U.S. Phone Card Company Strikes Deal with Cuba

HAVANA (AP) — A New Jersey-based company has struck the first publicly announced deal under reforms enacted this year that allow U.S. telecom firms to do business with Cuba.

IDT Corp.’s deal with Cuban state telecoms firm ETECSA will affect its sales of international calling cards to immigrant communities in the U.S. and its business connecting calls between phone companies in different countries, CEO Bill Pereira told The Associated Press on Friday.

U.S. calls to Cuba have been typically put through by companies in third countries like Italy and Spain, Pereira said. IDT hopes that dealing directly with ETECSA will allow it to lower the price of calls to Cuba.

Outside experts blame the high cost of calls in and out of Cuba, among the world’s most expensive, on the country’s use of its monopoly on telecommunications to generate badly needed foreign exchange for the entire communist government.

Pereira said it wasn’t yet clear that his company’s deal would make it cheaper for people to call friends and family in Cuba.

“It may, it may not,” he said. “A lot of things impact the price of a minute on any given day.”

“We hope that this is the beginning of something, of a relationship that will allow us to build and grow and facilitate and ease communication between family members and loved ones,” he said.

Pereira said he expected the deal to receive swift U.S. approval.

The Obama administration punched a series of holes in the half-century-old trade embargo with Cuba this year and granted most freedom to telecommunications companies, which can deal directly with the Cuban government. Virtually all other firms, with the exception of those selling food and medicine, must deal with Cuba’s small private business sector.

IDT, with about 1,100 employees, had $18.8 million in profits on $1.651 billion in revenue last year.

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Associated Press writer Nick Jesdanun in New York contributed to this report.

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Michael Weissenstein on Twitter: https://twitter.com/mweissenstein