Information Technology landscape in PORTUGAL

  Overview. Portugal began to privatize many of its industries in the 1980's. Several areas within the telecommunications industry have gradually been liberalized, but fixed telephony still remains under the control of the Portuguese telecommunications operator, Portugal Telecom. Even in liberalized areas it is the dominant player and accounts for approximately 90% of all telecom revenues in Portugal. Along with Greece, Ireland and Spain, Portugal does not have to liberalize the provision of its basic telecommunications infrastructure until 2003; however, it has committed to fully liberalize by 2000 in order to operate successfully in a competitive global telecommunications arena.

  Current State. Portugal Telecom, the Portuguese telecommunications operator, was created in 1994 from the combination of Telecom Portugal, SA, Telefones de Liboa e Port, SA (TLP), and Teledifusora de  Portugal, SA (TDP).  In mid-1995, 26.3% was sold in an Initial Public Offering, which was five times oversubscribed, as a part of the Portuguese government's accelerated privatization efforts. As part of the partial privatization, Portugal Telecom was given complete control of Companhia Radio de Marconi, Portugal's intercontinental telecommunications operator. A second tranche was later auctioned to domestic and international investors in June 1996, bringing state ownership down to 51%.

  Basic Liberalization. Prior to this, major regulatory changes had already started to take place during the early 1980s. Although under the Law No. 188/181, issued in 1981, the state still retained monopoly control over public post and telecommunications services, it did liberalize the terminal equipment market. The Insituto das Comunicacoes de Portugal (ICP) was also created at this time as an advisory body to the government, and subsequently became the official regulatory body in 1989. In this year, Parliament approved the Basic Telecommunications Law, which established that networks for public use^@ would be under monopoly operation, while complimentary* and value-added services^# would be gradually liberalized. Since 1990, services based on leased lines, switching or processing units not integrated with the public network and mobile networks and services have been liberalized. Licenses for complimentary and value-added service providers are obtained through the ICP.  Private networks must be authorized by the Portuguese government.

  EU Extension Period. Portugal Telecom has been granted an extension of five years to the 1998 deadline for full  telecommunications liberalization in Europe. However, it appears that the Portuguese government will open the telecommunications market to competition before fully exploiting its leeway. In anticipation of an open market, several alternative network providers have made plans to build/utilize existing networks. These include:

• a consortium of EDP, the national power company, Caminhos de Ferro, the national railway company, Transgas, the Portuguese natural gas provider and Brisa, the toll motorway builder and operator; and
• Televisao Independente, a terrestrial broadcaster, who may sell off its telecommunications network to a private investor.