had a rate of phone coverage lower than that of Cuba. But because
landlines and pay phones were considered obsolete, it successfully
extended mobile phone service to nearly 85% of the population in a very
short period of time.
Asking not to be identified, a former MININT official stated, “One of
the justifications for slowing the growth of phone service in Cuba is
that there is a requirement that any increase in private telephone
coverage be augmented by an equivalent increase in the monitoring
capabilities of the CIN, MININT’s counter-intelligence branch. The
systems for telephone surveillance, known as K1 and K2, must have a
capability of 100%, as was the case in the former East Germany.”

According to this source, internet use is also under surveillance.
Monitoring, however, is not clandestine. State Security actually likes
citizens to feel they are being watched.

“ETECSA has become a military organization,” says an anonymous worker.
He is referring to the change in administrative structure under the
aegis of GAE. “Now the old branches are called divisions and other
department have been reclassified with names like Strategic Projects and

In spite of these changes, some ETECSA directors and workers are still
dipping their hands in the till. As is the case in any given part of
Cuba, corruption thrives in the absence of other financial incentives.
Sources indicate that one distinctive feature of ETECSA is that it is
the employees who previously worked at MINFAR and MININT who have proven
to be the most corrupt.

Some ETECSA workers admit to having been shocked when Miamir Mesa, an
engineer and former head of the company, was given a promotion and put
in charge of the Ministry of Communications after a notorious corruption
scandal which came to light in July 2010 involving Cubacell as well as
Logistica, a firm with ties to foreign companies.

During his tenure at ETECSA he used and abused “means of collateral
responsibility” for which company directors were called to account for
irregularities and misdeeds by their subordinates.

The client is never right

At the end of the October 25th broadcast of Cuba Says on NTV, a
constituent from the Carmelo people’s council in Havana’s Vedado
district — a man nicknamed “el Master” in reference to his level of
college education — made a statement.

“No one has yet explained to me why Cubans complain so much,” he said.
“A mobile phone contract costs 120 CUC but they have reduced it to 30. A
nation’s mobile phone system is not some trinket meant to be sold on a
street corner. ETECSA serves society and a society must work with the
resources at its disposal. Let’s be clear. Mobile phone and internet
fees are high but no one is taking money out of anyone’s pocket. We
might pay 4.50 CUC for one hour of internet time but we might also get a
surgical procedure for free that would cost $20,000 in the US.”

He added, “We Revolutionaries have not seen the need for an election in
fifty-four years. To those non-conformists who have left for other
parts, well, let them stay there.”

Pablo Pascual Méndez Piña

Diario de Cuba, November 18, 2013

*Translator’s note: The fee, roughly equal to five US dollars, is
equivalent to 25% of the average monthly salary in Cuba.

Source: “ETECSA, A Bankrupt Monopoly / Pablo Pascual Mendez Pina |
Translating Cuba” –

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