One of the most modern and dynamic sectors of the Dominican economy was the telecommunications industry, which surpassed its counterparts in every Latin American and Caribbean nation in terms of technology. Telecommunications services, however, were largely concentrated in urban areas.

The most impressive and technologically advanced component of the nation's telecommunications network was its phone system. Codetel, a wholly owned subsidiary of the United States company GTE, operated approximately 90 percent of the 250,000-unit national phone system under the regulatory authority of the General Directorate for Telecommunications of the Secretariat of State for Public Works and Communications. Codetel planned to double the number of phones in the country by the mid-1990s. Some of the advanced features of the phone system included direct domestic and international dialing, toll-free access to the United States through "800" numbers, incoming toll-free or WATS service, high-speed data transmission capabilities, fiber-optic cables, digital switching, and a full range of services usually available only to consumers in the United States. In 1987 the Dominican Republic became the second Latin American country to boast cellular mobile telephones, and it was the only developing country in the hemisphere to offer this service to the public on a national basis. Codetel and other companies also offered telex, electronic mail, telenet, and facsimile services to the public. A member of the International Telecommunications Satellite Organization (Intelsat), the country possessed a satellite earth station, submarine cable to the United States Virgin Islands, and microwave stations. In 1989 a fiber-optic cable to Puerto Rico was completed to expedite sophisticated data transmission to the United States.

The Dominican Republic's unique advantage in terms of telecommunications technology allowed the creation of new industries derived from the growing field of information technology. For example, four free zones in the Dominican Republic served information industries, and the free zone in San Isidro was a teleport with direct links to United States telecommunications networks. These new information industries provided a wide range of innovative services that were creating a comparative advantage for the republic by the late 1980s. These services included data entry, telemarketing support for United States companies, response to toll-free service calls for Hispanic consumers in the United States, computer graphics services, computer software development, and Spanish-English translation services. Potentially, any computer-based service available in the United States that could be transmitted via satellite or through fiber-optic cables could be handled in the Dominican Republic.

Data as of December 1989