Tuesday, August 18, 2009

Etecsa gets the message

Has someone been scratching out the Laffer Curve on the back of an envelope in Cuba’s communications ministry?

Cuba’s phone monopoly Etecsa has already cut activation fees for cell phone service to attract more subscribers (from 120 convertible pesos to 60 last December to 40 last June).

Now, to get more Cubans to call outside, Etecsa has cut rates charged to residential customers for international phone calls to one dollar per minute. This experimental rate is in effect until December 15. Reuters coverage here (Spanish), AP’s here.

Like the lower hotel rates for Cubans and the lower prices in hard currency stores, these moves by Etecsa will serve to soak up hard currency liquidity among Cubans. That helps state enterprises, and benefits Cuban consumers too. Let’s hope the idea continues to catch on.

3 comments:

Anonymous said...

"... these moves by Etecsa will serve to soak up hard currency liquidity among Cubans" abroad. Gusanos of the World you have nothing to loose but your cash! It's a great deal. A US$1 call to Miami can generate hundreds of dollars in remittances that can be used to pay for your revolutionary family's vacation in Varadero! What a deal! There may be no free lunch as Milton Friedman said but that doesn't mean that you have to get stuck with the bill.

Vecino de NF

Fantomas said...

Like the lower hotel rates for Cubans

Who pays for this hotel rooms , the regular cubans in Cuba who earn dollars working there or the cuban exile community abroad

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