Assessing #Cuba’s Appetite for ICT Transformation - Nearshore Americas

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Assessing Cuba’s Appetite for ICT Transformation
Exclusive research findings from Nearshore Americas recently presented at TIA’s Network of the Future.
Press Release, June 03, 2015

Nearshore Americas Managing Director Kirk Laughlin unveiled details of a major new Cuba ICT research study during the Telecommunications Industry Association’s ‘Network of the Future’ Conference, June 2-4, in Dallas, Texas.

As one of the least developed telecommunications markets in the world, Cuba is poised to enter into a period of ICT transformation – networking a population that is hungry to utilize the Internet and digital tools as a means to propel long-awaited economic prosperity.

Over the past 20 years, a gap has emerged between the country’s fixed-line telephone network and the level of Internet penetration. For example, the island of 11.2 million inhabitants currently has more than 1.2 million fixed-line telephones, but only 3.4% of Cubans have home Internet access. Despite the fact that Cuba’s state-run telecommunications monopoly began installing a fiber optic backbone across the eastern side of the island before 2003, and a submarine fiber optic cable from Venezuela to Cuba has been active since 2011, a large share of Cuba’s global Internet traffic continues to be transmitted by satellite. Unsurprisingly, the cost of accessing the World Wide Web is high in Cuba, and connection speeds are typically slow.

When Cubans do get online, their experience is fundamentally different than that enjoyed by web users elsewhere. Instead of a global Internet, many Cubans only have access to domestic intranet that allows them to check email, browse a stripped down encyclopedia inspired by Wikipedia, and navigate among a limited number of websites.

In an exclusive survey of more than 300 ICT professionals in Cuba conducted in May by Nearshore Americas, more than 45% of respondents reported accessing the Internet from work at a connection speed of 1Mbit or less; only 5% reported having a legally-authorized ADSL connection at their home. Predictably under these conditions, Internet usage on the island slows to a crawl on nights and weekends.


The Nearshore Americas report specifies why Cuba’s ICT market is poised for rapid modernization. The island possesses a large pool of IT talent, boasting a surprisingly wide range of technology and computing skill sets. Nearshore Americas’ survey results indicate the island has between 35,000-50,000 ICT professionals. Groups of software developers and tech entrepreneurs, many based in Cuba and some living abroad (thanks to looser restrictions on foreign travel enacted in 2013), are already hashing out plans to capitalize on a more open Internet in Cuba. Evidence is mounting that Cuba will become a viable hub for global technology and software export services during the next two to three years.

The effects of the December 2014 announcement to normalize U.S. relations with Cuba—the most significant international development involving Cuba in a generation—are just beginning to be felt. The White House’s plan will ease the sale of computer software and telecommunications equipment to Cuba.

As a result of these trends, pressure is mounting on Cuba’s telecom operator, ETECSA. Until now ETECSA has been a sacred cow of the Ministry of Communications, with a minority stake owned by a Cuban military contractor and banking entity. However, with market reforms underway, mobile subscriptions rising fast, and the end of the U.S. embargo removing a convenient foil, many at the Ministry of Communications recognize that ETECSA needs to expand Internet access and lower costs.

Given the pent-up nature of Cuba’s ICT market—the rare combination of low connectivity existing alongside significant IT talent—the country is poised to modernize faster than many expect.

To learn more about Cuba’s ICT outlook, visit TIA’s 'Network of the Future’ and attend the Cuba policy breakfast meeting on June 4, 2015. In addition, Nearshore Americas’ analysts are available for briefings on the Cuba report – which will be available for purchase in early July at: http://www.nearshoreamericas.com

Contact: Sean Goforth
Nearshore Americas
http://www.nearshorenexus.com
+1 (910) 512-7450