With the first phone call between U.S. and Cuban presidents since the Cuban revolution, the process for normalizing the relationship between the two nations began this week. Harold Trinkunas, a researcher at the Brookings Institution, suggests that as restrictions on travel and trade with Cuba begin to ease, there could could be new opportunities for Cuba’s emerging middle class. Plenty of American companies are no doubt keen to enter a new market.
In the technology sector, a way to measure the potential of the Cuban market is to ask: How many people have even a land line, like the one Raul Castro used to chat with Barack Obama on Tuesday?
The answer: There are 1.21 million lines for a population of 11.25 million.
Cuba Compared to Similarly Populous Nations
According to the CIA World Factbook, Cuba ranks 68th among the countries of the world in landlines, 79th in Internet subscriptions, and 149th in cellphones. (Interestingly, one of the other few remaining self-styled socialist nations—North Korea—has about as many cellphones as Cuba, albeit with twice the population.)
The room for growth, then, is huge. But don’t expect it to happen overnight. Clifford Shultz, a Loyola University Chicago business professor who has researched Cuba’s infrastructure prospects, compares Cuba’s situation to that of Vietnam in the 1970s. “The government will act conservatively at first, but they’ll realize the Internet—or fax machines, in Vietnam’s case—are a good thing,” he says. (Full disclosure: Shultz is my uncle.)
And American companies shouldn’t expect an easy stroll into a new market: Lots of other countries have already made large investments in Cuba—such as the deep-sea cable hooking the island up to more reliable Internet access from Spanish telecoms giant Telefonica. “We’re the last on the outside looking in,” says Shultz.
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