What happened in Cuba when ETECSA, the state owned telecommunications company, announced it was going to increase its tariffs? According to the western media it sparked student protests and proved to be an embarrassment to the leadership. However, as Charles McKelvey explains this is nothing like the truth about the affair. While the Trump administration deals with protesters using the National Guard and rubber bullets, the Cuban authorities resorted to dialogue and conciliation to settle this dispute. Charles argues a peoples’ democracy is alive and well in Cuba.

The internet rate hike in Cuba

Fraud, student protest, and the assertion of people’s democracy

By Charles McKelvey *

On May 30, 2025, the Cuban Telecommunications Company (ETECSA) announced a change in its pricing structure. The new policy had been anticipated in the report on the national economy to the National Assembly of People’s Power by Prime Minister Manuel Marrero Cruz on December 18, 2024. The Prime Minister explained that the relevant committees of the National Assembly had approved a group of measures that were designed to stimulate more income in foreign currency for ETECSA, which needs foreign currency in order to sustain, improve, and further develop the Cuban internet system. He noted that sales of packages in national money will be maintained at the same prices, but there will be limits on consumption, with a different price established for those who want to consume more. There will be a group of packages available in foreign currency, he noted, designed to stimulate income in foreign currency.

The Prime Minister’s discussion of ETECSA was part of a larger report on the program of the government, which seeks to correct distortions and stimulate the national economy. The Prime Minister’s address to the National Assembly was broadcast on national television and received much attention from the press and the people.

The measures announced by ETECSA on May 30 established a price for deposits in ETECSA accounts (known as top-ups), which can be used to purchase cellphone telephone minutes or internet gigabytes. The new price announced will be 360 Cuban pesos for 6 GB, slightly lower than the previous price. Users are limited to one package per month at this price. Additional megabytes will be at a much higher price (3,360 Cuban pesos for 6 GB), or the user can wait until the following month. At the same time, international top-ups can be purchased without limit, as in the past, at a rate slightly lower than the current price.

The limit on domestic top-ups combined with unlimited purchase of international top-ups incentivizes Cuban families abroad to support their families in Cuba by internationally purchasing top-ups to ETECSA accounts, rather than sending money to Cuban families, who exchange the foreign currency for Cuban currency, and then use the Cuban currency to purchase a domestic top-up. The new measures, therefore, increase the capacity of ETECSA to capture foreign currencies, because ETECSA is paid in a foreign currency when international top-ups are purchased.

The incentivizing of international top-ups reduces one of the distortions in the Cuban economy. In most cases, when Cuban citizens receive remittances from abroad, they exchange it on the black market, rather than at a Cuban bank; and they then purchase domestic top-ups with Cuban pesos. Such domestic top-ups are really international top-ups, distorted by a currency exchange in the black market. Many Cubans use this maneuver because it is more economical. However, it has the effect of denying ETECSA the foreign currency to which it is entitled through the sale of international top-ups to a client abroad.

However, the directors of ETECSA, in implementing new measures, did not consult sufficiently with particular actors concerning the specifics, like students, academics, scientists, and health professionals, ensuring that their need for high consumption of data would be addressed. And they announced an immediate application for May 30, taking the people by surprise, inasmuch as the Prime Minister’s December address was long forgotten.

So, the May 30 announcements by ETECSA provoked a popular reaction, not only expressed on social media, but also by the leaders of the mass organization of students, the University Student Federation (FEU).

The first efforts to explain on Cuban television were in a technical language, which continued to stimulate dissatisfactions. Although they did not immediately calm the situation, explanations of ETECSA during a press conference and on the evening news program Mesa Redonda effectively addressed key relevant points.

On May 31, Tania Velázquez Rodríguez, Executive President of ETECSA, held a press conference. She declared: “We have received a large volume of doubts, opinions and expressions of dissatisfaction, derived from a lack of understanding about the scope of this measure. This is of deep concern to us, because our priority is to provide clear information to the people: to explain the reasons for its implementation, its implications and its scope. In addition, we are very attentive to all the opinions that have arisen.”

The measures were necessary, because of the economic difficulties that the company is facing. ETECSA has a high level of debt, Velázquez Rodríguez noted. The company is in an extremely critical situation due to a lack of foreign currency and a significant reduction in income in recent years. The telecommunications infrastructure is deteriorating, with constant interruptions in service. ETECSA offices do not have cell phones to sell. It has to pay in foreign currency for two submarine cables that provide a significant level of access to the internet. It has to pay in foreign currencies operators in other countries with whom ETECSA has agreements. For years ETECSA could rely on income in foreign currencies, but such sources of income have been reduced considerably.

There is a need, Velázquez Rodríguez declared, to inject foreign currency into the company, which would enable ETECSA to recover rapidly from the current situation. In order to sustain current contracts, ETECSA needs approximately 150 million dollars annually.

Fraud has emerged as a serious problem during the last three or four years, the President asserted, generating a drastic erosion of the income of the company.

We have lost more than 60% of the income that came from outside the country. The official distributors of the company are not being used as they were in previous times. We see in social media, for example, announcements of top-ups and of promotions by ETECSA, but they are not made by official distributors. The money is retained in other structures outside the country, and the top-ups are done in Cuban pesos in national territory. This is a model that has changed completely the behavior of the flow of income to our company, and it has impacted directly the critical situation that we have at this moment.

The phenomenon of fraud is the reason why ETECSA did not announce the measures in advance. The ETECSA President asserted it was not possible to announce in advance, because it would have generated a group of actions and certain operations, which would have affected the process.

The measures, the ETECSA President declared, are not improvisations. They are the result of a thorough analysis. ETECSA has dedicated considerable time to studying alternatives and looking for solutions. As was noted in the last session of the National Assembly, the loss of foreign currency income affects not only ETECSA; insufficient capturing of foreign currency is a general problem in the country. The figure of 6 GB was not arbitrary; it was determined on the basis of a detailed study of the consumption of data, which led to the understanding that the great majority of clients would be able to maintain their habits of connection, without significantly affecting their access.

Velázquez Rodríguez stated that, in consideration of the criticism, the directors of ETECSA recognize that

…we have not been effective in communicating the measures. We have been meeting today with various organizations, including students, youth groups, the University Student Federation and the Union of Communist Youth. We have listened to all that they have to say, and some very interesting ideas were expressed. Such interchanges did not begin today. We have been meeting for some time with the Ministry of Superior Education, seeking to design a system that would enhance the connectivity of students. We hope to be able to make some concrete decisions in the next days and to report on the Mesa Redonda of June 2.

On June 2, Velázquez Rodríguez announced on the Mesa Redonda program that, as a result of dialogue with representatives of university students, ETECSA has decided to permit a second purchase of 6 gigabytes for 350 Cuban pesos, thereby enabling the purchase of 12 gigabytes for 720 Cuban pesos. In addition, ETECSA will increase free access to informational and educational sites that are beneficial for public health and science. Furthermore, an intermediate plan of extra data, beyond 12 gigabytes per month, will be available for less than the price in the previously announced plan.

Velázquez Rodríguez asserted that she has gone to various centers and institutions, listing to the expressions of dissatisfaction with respect to the new measures. She met with organizations like the University Student Federation and the Union of Communist Youth, seeking a workable resolution. A consensus has been reached with respect to these two organizations, and ETECSA is continuing the dialogue with other institutions, such as the ministries of Education, Higher Education, and Health, among others. “We have been discussing the content of the measures as well as the way the measures were communicated. We will continue the dialogue, and the interchanges will inform our next steps.”

One of the participants in the June 2 Mesa Redonda program was Ricardo Rodríguez González, National President of the University Student Federation (FEU). Along with other members of the leadership of FEU, he sustained telephone conversations with the President of the National Assembly of People’s Power and members of the Central Committee of the Communist Party of Cuba. On May 31, FEU met with the ministers and heads of other organisms. The dialogue, he declared, was characterized by mutual respect. He emphasized that all has been done in a respectful manner, with the purpose of seeking the best solutions for the country and for the university sector. He pointed out that the students have expressed concern that sectors opposed to the Revolution have been taking advantage of the situation, seeking to manipulate the needs and concerns of the students with the intention of generating a political confrontation and fomenting division among Cubans.

Indeed, in spite of the consensus attained, social media actors outside the USA continued to try to create inflammation over the theme, trying to stimulate student opposition outside the democratic channels represented by FEU.

On the June 2 Mesa Redonda program, Ernesto Rodríguez Hernández, interim Minister of Communications, reviewed the history of internet connectivity in Cuba. He observed that when Cuba was first connected to the Internet in the 1990s, service was slow and costly, and it was attained via satellites. In those difficult conditions, the orientation was to emphasize the connectivity of social and scientific sectors that contributed to the progress of the country. As a result of that priority, all the universities and 47% of the schools have access, although with technical difficulties. In the health sector, the majority of hospitals, research centers, and polyclinics have internet connectivity. Since 2014, the international bandwidth has expanded from 2.5 GB to nearly 500 GB.

The continuous development of the infrastructure enabled the launching in 2018 of mobile phone internet service, something that was very much demanded by the people. At the beginning, there were approximately 5.3 million mobile phones, and today there are more than eight million. In 2018, only a few thousand people had access to the internet by these means; today, there are more than seven million lines that have internet connectivity.

Eighty percent of ETECSA’s foreign currency income comes from international top-ups. The income from that service has in past years permitted ETECSA to develop projects and to finance the maintenance of the infrastructure. International top-ups to Cuban telecommunications accounts were initiated fifteen years ago in Cuba, and it is a common practice in the entire world.

The Minister of Communications emphasized that all this progress had a high cost, which is higher for Cuba than for other countries, because of obstacles imposed by the US blockade, which presents constant challenges to the continuous development of the telecommunications infrastructure. And he pointed out that, in recent years, the consumption of internet in Cuba has grown, while the income to ETECSA, which manages the communication system, has declined. In support of this point, the President of ETECSA noted that the company began 2025 with only 25% of the international top-ups that it had in 2021. We knew, she said, that the May 30 announcement was sensitive, but it was necessary to initiate the road toward recuperation.

Why has the income from international top-ups fallen in recent years? Velázquez Rodríguez further explained the factor of fraud. She noted that the Cuban telecommunications company suffers from all the factors that negatively affect the national economy. But in addition, there has been an increase in illicit top-ups from outside the country. On many occasions, the prices offered by illegal companies are more competitive than the official prices, which hijacked the flow of foreign currency to Cuba. The new measures seek to confront this fraud, and to redirect the flow of income to the company.

The Minister of Communications noted that the telecommunications industry requires constant investment. In Cuba at the present time, only 50% of users have access to adequate service, due to an inadequate infrastructure, which results in slow connections and interruptions in service. The users experience the deterioration of the service in their daily reality. In addition, Cuba has to pay for internet channels that are necessary for the consumption of content from outside the country, as well as channels that permit national contents to be available outside the country. And Cuba must have investments in new technologies, such as 5G and artificial intelligence. In addition, Cuba needs to continue developing its own platforms, in order to ensure its telecommunications sovereignty, especially in a situation in which several international platforms are restricted for Cuba.

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Final considerations

Some say that Cuba does not have a critical press. They are missing the logic of people’s democracy, in which the press has a different function. In people’s democracy, the press supports the Party and the government in the education of the people and the mobilization of the people in support of the nation and its various goals and projects (something sorely lacking today in representative democracies). Critique is provided by the mass organizations of workers, women, farmers, students, and neighborhoods, which represent the interests of these sectors, critiquing the decisions of the State. FEU is one of these mass organizations. Virtually all students become members of FEU upon their university enrollment, and they actively participate in monthly meetings and in other youth activities; its leaders are elected by the students, organized by areas of study.

Usually, the mass organizations carry out their role of critique through piecemeal recommendations of change, which commonly are incorporated, following substantial discussion and debate. This tendency toward non-confrontation generally prevails, because the State and its various ministries and departments are themselves a product of people’s power: the officials of the State are elected directly and indirectly by the people, in a sustained and decentralized process that is firmly rooted in neighborhood nomination assemblies.

In the case of the ETECSA tariff hike event, when students saw that new measures went against their practical needs, in spite of the fact that they were the result of the process of people’s power, they quickly expressed their concerns, doing so in an orderly and respectful manner. ETECSA quickly responded with dialogue and counterproposal that unfolded over three days, initiating a process of resolution.

How could ETECSA have misjudged the practical needs of the students and professionals? In my view, it was because they were so oriented to responding to fraud—which was crippling the company that they were duty-bound to stewarding—that they overlooked key details. They were focused on outmaneuvering the individualist moneymakers whose selfishness was undermining the people’s revolution. In this orientation, they were right. I give Tania Velázquez Rodríguez and her team an A+ for their attention to correcting the distortions provoked by the moneymakers and for their dignified response to the concerns of students and professionals.

FEU and the ministries all did what they were supposed to do. People’s democracy in Cuba is alive and well. Can the folks in the North say the same about their systems of representative democracy? What lessons should we draw from this?

*Published courtesy of Charles McKelvey. Please subscribe to his Substack: https://charlesmckelvey.substack.com/