Yahoo Finance Verizon to Offer Direct Roaming Wireless Services in Cuba
Verizon Partner Solutions, a division of U.S. telecom behemoth Verizon Communications Inc. VZ recently entered into an agreement with Cuba’s state-run telecommunications company Empresa de Telecomunicaciones de Cuba (ETECSA) to offer direct roaming mobile interconnection services between the two countries.
Notably, in Sep 2015, Verizon became the first U.S. telecom operator to offer roaming wireless services in Cuba. The service charges $2.99 per minute for voice calls and $2.05 per Mb for data. The user must add Verizon’s Pay-As-You-Go International Travel facility to his/her wireless handset to enjoy the roaming service while travelling in Cuba. This service is offered through the network of Vodafone Group Plc. VOD.
President Barack Obama’s decision to normalize U.S. diplomatic and economic relations with Cuba, which has been considerably strained since 1961, has started showing results. Under his administration, new Cuban policy regulations, which have been approved by the Treasury and Commerce departments, helped the U.S. telecommunications industry to gain initial exemptions from the existing embargo to invest in Cuba.
In Nov 2015, Sprint Corp. S signed the first direct roaming wireless service agreement with ETECSA. Meanwhile, in Apr 2015, Sprint’s prepaid service division – Boost Mobile - launched an unlimited voice call and text message service plan to enhance connectivity between the U.S. and Cuba. Starting at as low as $50 a month, the plan allows Sprint’s customers in the U.S. to make calls to Cuba without a long-term subscription contract.
In Mar 2015, U.S.-based IDT Corp had formed a venture with Cuba's ETECSA to provide direct international long-distance service. In this regard, it is worth mentioning that Reuters recently reported that AT&T Inc. T is looking for a mobile roaming agreement with ETECSA during President Obama’s upcoming visit to the country. Obama will be the first U.S. president to visit Cuba after a gap of 90 years. The trip is officially slated for March 20-22, 2016.
We believe, in the long-term, Cuba may be a boon for U.S. telecom operators. An opportunity to sell products to 11 million odd customers is something to reckon with. Further, with the waning of communism and the winds of globalization spreading all over the world, Cuba is poised to become an attractive emerging market in the future. Moreover, Cuba’s geographical proximity to the U.S. is a major positive from the cost of operations standpoint.
Verizon currently carries a Zacks Rank #3 (Hold).
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