Before we begin to understand how any industry or company will perform in a country it is imperative that we understand its history, the political, economic and social landscape of the country and try to get a brief understanding of whatever changes that the country holds in its near and distant future.INTRODUCTIONLocated south of Florida, U.S.A one would wonder, what is the cause of such stark differences in the political landscape of the two nations. The first guess obviously would be “the Castro brothers” which might be true, but only to an extent. It would Cuba’s long history of civil strife and economic inequality that would result in an acceptance of socialism by its leaders and set the framework for what is one of the last remaining socialist countries in the world.HISTORYCuba over the year has seen many strifes and all of them have shaped the socio-economic and political nature of the country.The Spanish American WarThe War ended in 1898 with the treaty on Paris, after which Cuba formally gained independence from the US and became an independent country. With the US retaining the rights to intervene in the financial and foreign affair matters of Cuba.In 1924, Tourism became the primary industry of Cuba, driven mainly by the American owned hotels.From 1933-1959Post the great depression of 1929, the Cuban economy tried to recover but political unrest caused due to the corrupt presidential leadership of the likes of Batista, Grau and Socarras and then the return of Batista as a dictator from 1952.The Socialist RevolutionAs Fidel Castro took control of Cuba away from Batista, Cuba began to adopt a communist way of governance, the relations with the US government deteriorated as the Cuban govt began expropriating land back from US landholders, and signed a commercial agreement with the Soviet Govt during the peak of the cold war.Post Cold WarWith the collapse of the soviet govt came the the withdrawal of billions in subsidies that came from the soviets, that resulted in food and fuel shortages. This resulted in Cuba looking for allies in Peoples Republic for China, Bolivia and Venezuela.The Resignation and Death of Fidel Castro, Little Brother Takes OverWith Retirement of Fidel, reforms begin to take place, ownership of private phones and computers becomes Legal in 2008. With Raul Castro set to retire in 2018 possibilities of further reforms away from the communist ideology that the country is currently set in.P.E.S.T.L.E ANALYSISPOLITICAL AND LEGAL IMPLICATIONS ON THE TELECOM INDUSTRYTelecom industry forms a key part of commerce, the free flow of information becomes an important factor in deciding how well a country performs on a global scale.In 2008, the Cuban Government lifted the ban on citizens privately owning cellphones and this resulted for the first time citizens of Cuba having access to the outside world, with restrictions on travel also being lifted simultaneously.In 2012, with the embargo on the US Cuban relations being lifted, it became possible for American companies to actively impact the nascent telecommunication industry within Cuba. A slow process of laying Fiber optic cables, coupled with setting up satellite services and other telecom services was bound to help connect Cuba with the International community.In 2015 the FCC, USA gave permission to American companies to provide telecom services to Cuba without separate approval from the agency. This has aided the development of the industry with competition from both local and foreign players and bring down the costs which had earlier led to establishment of the black market for internet services.On December 17, 2014, United States President Barack Obama ordered the restoration of full diplomatic relations with Cuba and the opening of an embassy in Havana for the first time in more than 50 years. The new policies, approved by the U.S. Treasury and Commerce departments, have opened the way for U.S. telecommunications and technology companies to start offering services to the island.Cuba has taken some tentative steps to reinforce this optimism by improving internet access on the island. Over the past year, the government opened a number of new internet access points, which boast somewhat faster speeds and lower prices. For Cuba this progress in increasing access is historic, but it is still just a drop in the bucket when it comes to alleviating the most draconian restrictions on internet freedom in the hemisphere.ECONOMIC ENVIRONMENT IMPLICATIONS ON THE TELECOM INDUSTRYA planned economy run by the state, Cuba has an unhealthy ratio of 76:23, public to private sector employment with private sector employment being dominated by self employment and most of them being second jobs or retired personnel. As a result the monthly average wage of Cubans is as low as 25$. This Low level of income has in the past since 2008 prevented cubans access to internet and telephone hourly connection costs amounting to 10 percent of the minimum monthly wage. The economy was crippled by socialist reforms and nationalization of all private sectors which led to a pullout of all forms of foreign investment from the country. With the retirement of Fidel Castro, “Either we change course or we sink.”—?President Raúl Castro, December 2010became the defining words for the economy. Personal business licenses became popular and entrepreneurship began to be promoted by the Cuban Government.In 2012, Telecommunications monopoly Empresa de Telecomunicaciones de Cuba S.A., or ETECSA, offered prepaid cell phone contracts at a cost of 24 times the average Cuban worker’s salary (U.S.$20), ensuring that cell phone service would be too expensive for most Cubans. An average cell phone contract was about U.S.$120, or about a half-year’s salary. The company claimed that the high cost was necessary to improve the telecommunications system, despite the fact that the state owned company at the time, was partnered with mixed enterprises that operated with foreign capital from the Italian communications firm ITALCOM. In 2008 ETECSA stated it expected approximately 1.5 million Cubans to become cell phone subscribers over the next 5 years, and 2.4 million by 2015. As of 2013, ETECSA provides mobile service to just over one million mobile subscribers.Although mobile phone penetration is on the rise, and access to the high-speed internet provided by the new ALBA-1 fiber-optic cable was finally extended to citizens in late 2013 via the opening of new “cyber points” or “navigation halls,” ICT access remains limited. Even with reduced prices, public internet access points still cost US$2 per hour to use, which is equal to one-tenth of the average monthly wages. Even for those who might be able afford internet at new access points, the supply of internet access, mostly concentrated in the capital, is grossly out of proportion with the needs of a country of 11 million people. Out of a country of more than 11 million people, the number of computers are only a little over one million, and, of these, only about half have connectivity. (as of April’15) In March 2014, a new Nauta service was launched, which allows users to send and receive emails on their mobile phones but only with a .cu email account. The cost of the service (US$1 per 1Mb of data transfer) is taken from the mobile phone’s credit rather than from the balance of the users’ Nauta internet account. Despite the fact that users can only activate this service at four locales in Havana and that it is still very expensive, it is the cheapest option for email to date and quickly became popular, with over 200,000 people signing up within the first three months. SOCIAL IMPLICATIONS ON THE TELECOM INDUSTRYThe country has long ranked “as one of the world’s most repressive environments for information and communication technologies”, according to a Freedom House report. Rather than relying on the technically sophisticated filtering and blocking used by other repressive regimes, the Cuban government limits users’ access to information primarily via lack of technology and prohibitive costs. A special permit is required to use the Internet. Access to the Internet is heavily controlled, and all e-mails are closely monitored.The Cuban authorities have called the Internet “the great disease of 21st century” due to ‘counter-revolutionary’ information being available on a number of websites, some of which are official news sites. As a result of computer ownership bans, computer ownership rates were among the world’s lowest. However, since buying a computer was legalized in 2007, the ownership of computers in Cuba soared, dramatically increasing the number of Internet users.Having said that, there are still restrictions on email in the workplace, however, have been growing in recent years, and dissident websites and blogs continue to be subject to periodic disabling or blocking.Users may also face penalties if they violate the terms of authorization: In December 2014, the performance artist Tania Bruguera used internet platforms to promote a performance in the Plaza of the Revolution in Havana. Bruguera and several prominent bloggers and activists who expressed support for her project online were arrested and detained before the performance could take placeIn February 2015, the government canceled the Infomed national browsing and email service for some doctors and dentists because their emails had been used to publish classifieds on the popular website Revolico (a service similar to the U.S.-based Craigslist and one known for listing products on the black market) Between 2014 – 15, the Cuban government has opened over 100 new internet access points, permitted the first public Wi-Fi, and reduced prices and increased speeds for internet access at state-run cybercafes. Despite these notable advances, Cuba continues to have some of the most restrictive internet access in the world. Home internet connections are still forbidden. Cuban law places strict limits on free speech and outlaws independent media. Although many foreign news websites are accessible from internet access points, websites focused on Cuban news and websites from Cuban dissidents or expats are often blocked.Given the current Socio-political environment of Cuba, Cuba has a long way to go in terms of the telecom industry beginning with emphasis on freedom of speech and focus on information driven public discourse.TECHNOLOGICAL IMPLICATIONS ON THE TELECOM INDUSTRYDue to the second generation cell phone infrastructure, most mobile phone users have unable to browse the web, but it is possible to send and receive international text messages and images with certain phones. Moreover, a growing number of Cubans have more advanced smartphones, often gifts from wealthier relatives living abroad. A series of new regulations including no special permit requirements from the FCC allow US telecom and internet companies to engage in a variety of commercial activities in Cuba. They include selling infrastructure equipment and devices such as mobile phones and computers, forming joint ventures with Etecsa, and setting up shop in Cuba to offer telecom and internet services. Despite setting up of servers by Google, the cost of internet remains relatively high and speeds extremely low.Tourism has often required the support of the telecom industry, with an increasing number of foreign tourists being supported by foreign service providers within the country. However providing availability of services within the country outside of havana remains a slow process and requires foreign assistance. “Castro sees that modern communication and computer networks are necessary for the economy and is willing to open new doors in order to make this possible.”Mobile telephone subscriptions in Latin America have grown by an impressive 26.0% annually on average between 2000 and 2009. Markets experiencing particularly high growth include Cuba, Honduras and Ecuador, with average annual growth of 58.3%, 52.4% and 44.2% respectively where growth has been from a lower base;Growth has slowed since the early 2000s. This reflects the stabilisation of the market rather than a major downturn, with the early 2000s marking the point where mobiles first began to make inroads into the regional market; A new undersea fiber-optic link with Venezuela was scheduled for 2011. In May 2012 there were reports that the cable was operational, but with use restricted to Cuban and Venezuelan government entities. Internet access by the general public still used the slower and more expensive satellite links, until January 2013 when internet speeds increased. In March 2014, a new Nauta service was launched, which allows users to send and receive emails on their mobile phones but only with a .cu email account. The cost of the service (US$1 per 1Mb of data transfer) is taken from the mobile phone’s credit rather than from the balance of the users’ Nauta internet account.