Last week, the administration moved to end more than 50 years of isolation and reestablish diplomatic relations with the island nation. While the highest profile ramification of that long isolation is the country's cars - which are stuck in a very cool time warp - it is reasonable to assume that the telecommunications infrastructure also needs upgrading.
Cuba will get its makeover, if its government allows. In its statement on Cuba, the administration said that only about 5% of the Cuban population is online. The United States, the statement said, will authorize the “commercial sale of certain consumer communications devices, related software, applications, hardware, and services, and items for the establishment and update of communications-related systems.”
The statement also said that “[t]elecommunications providers will be allowed to establish the necessary mechanisms, including infrastructure, in Cuba to provide commercial telecommunications and Internet services, which will improve telecommunications between the United States and Cuba.”
In other words, a more or less greenfield market of more than 11 million people about 90 miles from Florida is soon to be open for business. Taken as a whole, the market is bigger than the Greater Boston market (a bit more than 8 million) and Chicagoland (just under 10 million). Cuba, in short, is a big prize.
How will the upgrading of Cuba unfold? Will the government welcome in American telecom and cable companies? If so, precisely how will these companies be allowed to work with the existing providers, such as Empresa Telefónica de Cuba (ETECSA)? What role will be played by the vendor ecosystem?
Beyond the regulatory and business arrangements, it will be interesting to see what infrastructure approaches will be used. Cuba obviously is a developing economy, which suggests that the focus may be on wireless access. However, it is only about 90 miles from the U.S. mainland, with deep ties between the native population and Cuban émigrés in the States. Does this suggest a heavier emphasis on a wireline approach than if the island was thousands of miles away?
During the next few months, the initial move by the Obama administration will be formalized into a series of steps forward in Washington and Havana. It will be fascinating to watch.