Information Technology landscape in PORTUGAL

Historical Impetus for Telecommunications:

Background.   Telephony came to Portugal in 1877 when King D. Luis I ordered a telephone set for himself. Five years later, Edison Gower Bell built two discrete local networks supporting 22 and 19 subscribers respectively in Lisbon and Oporto, the two largest cities in Portugal. In 1887 Portugal's first private network started and was later developed into the Anglo Portuguese Telephone Company, which operated local telephone service for these two cities. It subsequently became the public company, Telefones de Lisboa e Porto (TLP) in 1968, still with the same regional coverage. Telecom Portugal was responsible for serving the domestic telecommunications needs of the remaining regions of the country, while Companhia Portuguesa Radio Marconi (CPRM,) which was established in 1992, handled intercontinental communications by providing radio links between the continent, the Azores and Madeira Islands and Portugal's colonies in Africa and the Far East. Each of these licensed operators have since merged to form Portugal Telecom.¹¹
 
Historic Stimulus for IT and Telecom.¹²  Portugal does not appear to have any strong roots in telecommunications or information technology, with the exception of Texas Instrument's presence since 1973. Telecommunication infrastructure, until recently, has been underdeveloped and considered the poorest in the industrialized European region. Little attention appears to have been paid to originally define the regions of coverage by the licensed PTOs. For example, TLP brought service between and to the largest two cities, Lisbon and Oporto, for over 80 years while the rest of Portugal remained to be served by one carrier, Telecom Portugal. Telecom Portugal also provided international coverage along with CPRM, creating some redundant efforts. Most likely any initiatives to develop infrastructure or advanced services were led by governmental institutions or the military.

In information technology, little impetus has occurred in the past to develop niches in traditional IT-related fields-- software, software services, hardware, peripherals, programming, chips, boards, etc. -- or in telecommunications -- terminal equipment, circuits, switches, routers, networks, etc.

Automotive Industry. ^12a 

Portugal's automotive industry was created in 1963 and has been the main user of high-technology in Portugal for automation, design and assembly. The Portuguese government provides very favorable incentives for investors in terms of stable policies, financial systems and tax laws. As a result, foreign investors have positioned themselves as the most influential drivers of the automotive industry. Listed below are foreign investors in the auto industry:
 
 

Company Name	Date	Type
Yasaki Saltano	May 1988	Cable Harnesses
Ford Electronics	July 1989	Audio systems, Air Compressors, Airbags, Alarms
Delco Remi	Dec 1989	Ignition Systems
Covina	Jan 1990	Window Glass
Continental Mabor	June 1990	Tires and Inner Tubes
Cofab Europa	Jul 1990	Piston Rings
Ford VW	Jul 1991	Production Plant
Indelma	Jul 1991	Cable Harnesses
HUF	Nov 1992	Locks and Keys
Johnson Controls	Dec 1992	Seat Covers
Dalphi Metal	Feb 1993	Steering Components
Slem	April 1993	Steel Service Center
Kupper e Schmidt	Jun 1993	Alloy Die Casts
Cablinal	Sept 1993	Cable Harnesses
Fico Cables	Dec 1993	Control Cables
Sommer Allibert Industrie	Dec 1993	Plastic Components
Indelma	Feb 1994	Cable Harnesses
Iralusa	Mar 1994	Roof Components
Hoheica	May 1994	Rear View Mirrors
Karmann Ghia	May 1994	Seat Covers
RSL	Jul 1994	Plastic Parts
Johnson Controls	Dec 1994	Seat Sponge and Fiber
Opel Portugal	Feb 1996	Plant Modernization

 

Current Stimulus for IT Growth:

Harmonization with the EU and WTO initiatives appear to be the strongest catalysts for the current emphasis on and growth in the IT industry in Portugal. Development of the telecommunications infrastructure is seen as the first step for Portugal to catch up with its EU counterparts, and it has dramatically increased its telecom and telecom R&D expenditures in order to compete in the European Union of the 21st century. From the private sector, pressure to meet market demands in the banking sector has most probably also stimulated greater emphasis on IT. As more multinational companies have entered Portugal, comparable levels of financial services have requisitely needed to be offered relative to other EU nations. ¹³

The banking sector in Portugal and Spain is actually ahead of other EU Member States in their offerings of advanced ATM services. For example, to combat the decreasing rate of ATM withdrawals per terminal year over year, Portuguese and Spanish banks were among the first to offer extra facilities through their ATMs in order to move customers out of the branch. ATMs have been used as advertising media for bank products or to carry paid-for 3rd party advertising messages. In addition, ATMs offer non-traditional banking services such as foreign exchange rates, stock exchange information, the ability to purchase shares or bonds, and the possibility of buying tickets for buses, trains, cinemas and the theater. ¹⁴