A termination fee is the charge imposed by telecommunications operators to allow a call to end on their network and the receiving persons handset or ground line. These fees are generally higher when ending on a cell phone network. Cuba charges one of the highest rates in the world to allow people outside Cuba to call someone in the country with all termination fees payable to the state owned ETECSA. These fees are included in the callers per minute cost, meaning that a call made from the US costing 70 cents per minute could have up to 56 cents included to pay Cuba´s ETECSA for allowing the call to terminate. Millions more cheap phones mean millions more calls turning data bytes into hard currency for Etecsa and its offshoot CCOM.
The key – Vergatario, Venezuela´s discount mobile cell phone launched by Hugo Chavez on his Alo Presidente this Sunday is already set to be Cuba´s answer to extra inbound calls and significantly increased revenues from termination fees. With millions of Cuban´s abroad, many in the US, with increasing numbers around the world, the phone home income can be translated into 100´s of millions of extra dollars for Cuba over the next few years. A financial windfall similar that of money remittances sent by Family members to their loved ones.
The Vergatario handheld, assembled in Venezuela using Chinese components, appears to be the answer and Cuba will see its first batch in tandem with Venezuelans despite CCom selling the phone for over twice its 14 USD cost in Venezuela.
The Chinese partners ZTE and Huawei are also onto a clear winner with the Vergatario. By shipping the component parts to Venezuela for assembly they take advantage of the Latin American ALBA free trade agreement and near zero import taxation accords between Alba nations of Venezuela, Cuba, Bolivia, Nicaragua, Bolivia, and Honduras and other members. Having access to these markets on a import duty free regime via Alba is a massive bonus to the Chinese component makers as well.
The phone has a camera, WAP internet access, FM radio and MP3 and MP4 players for music and videos. Chavez also claims that a secure version is available which cannot be tracked via satellite for use by officials.