UPDATE 4-Cuba ends restriction on cellular phones

(Adds reaction of Cubans, background on reforms)

By Marc Frank

HAVANA, March 28 (Reuters) - Cuba said on Friday it will allow all Cubans to buy and use mobile telephones for the first time in the latest step by new President Raul Castro to improve access to consumer goods.

Cuba has the lowest rate of cellular telephone use in Latin America and the service has been restricted until now to foreigners or government officials and employees.

Cuban telecommunications monopoly ETECSA, a joint venture with Telecom Italia (TLIT.MI: Quote, Profile, Research, Stock Buzz), said it would begin selling the service to the general public within days in hard currency.

"ETECSA is able to offer mobile phone service to the public," it said in a statement published in the Communist Party newspaper Granma.

Many Cubans have for long wanted access to cellular phones and hoped it would be among the first steps taken by Raul Castro, who succeed his ailing brother Fidel Castro as Cuba's first new leader in almost half a century on Feb. 24.

"This shows there is a change in mentality at the top and recognition that Cuba has to move into the 21st century," a young computer technician said, asking not to be named.

Raul Castro has begun lifting some of the many restrictions on the daily life of Cubans as he tries to meet popular demands for better living standards in the socialist state.