The first U.S. company to strike a long-distance deal with Cuba since the Obama administration announced a telecom opening toward the island is now handling direct calls to Cuba.
Previously, U.S. carriers couldn’t make direct calls to Cuba and had to use a non-U.S. carrier for the final connection.
IDT agreed with Empresa de Telecomunicaciones de Cuba, the island’s national telecom provider, to exchange international long-distance traffic in February, and the Federal Communications Commission approved the deal last week.
IDT began doing business with the Cuban company on Wednesday.
The telecom opening, which was announced in December as part of President Barack Obama’s plan to renew diplomatic relations with Havana, allows U.S. companies to sell personal communications equipment in Cuba, and to work on projects to improve Cuba’s outdated internet and telecom infrastructure.
Meanwhile, a U.S. delegation led by Daniel Sepulveda, the State Department Bureau of Economic and Business Affairs’ coordinator for international communications and information policy, will go to Havana this month to meet with their Cuban counterparts.
The goal is to “see what’s possible from their standpoint,” said Assistant Secretary of State Charles Rivkin.
Cuban officials say they’re ready to work with U.S. telecommunications companies.
“We confirmed we’re ready to receive U.S. telecom companies to explore business opportunities — business that could be of benefit to both sides,” Josefina Vidal, the Cuban Foreign Ministry official heading the Cuban delegation, said after the first round of U.S.-Cuba talks in January.
Bill Ulrey, vice president of investor relations for Newark, N.J.-based IDT, said that in the short term there won’t be significant savings for customers because IDT will still be competing in the direct interconnection business with other, non-U.S. companies.
The company now charges 83.3 cents per minute for a retail landline call to Cuba and 76.8 cents per minute for a call to a cellular phone using its Boss Revolution app. New rates haven’t been announced yet.
IDT also will be able to sell its interconnection service to other U.S. carriers that provide service to Cuba.
Ulrey said the agreement helps IDT get its foot in the door. Eventually, it would like to offer the same telecom and payment services in Cuba that it provides in other Latin American countries. Among its services are topping up prepaid phones, which allows someone in the U.S. to go online and transfer minutes prepaid in U.S. dollars to a friend or family member abroad.
Young Cubans are “hungry” for better telecommunications, said Rep. Anna Eshoo, D-Calif., after returning from a House delegation trip to Cuba last month. “They understand the power, and the empowerment that comes with the tools that come about as a result of broadband.”
Only an estimated 5 to 25 percent of Cubans have any type of internet service.
“I’d love to come back and see 95 percent penetration,” said Eshoo, the ranking Democratic member of the House Communications and Technology Subcommittee.