Verizon signs direct connection agreement with Cuba

An advertisement for Verizon is seen at Times Square in New York, May 12, 2015.

Reuters/Shannon Stapleton

A unit of telecoms multinational Verizon Communications signed a direct interconnection agreement with the Cuban state monopoly Etecsa, expanding on existing roaming services in the Caribbean country, Etecsa said in a statement on Monday.

Verizon last September became the first U.S.-based wireless company to offer roaming in Cuba, taking advantage of U.S. President Barack Obama’s move to open relations with a former Cold War adversary of the United States.

Rival Sprint Corp in November signed the first direct roaming agreement with Etecsa.

The U.S. trade embargo of Cuba remains in place, but the Obama administration issued new regulations a year ago shortly after detente that allow U.S. telecommunications companies to do business with the Cuban state.

Under the embargo, phone calls between the United States and Cuba have mostly been completed through third-party countries, adding expense and reducing quality. Text and data services only became available to U.S.-based users with the Sprint and Verizon deals last year.

Etecsa said it reached a deal with Verizon Partner Solutions after an undisclosed period of negotiations.

“The service agreement will initially allow the offering of voice services through direct interconnection between the two countries and will be operational once implementation and technical testing requirements are completed by both companies,”Etecsa said.

While most of Obama’s commercial opening to Cuba has focused on the small but growing private sector in the Communist-governed country, the White House also allowed deals with the state-owned telecommunications company, saying it would benefit ordinary Cubans.

The Cuban government responded quickly in signing deals with Verizon and Sprint, while it has yet to allow its private sector to import farm implements or construction materials, two other areas of trade that Obama has permitted through regulation.

(Reporting by Daniel Trotta; Editing by Bernard Orr)