the internet in a lusophone ldc: cape verde case study

THE INTERNET IN A LUSOPHONE LDC:

CAPE VERDE CASE STUDY

November 2002

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This report was prepared by Margarida Evora-Sagna, Vanessa Gray and Michael Minges.It is based on research carried out from 16 – 22 April 2002 as well as articles andreports noted in the document. The assistance of Direcção Geral das Comunicações,particularly David Gomes was indispensable and highly appreciated.

Equally, the report would not have been possible without the cooperation of CapeVerdean organizations who offered their time to the report’s authors. The report is oneof series examining the Internet in developing nations. Additional information is availableon the ITU’s Internet Case Study web page at http://www.itu.int/ITU-D/ict/cs/.

The report may not necessarily reflect the opinions of the ITU, its members or thegovernment of the Republic of Cape Verde.

The title refers to Cape Verde’s national language Portuguese (Portuguese speakersare referred to as Lusophones) and the nation’s classification as a Least DevelopedCountry (LDC).

© ITU 2002

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Contents

1. Country background ............................................................ 1

1.1 Overview ............................................................................1

1.2 Demography ........................................................................1

1.3 Economy .............................................................................3

1.4 Human development ............................................................3

1.5 Government ........................................................................4

2. Telecom & Mass Media ......................................................... 6

2.1 Telecommunications .............................................................6

2.2 Mass media ....................................................................... 15

3. The Internet ...................................................................... 18

3.1 History .............................................................................. 18

3.2 The market ....................................................................... 18

3.3 Connectivity ...................................................................... 19

3.4 Pricing .............................................................................. 19

3.5 Potential market size .......................................................... 21

3.6 Regulation ......................................................................... 22

3.7 Curriculum Vitae ................................................................ 22

4. Sector absorbtion .............................................................. 26

4.1 Government ...................................................................... 26

4.2 Education .......................................................................... 29

4.3 Health .............................................................................. 34

4.4 E-commerce ...................................................................... 35

5. Conclusions ....................................................................... 40

5.1 State of the Internet ........................................................... 40

5.2 Recommendations .............................................................. 42

Annex 1: List of meetings........................................................ 48

Annex 2: Acronyms and abbreviations .................................... 49

Annex 3: Framework dimensions ............................................ 51

Figures

Tables

1.1 Population indicators ............................................................2

1.2 Human Development Indicators .............................................4

3.1 Dial-up Internet pricing ....................................................... 21

4.1 Cape Verde's ICT needs ...................................................... 30

4.2 Cape Verde at school, yesterday and today ........................... 32

4.3 Institutes of higher education in Cape Verde .......................... 33

4.4 Cape Verde Health Facts, 2000 ............................................ 35

5.1 Framework comparisons ..................................................... 41

5.2 Cape Verde’s ICT SWOTs ..................................................... 43

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1.1 Map of Cape Verde ...............................................................1

2.1 Upward trajectory .............................................................. 11

2.2 Cabo Verde Telecom owners and revenue .............................. 11

2.3 Mobile in Cape Verde .......................................................... 13

2.4 Cape Verde's international traffic and pricing ......................... 14

2.5 Cape Verde's umbilical cord ................................................. 15

2.6 Access to mass media in Cape Verde .................................... 16

3.1 Internet subscribers ........................................................... 18

3.2 Cape Verde's International Internet connectivity .................... 20

3.3 Potential Internet users....................................................... 21

3.4 Cape Verde Internet hosts ................................................... 23

4.1 Ripe at Work ...................................................................... 27

5.1 State of Internet in Cape Verde ............................................ 40

Boxes

1.1 The Cape Verdean Diaspora ...................................................2

3.1 Santa Catarina Telecentre ................................................... 23

3.2 The Lusophone connection .................................................. 24

4.1 The benefits of ICT in the government sector ......................... 28

4.2 Training IT professionals ..................................................... 34

4.3 Cape Verde's Own Debit Card .............................................. 36

4.4 How to become a development haven ................................... 38

5.1 ICT serving development .................................................... 44

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1. Country background


1.1 Overview

The Republic of Cape Verde, locatedin the North Atlantic Ocean, is anarchipelago some 455 kilometres westof Senegal in western Africa. Itconsists of ten islands and covers aland area of 4’033 square kilometres.The archipelago is geographicallydivided into two groups, theBarlavento or windward islands in thenorth (Santo Antão, São Vicente,Santa Luzia, São Nicolau, Sal and BoaVista) and the Sotavento, or leewardislands, to the south (Maio, São Tiago,Fogo and Brava). The archipelago isof volcanic origin similar to otherislands of the Macaronesia group (i.e.,

Figure 1.1: Map of Cape Verde

Source: The World Factbook.

Azores, Canaries and Madeira). Theislands of Sal, Boa Vista and Maio areextremely flat while the rest of thearchipelago is mountainous.

Cape Verde is characterized by severalgeographic and historicalparticularities. Located in the Sahelzone, the country is an extension ofthe Sahara. While it is the coolestnation in West Africa, it has a historyof long droughts. Although thesouthwest monsoon can bring rainbetween August and October, rainfallis sporadic and not always certain. Theoccurrence of droughts has had

terrible consequences for CapeVerde, resulting in starvation duringthe past. Droughts are also one ofthe causes for large-scaleemigration.1 Cape Verde is alsodistinctive as being farther from theAfrican mainland and closer to theAmericas than any other Africancountry. People wise, Cape Verdeis unique as the islands wereuninhabited when the Portuguesefirst arrived in 1456. Slaves werebrought from the African mainlandand today most Cape Verdeans areof mixed African and Europeanorigin.

Administratively, the country isdivided into 17 “Concalhos” ordistricts.

1.2 Demography

A national census was carried outin 2000 and counted a populationof 434’812.2 The population isyoung, with over 42 per cent underthe age of 14 and only six per centover the age of 64. The averageCape Verdean is 17.3 years old.Many Cape Verdeans haveemigrated and though estimatesvary, there are at least as manyCape Verdeans abroad as in thecountry (see Box 1.1). The nation

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Cape Verde Internet Case Study

became predominantly urban duringthe 1990s with the urban populationstanding at 53 per cent in 2000. CapeVerde’s capital is Praia, with a

Table 1.1: Population indicators

Source: National Statistical Institut (INE).

Item Year 2000

Total population 434’812

Growth (%) (1991-2000) 2.4

Urban population (%) 53

Age Distribution:

Below 14 years (%) 42.3

15-64 years (%) 51.4

65 years and older (%) 6.3

Box 1.1: The Cape Verdean Diaspora

Emigration from Cape Verde dates back some twohundred years. One factor is recurring droughtsforcing citizens to go abroad in search of a betterlife. Another is the nation’s sea faring tradition andits prime location between three shipping routes(Europe-Africa-South America). Yet another factoris the historical tie between Portugal and CapeVerde. Finally, a shortage of institutions of higherlearning has forced students in search of educationto go abroad, some of whom never return home.

There is much anecdotal evidence that there aremore Cape Verdeans living abroad than in thecountry but few hard statistics. One problem is thatsome Cape Verdeans may be living abroad illegallyand therefore not showing up in official statistics.Another measurement problem is assimilation intothe foreign country. For example, there are allegedlymore Cape Verdeans in the US than in any othercountry yet many are already US citizens so theyare not counted distinctly. Another problem is thatCape Verde only became independent in 1975 soearlier emigrants may be classified as Portuguese.

Despite these measurement problems, there are bitsand pieces of information that provide some idea ofthe Cape Verdean Diaspora. The national statisticsoffice has an informal estimate of around 700’000.Linguistic research estimates that there are some400’000 people outside of the country that speakCape Verdean Creole. In terms of national statistics,the Portuguese Ministry of Internal Administration

reports that there were 43’797 Cape Verdeans livingin Portugal in 1999.3 Data from the Community ofPortuguese-speaking Countries (Comunidade dosPaíses de Língua Portuguesa, CPLP) state that therewere 7’418 Cape Verdeans living in other lusophoneAfrican countries in 1996.

The country with the most Cape Verdeandescendants is the US where “Cape Verdeans makeup the oldest community of voluntary Africanimmigrants to the United States.”4 Cape Verdeansfirst started coming to the US in the 19th centurywhen whaling ships visited Cape Verde and pickedup locals as sailors. Many settled in the New Englandregion, where the whaling ships wereheadquartered. Exactly how many Cape Verdeanslive in the US is unknown. According to the USBureau of Census, there were only 14’368 peopleborn in Cape Verde and residing in the US in 1990who were not US citizens. However many CapeVerdeans would have become citizens and thus notbe separately identifiable. One source puts thenumber of people of Cape Verde descent in the USat half a million.5 Ironically while Creole is nottaught in Cape Verdean schools, some USjurisdictions require students to be taught in theirmother tongue. As a result, Creole textbooks havebeen published in the US.6 Today, the link with theUS is manifested mainly through money andtelephone calls. The US is the number one sourceof overseas remittances as well as Cape Verde’stop telephone traffic relation.

population of 106’052 and54 per cent of the populationlive on the island of Santiagowhere Praia is located. With anannual growth rate of 2.4 percent, the population isexpected to reach 567’000 in2015. Because of emigrationand a higher female lifeexpectancy, there are morewomen than men although theratio (93.9 men for every100 women in 2000) hasimproved over the last decade.Women head forty per cent ofCape Verde’s 93’975 house-holds. The average householdsize is 4.6 persons.

Cape Verde’s nationallanguage is Creole (“Kriolu”),

spoken by practically the entirepopulation. Creole dates back to the15th century and is derived from oldPortuguese and languages spoken in

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the coastal areas of West Africa.7

Portuguese is the official language,used in schools and publications. CapeVerde is a founding member of theComunidade dos Países de LínguaPortuguesa, the formal organizationof Portuguese-speaking nations.Around one third of the population iscomfortable with Portuguese whileover half understands it.8 A portionof the population, particularly theeducated, is also conversant in Frenchdue to until recently, use of French asa second language in school; studyabroad; proximity to francophoneAfrica and the availability of Frenchradio and television broadcasting.Along with Guinea-Bissau and SaoTome and Principe, Cape Verde is oneof three lusophone members of theOrganisation Internationale de laFrancophonie. English is understoodby some, due to relatives abroad andoverseas studies. English is alsoincreasingly chosen as a secondlanguage at school.

1.3 Economy

Although classified as a LeastDeveloped Country (LDC), CapeVerde’s level of economicdevelopment places it into a lowermiddle-income nation rather than lowincome. Gross National Income (GNI)per capita was US$ 1’330 in 2000,almost double the 1990 figure and fivetimes higher what it was atindependence in 1975. Economicgrowth averaged ten per cent a yearbetween 1980-90 and six per cent ayear between 1990-2000.

Cape Verde’s economy is heavilyservice-oriented. Services accountedfor 72 per cent of the country’sUS$ 588 million Gross DomesticProduct (GDP) in 2001. Agricultureonly accounted for 11 per cent of GDP.There are few natural resources, ashortage of water and only ten percent of the land is arable. Nonetheless,around half the population lives inrural areas and engages in small-scaleagricultural activities and fishing.Industry accounts for 17 per cent ofGDP, consisting mainly of constructionand some manufacturing.

Despite Cape Verde’s economicgrowth, the economy is fragile. It hasfew natural resources and limitedagricultural possibilities. Food importsare critical, accounting for about a fifthof imports in 2000. The economy isheavily dependent on foreignassistance (Cape Verde has one ofworld’s highest foreign assistance ratioof per capita at US$ 319 in 1999) andoverseas worker remittances (whichaccount for about 20 per cent of GDP).

After pursuing a centrally-managedand state-run economy afterindependence, Cape Verde liberalizedin 1991. The emphasis is now onprivate sector involvement, attractingforeign investment and developingexports to reduce the large tradedeficit.

Reduction of poverty is a priority forthe government. According to datafrom the early 1990s, about a third ofthe country lives in poverty, of which14 per cent are classified as very poor.Poverty varies across the country withthose in rural areas suffering more.However the increasing urbanizationof the country and the consequentimpact on infrastructure and servicessuggest that urban poverty is rising.Households headed by women tendto be the poorest. The governmenthas a National Poverty ReductionProgram with key strategies includingpromoting economic growth andenhancing human resourcedevelopment.

With its world famous music, stunninglandscape and historical sites, tourismholds considerable potential. Tourismaccounted for 3.9 per cent of GDP in1999 and for 27 per cent of serviceexports. The majority of foreigninvestment has been in this sector.

1.4 Human development

Cape Verde ranks 91st out of 162 inthe United Nations DevelopmentProgramme’s Human DevelopmentIndex (HDI), placing the country inthe middle of the medium humandevelopment category. The HDI iscomposed of a basket of indicators

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including life expectancy at birth, adultliteracy, school enrolment and GDP percapita. Cape Verde ranks very high foran LDC and compared to otherPortuguese-speaking nations, CapeVerde occupies a unique position. Itis behind Brazil and Portugal but aheadof other African lusophone nations(see Table 1.2).

Cape Verde scores well in all indicatorsrelative to its level of economicdevelopment. Life expectancy ishigher than in Brazil by almost twoyears. Its literacy rate—at some threequarters of the adult population—isrespectable and a reflection of thegovernment’s emphasis on educationover the last decade. The focus nowneeds to be on increasing literacyamong older adults. There is nearuniversal primary school enrolment inCape Verde and it has achieved theMillennium Development Goal9 in thisarea. The secondary school enrolmentrate is 46 per cent. A shortage ofhigher education facilities constrainstertiary enrolment, where the rate isonly 4.2 per cent.

1.5 Government

The Cape Verde is lands werediscovered and colonized by the

Table 1.2: Human Development Indicators

Source: United Nations Development Programme.

Cape Verde compared to other lusophone economies, 1999

HDI Economy Life Adult Combined GDPRank expectancy literacy school gross Per capita

at birth rate enrolment (PPP US$)(years) (%) ratio (%)

28 Portugal 75.5 91.9 96 16’064

69 Brazil 67.5 84.9 80 7’037

91 Cape Verde 69.4 73.6 77 4’490

109 Sao Tome 64.7 73.2 59 1’977

146 Angola 45.0 42 23 3’179

156 Guinea Bissau 44.5 37.7 37 678

157 Mozambique 39.8 43.2 23 861

Portuguese in 1456. Cape Verde’sstatus was changed from a colonyto an overseas province of Portugalin 1951. The archipelago achievedindependence from Portugal onJuly 5, 1975.

At independence, there was anintention of forming a joint nationwith Guinea-Bissau but relationsbecame strained and this nevermaterialized. The government ruledunder a one party system. Growingpressure for democracy led to the firstmultiparty elections in January 1991.Subsequent democratic elections wereheld in 1996 and in 2001. The PartidoAfricano para a Independência deCabo Verde (PAICV) won a majorityof seats in parliament and itscandidate, Pedro Pires, was electedpresident by a margin of 13 votes.Both the president, who functions ashead of state, and the nationalassembly serve for a five-year term.The prime minister, who functions ashead of government, is nominated bythe national assembly.

Cape Verde is heralded as a role modelof good governance and stability in theregion. Elections are democratic andviolence-free. Corruption is low and keptso by tough anti-corruption measures.

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1 For more on the impact of droughts on Cape Verdean history see Annababette Wits. “Beating Malthus onCape Verde Islands.” Islander Magazine. Issue 3. January 1997. Available at www.islandstudies.org.

2 Most of the demographic information in this section is from the Instituto Nacional de Estatística web site atwww.ine.cv.

3 See “Estatísticas 1999”, available on the following web site http://www.mai.gov.pt/data/mai/index.php?x=estatisticas&PHPSESSID=5a77f5976ffc3b17a49995bb18432180

4 See J. Lorand Matory. “Africans in the United States,” Available atwww.footstepsmagazine.com/AfricansinUSArticle.html.

5 “Some 500,000 people of Cape Verdean ancestry live in the United States, mainly in New England.” See U.S.Department of State. “Background Note: Cape Verde.” December 2001.www.state.gov/r/pa/ei/bgn/2835pf.htm.

6 “In Massachusetts twenty LEP students in one language group in a district will trigger native-languageinstruction, even if there are only two students in each grade in a separate classroom taught by a certifiedbilingual teacher… thousands of Cape Verdeans are instructed in a pidgin Portuguese-Crioulo—though themajority do not know the language; indeed in Cape Verde only Portuguese is taught since Crioulo is a spokenlanguage, not a written one. Teachers in Massachusetts had to invent and print up Crioulo materials.” SeePeter J. Duignan. “Bilingual Education: A Critique.” Available atwww-hoover.stanford.edu/publications/he/22/22b.html.

7 For more on the origins and status of Cape Verdean Creole see Manuel Veiga. “Language Policy in CapeVerde: A Proposal for the Affirmation of Kriolu.”www.umassd.edu/specialprograms/caboverde/cci-kproposal-e.html and Marlyse Baptista. “The sociolinguisticsituation in the Cape Verde islands.” www.capeverdeancreoleinstitute.org/articles_&_research.htm.

8 See “KABUVERDIANU: a language of Cape Verde Islands.” on the Ethnologue web site atwww.ethnologue.com/show_language.asp?code=KEA

9 For more information on the United Nations Millennium Development Goals, seehttp://www.un.org/millenniumgoals/index.html.

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2. Telecom & Mass Media

2.1 Telecommunications

2.1.1 Policy and regulation

Cape Verde’s telecommunicationsector policy and regulation formallystarted after independence in 1975.Until this date, the country’stelegraphy and telephony services,like in other colonies, fell underPortugal’s telecommunication lawsand legislation. A state-ownedoperator provided nationalcommunications while privately ownedCompanhia Portuguesa Radio Marconi(CPRM) provided internationaltelecommunications. CPRM’s opera-tions were based on the terms of aConcession Agreement that it signedwith the Portuguese government.

The country’s geographic locationhelped develop its telecommunicationinfrastructure in several ways. Theimplementation of international RadioRegulations since the early stage oftelecommunication development inCape Verde has made the country’smaritime coast stations well known fortheir service quality. This has longearned Cape Verde the reputation ofbeing one of the most important Africanmaritime coast stations of the AtlanticOcean. In the 19th century, MindeloIsland was an important landing pointfor the first telegraphy coppersubmarine cables connecting Africa toEurope. The landing of the SAT 1submarine cable in Sal in 1966, laterconnected to Mindelo and Praia througha troposcatter1 system, provided theinfrastructure to offer good quality voiceservices.

The rapid evolution of thetelecommunication sector worldwidelater led the young Cape Verde nationto establish telecommunications,broadcasting and Information andCommunications Technologies (ICT)development programs. The technicaland legal framework has beenperiodically revised and adapted to take

into account the evolution oftechnologies, and to adapt to the worldmarket as well as to the socio-economicand political structure of Cape Verde.

2.1.1.1 From privatisation tonationalization: the earlytelecommunication sector

Immediately after independence in1975, Cape Verde’s new governmentdeclared the telecommunicationsector crucial to the country’sdevelopment and its promotion wasmade a top priority. Much of thetelecommunication infrastructurebelonged to CPRM. In order tomaximize use of the infrastructure andensure that it benefited everyone,national ownership was inevitable. Forthis reason, as well as to emphasizethe new nation’s independence,nationalization, that is transfer of theforeign-owned infrastructure to thegovernment, became essential.Negotiations between the Cape Verdeand Portugal were smooth and led toa new Protocol of Concession, whichgranted the Cape Verde governmentexclusive ownership.

The Protocol of Concession was signedbetween the Cape Verde governmentand CPRM on 21 January 1977. Fouryears later, when Cape Verdeannounced its intention to cancel theconcession, CPRM did not challengethis request and on 12 December1981 the two parties terminated theconcession by signing the CancellationAgreement. Clause 2 of the agreementobligated Cape Verde to compensateCPRM for the termination of theConcession. After deducting CPRM’sdebts (that it still owed Cape Verdefrom the 1976-1981 period), thecompensation amount that CapeVerde had to pay CPRM came to about30 mill ion Cape Verde escudos(US$ 616’000). This amount included:

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• The residual value of thetelecommunications equipmentand buildings belonging to CPRM;

• The SAT 1 submarine cableInternational Right of Use; and

• CPRM’s foregone profits from theearly termination.

The Cape Verde government made thecompensation payments betweenJune 1982 and December 1983, asscheduled in the CancellationAgreement. December 31, 1983, theday the last payment was made, hassymbolic significance and marks thecomplete independence and financialautonomy of the Cape Verdetelecommunications sector.

Nationalization of the telecommu-nication sector provided Cape Verdewith new freedom and options. Thegovernment could now signcooperation agreements with regionaldevelopment agencies such as theAfrican Development Bank (ADB) andthe Kuwait and OPEC Funds.International development assistanceand bilateral cooperation contractscontributed to the sector’sphenomenal growth over the nextyears.

As a measure to acceleratetelecommunication development, thepost and telecommunication entitywas granted autonomy to manage itsown funds. This meant that after theapproval of the annual tele-communication and postal budget, themanagement of the budget wasshielded from the Ministry of Finance’ssphere of influence, including lengthyadministrative procedures. This putthe post and telecommunication entityin an advantageous situationcompared to other governmentagencies.

2.1.1.2 Creation of the firstregulator

At independence, in 1975, both thetelecommunication and the postalsectors were operated by the Serviçosdos Correios e Telecomunicaçöes(CTT). Immediately after indepen-

dence, in 1976, a separate body, theDireccao Nacional dos Correios eTelecommunicacoes, was created andput in charge of internationaltelecommunication relations and toassist the government in definingpolicy strategies for telecommu-nication development. This newauthority, which was dependent on theministry in charge of telecommuni-cation, also assumed responsibility forthe country’s frequency management.

In July 1981, Direccao Nacional dosCorreios e Telecomunicacoes andServiços dos Correios e Telecomu-nicacoes were merged into one publicenterprise, called Empresa Publica dosCorreios e Telecomunicacöes SARL(CTT-EP). This measure allowed thetelecommunication sector to growmore independent and to be protectedfrom the usual constraints ofgovernmental intervention in day-to-day management. The governmentfurther hoped to overcome the lackof specialized staff by concentratingall telecommunication experts in oneentity.

During the following years EmpresaPublica dos Correios e Telecomunica-çöes planed, developed, implementedand operated all national andinternational telecommunications inCape Verde. In addition it accumulatedregulatory functions, includingspectrum management and numberplanning. It also played an importantrole at the international level.

One of the positive results of CapeVerde’s successful foreigntelecommunication relations was itselection to the International Telec-ommunication Union AdministrativeCouncil, during the PlenipotentiaryConference in Nice, in 1989.2 CapeVerde kept its place in the ITUAdministrative Council until 1998.

Cape Verde also has a regional successstory to tell. It has played animportant role in helping to reachconsensus on regional developmentand in seconding national experts forinternational, regional and bilateralcooperation.

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2.1.1.3 Creation of secondregulatory body

By 1991 Cape Verde had achievednationwide and reliable telephonecoverage. International telecommuni-cations were secured by bothsubmarine cable and satell iteconnections. The success of the sectoris illustrated by the fact that theEmpresa Publica dos Correios eTelecommunications was makingenough profit not only to cover itsexpenses but also to pay offgovernment loans that it hadborrowed for telecommunicationdevelopment.

In 1992, the government, respondingto new telecommunication realities,decided to create a new regulatorybody, the Direccao Geral dasComunicaçöes. The new regulator,who took over regulatory functionsfrom CTT-EP was first attached to theMinistry of Tourism, Industry andCommerce. A year after its creation itwas transferred to the Ministry ofInfrastructure and Transport.

Direccao Geral das Communicaçoeswas, among other things, responsiblefor developing and enforcing the legalframework in the telecommunicationand postal sector. It was also put incharge of guaranteeing the correct useof Cape Verde’s frequencies.

2.1.1.4 The Legal Framework

In February 1994, the governmentapproved the new Basic Law for theCommunication Sector (5/94),including the postal sector. The lawcovered a number of areas, including:

• Clear definition of public andprivate communication services;

• A telecommunication publicservice which should satisfy thecommunication needs of thepopulation as well as national andinternational economic and socialactivities;

• The basic telecommunicationinfrastructure belongs to thestate and can only be operatedby a public enterprise, through aConcession Agreement;

• The separation of policy andregulatory functions fromoperational functions;

• The definition of competitionrules;

• Conditions for new categories ofservices such as Value AddedServices and mobile; and

• Liberalization of terminalequipment.

A special section of the law wasdedicated to the telecommunicationsplanning and development process,including new technologies andregional cooperation. In order toguarantee harmonized sectordevelopment and gradual marketliberalization, the law furtherstrengthened the government’sresponsibility in the definition oftelecommunication sector policy anddevelopment strategies. For example,government responsibilities nowincluded:

• Radio spectrum and orbitalposition management;

• Cape Verdean representation in allinternational and intergovernmentalcommunication organizations;

• Definition of the general policyand overall telecommunicationsector planning;

• Approval of all telecommuni-cation legislation and regulation;

• Standardization and homolo-gation of all telecommunicationsequipment;

• Concession, l icensing, andauthorization of all commu-nication operators;

• Enforcement of all communica-tion laws and regulations throughcharges, fines and penalties;

• Definition of tariff policy;

A major change called for by the lawwas the separation of telecommuni-cation from postal services.

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2.1.1.5 Separation of posts fromtelecommunications

The government, through thedeclaration for telecommunicationreform, stated the need to respond tothe rapid evolution of the technologyand telecommunication market withefficiency, flexibility and very limitedgovernment intervention. On16 February 1995, it approved DecreeLaw 9-A/95, which laid out the termsand conditions for the separation ofposts from telecommunications.Based on this law, Empresa Publicados Correios e Telecomunicacoes wassplit into two separate enterprises:Cabo Verde Telecom Sarl and Correiosde Cabo Verde Sarl. Cabo VerdeTelecom was reorganized based on aplan for partial privatization. At thesame time a new committee wascreated to assist the government withthe privatization of state-owned publicenterprises, including the one in thetelecommunication sector.3

Soon afterwards, on June 20 1995,the government approved theTelecommunication PrivatizationDecree Law 33/95, which called forthe following steps concerning theprivatization of Cabo Verde Telecom(CVT):

• Forty per cent of CV Telecomshares are to be sold to astrategic partner in aninternational tender;

• Twenty-five per cent of theshares are to be reserved foremigrants and CV Telecomemployees;

• The Government is to keep a“Golden Share”, independent ofthe amount of shares not sold;

• The signature of a ConcessionAgreement, based on the specificlaw for concessions.

After the international tender (inDecember 1995), 40 per cent of theshares were sold to Portugal Telecom(PT) for US$ 20 million. A ConcessionAgreement was signed between theGovernment and CVT on February 17,1996. This Concession Agreement

granted CVT a monopoly for theoperation of basic services and theexclusivity for international commu-nications for 25 years, that is, until1 January 2021.4

2.1.1.6 Universal access

A universal access obligation wasincluded in the Concession Agreementsigned between the government andCVT. It calls for the installation of atleast one telephone in each localitywith more then 200 inhabitants.Clause 22 of the ConcessionAgreement states that a compensa-tion fund shall be created forreimbursing losses resulting fromuniversal access obligations. Theincumbent and all other telecommu-nication operators or service providersshall contribute to this fund. The termsand conditions to establish the fundfor universal access obligations wasto be determined by specificlegislation. However up to today thislegislation has not been put in place.

By the year 2000 CVT, by providingat least one telephone in all241 communities with more than200 inhabitants, fulfilled its universalaccess obligation. In spite of thedifficult topographical conditions of theislands, CVT in some cases eveninstalled telephones in villages withless than 200 people. It has used up-to-date technology, including in themost remote areas. An example isSanto Antão, one of the most ruraland mountainous islands. To fulfill theuniversal access obligation in one ofits villages, where neither electricitynor roads exist and the easiest wayto get there is by boat from thenearest island, CVT incised themountains to install a fiber optical link.In addition CVT has covered most ofthe country with a GSM mobile cellularnetwork.

Universal service—or the availabilityof a telephone in a household—hasprogressed steadily. The percentageof households with a fixed telephoneline increased from 15 in 1992 to 60in 2001, the third highest level inAfrica (after Reunion and Mauritius).5

A major factor is growing wealth. Themonthly fixed telephone subscription


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charge—which has remained the sameprice at ECV 250 (US$ 2.08)—amounted to two per cent of per capitaincome in 2000, down from almostfive per cent in 1992. According toCVT, the fixed market is now saturatedin terms of affordability and somepeople are not paying their bill. Thereis little mobile substitution becausemobile service is costly compared tofixed. Although almost any familycould probably afford a telephone aslong as they do not make internationalcalls, the barrier is the one-timeconnection charge of ECV 3’000(US$ 25). Another bottleneckconstraining home telephoneownership is the lack of electricalenergy. Only half the country’shouseholds had electricity in 2000.This is why mobile telephones, whichrun on batteries, might have a role toplay in achieving universal service. Forexample, mobile phones could berecharged at the same location wherepre-paid cards are purchased.

2.1.1.7 Tariff policy

Tariff regulation is only applicable totelecommunication services offeredunder the monopoly concession. Sincecompetition is theoretically possible(although currently non-existent) formobile and Internet services, tariffregulation for these services do notapply. In practice, tariff regulation hasbeen non-existent since fixedtelephone prices have not changed fora decade and international prices werereduced slightly only once, in 1997.CVT has asked to rebalance its tariffsby lowering international and raisinglocal charges but so far this has notbeen accepted. One user-unfriendlyaspect of telecommunication pricingin Cape Verde is that there is nofractional charging. Users are chargedper unit of conversation whether theyuse it or not rather than by the actualtime they talk. Since units arerelatively long (3 minutes), this is tothe disadvantage of the client.

2.1.1.8 Interconnection

The Basic Law for Communications,DL 5/94 (in article 26) establishes thatthe incumbent must interconnect allother telecommunication operatorsunder the same competitive

conditions. The incumbent is notallowed to take any measures thatcould restrict competition. The lawalso states that the incumbent isforbidden from abusing its power ordominancy. Since there are no othertelecommunication operators, this lawis not actually applied.

2.1.2 Network

Cape Verde’s introduction totelecommunications goes back to1874 when it was a landing point forthe first telegraph submarine cableinstalled between Europe and Brazil.The first telephones were installed in1919. However not much was doneto expand telecommunications for thenext half century. In 1960, there wereonly 188 telephones in the wholenation and the first automatictelephone exchange was only installeda year later.6 Since independence in1975, things have changed. Networkgrowth has been spectacular andtoday Cape Verde has the highesttelephone density of all LDCs (seeFigure 2.1). The nation’s telecommu-nication infrastructure features fullydigitized local exchanges, national andinternational fiber optic links, ISDNservices and a second-generation GSMmobile cellular network.

As mentioned above, telecommuni-cation services in Cape Verde are alegal monopoly of Cabo Verde Telecom(CVT) with the concession runninguntil 1 January 2021. CVT was createdin 1995 when postal services werespun off from CTT-EP. It was partlyprivatized in December 1995 when40 per cent was sold to PortugalTelecom for US$ 20 mill ion.Subsequent sales of shares havereduced the direct state holding to3.4 per cent although it has indirectownership through government-owned funds that have purchasedshares in the company (seeFigure 2.2, left chart). CVT has amajor impact on the Cape Verdeaneconomy. 2001 revenues wereECV 5’213 (US$ 43) million andaccounted for seven per cent of GDP(see Figure 2.2, right chart). CVTemploys 466 persons (1.3 per cent oftotal private sector employment in thecountry) of which 154 (one third) are

11


Figure 2.1: Upward trajectory

Note: “1990 Master Plan Forecast” refers to projections made in the 1990 Telecommunication MasterPlan. “Mobile” refers to Cape Verde’s mobile subscribers per 100 inhabitants. “LDCs” refers to main linesper 100 inhabitants in Least Developed Countries.Source: ITU.

Figure 2.2: Cabo Verde Telecom owners and revenue

Source: ITU adapted from CVT data.

Cabo Verde Telecom share ownership, December 2001 and telecommunication revenues and revenuesas a share of GDP, 1997-2001

Cabo Telecom ownershipDecember 2001

Other nationalprivate14%

Employees5%

Emp. DeAeroportos eSeg. Aerea

10%Government3%

PortugalTelecom

40%

Instituto Nac.Previdência

Social28%

0

2

4

6

8

10

12

14

16

1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Cabo VerdeTelecom createdfrom CTT and

privatized

Independence from Portugal.Cape Verde had the 11thhighest teledensity among

LDCs

Cape Verde becomes the LDCwith the highest teledensity, a

rank it still holds

LDCs

Main telephone lines per 100 inhabitants

CPRM international serviceconcession ends. CTT

changed to publicentreprise.

1990 Master Plan Forecast

Mobile

Cabo Verde Telecom revenues

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

1997 1998 1999 2000 2001

0%

1%

2%

3%

4%

5%

6%

7%

8%

Revenues (US$ m) As % of GDP

12


women. CVT is one of the mostefficient telecommunication operatorsin Africa, with 7.3 employees per1’000 telephone lines. It has mademajor investments in the telecommu-nication sector, averaging around45 per cent of its revenue over thelast five years. Telecommunicationcapital expenditure in 2000 wasUS$ 13.6 million, some 12.6 per centof the country’s gross domesticinvestment.

2.1.2.1 Fixed telephone network

Cape Verde had the world’s fourthfastest growing telephone networkbetween 1990 and 2000 (afterVietnam, China and Cambodia) raisingteledensity from 2.4 in 1990 to 14.3in 2001. The waiting list for atelephone line was reduced from over10’000 to 2’914 at the end of 2001with an average waiting time of just3.4 months, down from over a year in1997. The local network of64’132 main lines is entirelyconnected to digital exchanges, a feataccomplished in 2000. The totalcapacity of the fixed network is77’400 lines. Integrated ServicesDigital Network (ISDN) wasintroduced in 1999 and at the end of2001 there were 550 basic rate ISDNsubscribers and 23 primary rate.

A major challenge has been to connectthe nation’s dispersed islands with highspeed fibre optic cable. Although 100per cent digital microwave and satelliteconnections were available for inter-island communication, in 1997, CVTbegan linking the six most populatedislands by a submarine cable fiber opticsystem. The US$ seven million projectwas completed in 2002.

2.1.2.2 Mobile services

Mobile cellular communications camerelatively late to Cape Verde. Unlikemany other nations, analogue mobiletechnology was never introduced. CVTlaunched its digital mobile GlobalSystem for Mobile (GSM) network inlate 1997. At the end of 2001, CVThad 31’507 subscribers for a densityof seven per cent. The growth rate wasup 60 per cent compared to 2000.7

The network is available on all theislands and population coverage is

estimated at around 90 per cent. Pre-paid was launched in 1998 and by theyear 2001 almost all new subscriberswere pre-paid. In 2001, mobilerevenues were ECV 989 million(US$ 8.2 million), 18.6 per cent oftotal telecom revenues, and up70.3 per cent over the previous year.CVT has roaming agreements with33 foreign mobile operators. The rapidgrowth of tourism is boasting roamingrevenues, which accounted for some15 per cent of total mobile revenues.

The full potential of mobile howeverhas not been realized. Worldwide, thenumber of mobile subscribers passedfixed telephone subscribers in early2002 and more than 100 countrieshave more mobile than fixedsubscribers. Yet in Cape Verde, themobile base only accounted for 33 percent of all telephone subscribers at theend of 2001, one of the lowest ratesamong LDCs and African nations (seeright chart, Figure 2.3). Although thisis partly due to the country’s relativelyhigh fixed line density, it also suggestsrestricted growth in the mobile sector.

The main reason for the limitedsuccess of mobile is the lack ofcompetition. Here Cape Verde is in adistinct minority. At the end of 2001,65 per cent of countries in the worldhad competitive mobile markets.Mobile competition has had a notableimpact on lowering prices, increasingqual i ty and expanding serviceoptions. Cape Verde has not followedthis trend and partaken in i tsbenefits. For example, there is littleflexibility in Cape Verde mobile planswith basically only two options:either a subscription-based plan ora pre-paid package. There is onlyone subscription option with no freeminutes. The connection charge isECV 4’045 (US$ 33.71), monthlysubscr ipt ion is ECV 3’000(US$ 28.41) and the call charge toanother mobile is ECV 25 (US$ 0.21).100 minutes of mobile calls wouldcost US$ 45.83 in Cape Verde,compared to US$ 28.41 in Uganda,a much poorer nation but which hasthree mobile operators. Furthermorethere is no per-second charging, nooff-peak rate and pre-paidsubscribers must recharge their

13


Figure 2.3: Mobile in Cape Verde

Note: GSM network was launched in late 1997.Source: CVT, ITU.

Number of mobile cellular subscribers, Cape Verde and mobile subscribers as a % of total telephonesubscribers, Cape Verde compared to different regions

cards every month or risk being cutoff from the network. Indeed, themobile churn rate was 31 per cent in2001, particularly high consideringthat there is no competitor forsubscribers to turn to. Over8’000 subscribers were disconnectedfor not recharging their pre-paid cardsin 2001.

There is no legal barrier to mobilecompetition as this service is notincluded in CVT’s exclusivity.However the lack of aninterconnection system and doubtsabout a potential competitor beingable to offer international serviceshave delayed the introduction ofcompetition. Nonetheless strategicmobile investors active elsewhere onthe African continent have expressedtheir interest in Cape Verde.

Short Messaging Service (SMS) waslaunched in 2000. 712’752 SMSmessages were sent in 2001 or anaverage of 22 per subscriber per year.There are plans to introduce GPRS andWAP. Considering the relativelyundeveloped nature of the mobiledata market and the s t i l lconsiderable potential for GSM,third generation mobile seems along way off.

2.1.2.3 International traffic

International telecommunications playan important role in Cape Verdebecause of the archipelago’s isolatedlocation and the need for maintainingcontact with its large expatriatecommunity. Revenues from overseastelephone calls have been credited asone reason for the country’stelecommunication take-off beginningin the mid-1980s. This was becausePortugal’s Marconi lost its monopolyover international communications,allowing more of the revenues to bereinvested in the country. Theinstallation of an Intelsat earth stationin 1983 boosted capacity andincreased traffic.

Despite the importance ofinternational communications,incoming settlement payments onlyaccounted for some 25 per cent ofCVT’s revenues in 2001. Though thisis a significant amount, CVT is lessreliant on international revenues thanmany other developing nations. CVThas a notable discrepancy in incomingand outgoing traffic. In 2001, therewere 37 million minutes of incominginternational telephone callscompared to eight million minutes ofoutgoing traffic, a ratio of 4.6:1. The

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

1997 1998 1999 2000 2001

0

1

2

3

4

5

6

7

8SubscribersPrepayPenetration (right scale)

GSM subscribers

34

48

48

53

Cape

Verde

World

LDCs

Africa

Mobile as % of total telephone subscribers,

2001

14


major reason is high internationalcalling prices.

One problem that CVT faces is agrowing volume of refile traffic.8 Thisresults in countries sending telephonetraffic to Cape Verde not paying thesettlement fee, paying in depreciablecurrencies, or paying lower settlementfees than the origination countrywould have paid. Senegal hasemerged as the third largest sourceof incoming telephone calls to CapeVerde, accounting for some 4.4 millionminutes of traffic in 2001. One reasonis that a large amount of refile trafficis being sent via Senegal even thoughthe settlement rate between CapeVerde and Senegal is higher than thatbetween Cape Verde and moredeveloped nations.

The origin of incoming telephonetraffic is becoming difficult todetermine and the data moreirreconcilable. For example, the USreported 17.6 million minutes of trafficto Cape Verde in 2000 and the UK10.5 million minutes, an amountequivalent to what CVT reported asits total incoming traffic for that year.9

The large Cape Verdean communityin the US is one major factor

explaining traffic from that country.The magnitude of the one-way trafficstream is mind-boggling, with trafficfrom the US to Cape Verde 28 timesthat in the other direction. The US isCape Verde’s largest source ofincoming settlement payments,accounting for some US$ four millionnet in 2000. Cape Verde has abidedby the FCC Benchmark order andreduced its settlement rate with theUS to the amount specified in theorder, that is, US$ 0.19 per minute.10

What is significant though is that thisreduction has not been passed on tousers. Tariffs remain the same in CVEterms as they have been since a slightreduction in 1997 (Ironically, theintent of the FCC Benchmark orderwas to create lower rates for USconsumers. However US carriers arenot passing much of the savings onto consumers with mark-ups of up tofour times over the settlement ratefor calls to Cape Verde). CVT’sinfrastructure could handle extraoutgoing traffic thanks to a doublingof international circuits to 538 sincethe entering into service of the AtlantisII submarine fibre cable system in1999. However existing tariffs levelsare unlikely to generate considerableextra demand.

Figure 2.4: Cape Verde's international traffic and pricing

Source: ITU adapted from FCC, CVT and MCI.

Price of a one-minute call and settlement rate from Cape Verde to USA andCape Verde’s international telephone traffic

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

1992 93 94 95 96 97 98 99 2000 01 02

Retail rateCape Verde settlement rateAverage US settlement rate

Price of one minute call from Cape Verde to

USA, US$

0

5’000

10’000

15’000

20’000

25’000

30’000

35’000

1997 1998 1999 2000 2001

Outgoing

Incoming

Cape Verde international telephone traffic,

minutes, 000s

15


The Atlantis-II fibre optic submarinecable and Intelsat satellite assureCape Verde’s internationalcommunications. Atlantis II is an8’500 kilometer cable running fromLas Toniñas, Argentina to Carcavelos,Portugal. It was commissioned in1999. CVT is one of 8 co-owners ofthe cable which has a landing point inPraia at CVT’s headquarters (seeFigure 2.5 ).

2.2 Mass media

Access to mass media in Cape Verdeis high considering the under-development of the sector and a lackof electricity in some locations. Over90 per cent of adult males and around70 per cent of females read anewspaper, listened to the radio, orwatched television in 1998 (seeFigure 2.6). This is due in part to thenation’s relatively high level of literacyand education. Exposure to massmedia rises sharply with education.

Figure 2.5: Cape Verde's umbilical cord

Source: Marconi, ITU.

Atlantis II fiber optic submarine cable route and landing point at CVT headquarters in Praia

While in 1998 two thirds of adultfemales with no education were notexposed to any form of mass media,this figure drops to four per cent forthose with a secondary education.

There is no daily newspaper publishedin Cape Verde. There are two weeklyand several monthly newspapers, allpublished in Portuguese.11 The mostpopular is A Semana with between5-6’000 copies per week. UNESCOdata from 1996 put newspapercirculation at 20’000 or 5.1 per100 inhabitants. Inforpress is thenational news agency. It has a website at <www.inforpress.cv>.

Newspapers in Cape Verde face anumber of obstacles. One is the highcost of newsprint, making newspapersexpensive for many people. Anotheris the dispersed geographic situationof the nation, which necessitatesdelivery by air and adds to costs. Yetanother is competition from daily

16


Figure 2.6: Access to mass media in Cape Verde

Note: Right chart shows percentage of population (15+) who read a newspaper or watch television atleast once a week or listen to the radio daily.Source: ITU adapted from INE, IDSR 1998.

Percentage of households with consumer durables and exposure to mass media,% of adult population, Cape Verde, 1998

newspapers published in Brazil andPortugal. The Internet could helpalleviate some of these problems byhaving copies sent over the Internetto the different islands and printedlocally (or posted on communitybulletin boards). The availability ofweb sites would also cut down on theneed for paper copies and wouldenable local papers to compete moreeffectively with foreign news sites forreaders. A big advantage would beattracting the large expatriatecommunity, hungry for local news.

There is nationwide coverage of radioand TV broadcasting although thereareas of poor reception, especially inthe mountainous regions. Some localTV and radio broadcasts are in thenational Creole language. As withnewspapers, local broadcastingcompanies face competition fromPortuguese and French stations thathave transmitters in the larger townsin Cape Verde.

Radiotelevisão de Cabo Verde (RTC)is the national radio and televisionbroadcaster. It has some 200 staff andis financed by license fees paidthrough electricity bills. RTC does nothave a web site of its own, although

its pages have been hosted by othersites. However this has been an ad-hoc arrangement. There is a proposedproject, co-financed by RadiodifusãoPortuguesa (RDP) of Portugal, toinformatize RTC. The project aims toimprove quality and provide audiostreaming over the Internet. Otherplans include the publication of RTC’sprogramme schedule on the Internet,the exchange of radio programs withother stations around the world, anddigital production.

In addition to RTC, there are five otherlocal radio stations, all broadcastingon the FM band (AM is not used inCape Verde). There are also twooverseas radio networks thatbroadcast using their owntransmitters. Radiodifusão Portuguesa(RDP) Africa service, which broadcaststo Portuguese speaking Africa, can bereceived on four different islands inCape Verde.12 Radio FranceInternationale (RFI), which broadcastsin French and Portuguese, hastransmitters in Praia and Mindelo. 13

Cape Verde has three televisionstations: RTC, RadiotelevisãoPortuguesa (RTP, <www.rtp.pt>), andTV5 Afrique (http://www.tv5.org/

Households with, %, 1998

45

69

39

20

Electricity

Radio

TV

Videocassete

2737

4852

8

51

74 74

None Newspaper Radio Television

Women

Men

Exposure to mass media% of adult population1998

17


1 Troposcatter refers to “tropospheric forward scattering”, a technique allowing radio signals to travel furtherthan they would over conventional terrestrial microwave links.

2 Cape Verde joined the ITU on September 10, 1976.

3 The World Bank played an influential role in this process through a Privatization and Technical AssistanceProject.

4 See the Telecom Portugal Press Release dated 11 December 1996 entitled “Assinado o contrato de concessãoda Cabo Verde Telecom.” http://www.telecom.pt/quemsomos/noticias/artigo.asp?id_artigo=46.

5 A precise measurement of households with a telephone—typically carried out as a part of household surveysor census—is not yet available. The national statistical agency will include this in its next household surveywith the results due in early 2003. In the meantime, a proxy for home fixed line telephone ownership is thenumber of residential telephone lines divided by the number of households. CVT estimates that some 90 percent of all telephone lines in service are residential.

6 The figure for the number of telephones in 1960 comes from AT&T. The World’s Telephones 1961. ATT, NewYork. Out of the 188 telephones in Cape Verde at that time, 80 per cent (151) were in the capital Praia.

7 One boon to mobile growth has been relatively low handset costs due to the practice of emigrants andtravellers purchasing cell phones abroad and bringing them back to Cape Verde.

8 Refile is the practice of routing international telephone traffic via a third country.

9 References to US (FCC) and UK (OFTEL) reports.

10 Cape Verde IS classified as lower middle income for FCC settlement rate benchmark. Therefore it is supposedto have a settlement rate of 19 cents per minute by 1 January 2001. Cape Verde’s achieved this inJanuary 2001.

11 One local newspaper, Resta des Ilas, has a web site at: http://www.expressodasilhas.cv.

12 <www.rdp.pt/frequencias/africa_fm.html>

13 <www.radiofranceinternationale.fr/frequences/portail_listefrequence.asp?codepays=AFC2>

afrique/) (in French). The latter twothematic channels for Africa arebroadcast 24 hours a day.

There is no local cable television.Thirst for multi-channel television ismet by using satellite dishes for thosethat can afford them. Some peopleaccess Portugal’s TV Cabo digitalsatellite service. This requires a large

antenna because the satellite is notoptimized for delivery to Cape Verde.One must also have the means toobtain a decoder card from Portugal.There are no precise figures on thenumber of satellite antennas but it isestimated that there are less than1’000. CVT has been examining thefeasibility of introducing an MMDSbased pay television service.

18


3. The Internet

3.1 History

The Internet developed differently inCape Verde than in many othernations. In most countries, theInternet started as an initiative of theacademic community or adevelopment assistance project. InCape Verde it was the incumbenttelecommunication operator, CapeVerde Telecom (CVT), who firstintroduced the Internet. What is alsounique is that there was no precedingnetworking experience such as UUCP1

for e-mail connectivity.2 An expe-rimental network was launched byCVT in October 1996 with a 64 kbpsconnection to Telepac in Portugal. Theservice was commercialized a yearlater. Cape Verde’s entry intocyberspace was relatively late—it wasthe 29 th African country to getconnected to the Internet—which issurprising considering the rapidexpansion it had made in othertelecommunication areas (seechapter two).

Even today, the Internet is hardlyvisible in Cape Verde. There are fewInternet cafés and the existing onesare difficult to locate. Billboards orother signs advertising web sites oremail addresses are rare andinformation about obtaining a “CV”domain name is not easily available.Nonetheless, there is a Cape Verdeancyberspace with a significant amountof information about the country onthe Internet.

3.2 The market

At the end of 2001, there were2’974 dial-up Internet subscribers inCape Verde, up 21 per cent over 2000.There are no scientific surveysregarding the number of users. Basedon a multiplier of four users peraccount, it is estimated that therewere some 12’000 users at end 2001or 2.7 per cent of the population.Compared to other countries in itsregion or economic classification, Cape

Figure 3.1: Internet subscribers

Source: ITU World Telecommunication Development Indicators Database.

Number of Internet subscribers, users and per 100 inhabitants, Cape Verde and Internet subscribersper 100 inhabitants, 2001, Cape Verde compared to other regions and economic categories

0.1

0.2

0.7

0.8

LDC

Africa

Cape Verde

Lower Middle

Income

Internet subscribers

per 100 inhabitants, 2001

Cape Verde

Rank

17 / 53

3 / 49

7 / 55

0

2’000

4’000

6’000

8’000

10’000

12’000

14’000

1997 1998 1999 2000 2001

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%UsersSubscribersUser penetrationSubscriber penetration

19

3. The Internet

Verde does fairly well in terms ofInternet subscriber penetration (seeFigure 3.1, right chart). However,considering the advanced state of itsinfrastructure, it is surprising that CapeVerde does not have a higher Internetpenetration. These comparisons arebased on subscribers rather than usersbecause the data for the former tendto be more reliable. A comparison basedon users would probably find CapeVerde somewhat behind since itprobably has fewer users per subscriberthan other developing countries due toa lack of public access outlets.

CVT is the only Internet ServiceProvider (ISP). CVT’s revenue fromdial-up Internet service wasECV 117.7 (US$ 0.98) million in 2001,or 2.2 per cent of total revenue.Internet revenue was up 42.3 per centover the previous year and Internetservices are CVT’s third fastestgrowing service (after data andmobile).

3.3 Connectivity

CVT is currently the only ISP sopeering is not yet an issue. It isassumed that CVT has optimized thenetwork so that national Internettraffic stays within the country ratherthan being routed overseas. CVT hasalso developed a portal to provideinformation locally to keep moreInternet traffic within the country andhence reduce the need for expensiveinternational connections.

CVT’s international Internetconnection is via the Atlantis-2 fiberoptic submarine cable to Marconi’sInternet Direct (MID) in Portugal. AtApril 2002, CVT had three Mbps ofsymmetrical international Internetcapacity. It pays US$ 22’000 permonth for the international Internetcircuit. This is somewhat similar toother countries but relatively highwhen one considers that CVT is a partowner of the Atlantis-2 cable.

One proxy for estimating demand forinternational Internet connectivity isthe Bit-Minute Index. It is compiledby dividing international Internetcapacity by minutes of internationaltelephone traffic. It assumes that the

volume of international telephonetraffic approximates demand forInternet capacity. The value for CapeVerde works out to 0.07, which is lowby international comparisons with themedian score worldwide being 0.35.3

Cape Verde would require 16 Mbps ofinternational Internet connectivity tobring it up to the world average. Interms of quality of Cape Verde’sinternational Internet connectivity,CPRM measures round trip latency tosome of the ISPs for which it providesinternational Internet capacity. CapeVerde fairs fairly compared to othernations (see Figure 3.2, bottom right).

There is limited broadband access tothe Internet in Cape Verde. DigitalSubscriber Line (DSL) and cablemodem access are not available. Theformer is not available because CVTclaims the demand is not there andthe latter because cable televisiondoes not exist in the country. Higherspeed lines are either provided viaIntegrated Services Digital Network(ISDN) or leased circuits. ISDN isavailable with either basic rate(64 kbps) or primary rate interface(128 kbps). At the end of 2001, therewere 550 basic rate and 23 primaryrate subscribers. Many of these areusing their ISDN line for Internetaccess. There were also 159 leasedcircuits though it is not known howmany are used for Internet access.The highest leased circuit speedavailable is 256 kbps.

3.4 Pricing

Dial-up Internet pricing plans in CapeVerde are fairly limited and do notencourage heavy surfing. There arethree monthly plans based on thevolume of usage: 1) less than15 hours; 2) between 15-20 hours;and 3) between 20 – 30 hours. Theprice per hour drops marginally foreach higher plan. Also, if a userexceeds the hour quota in the plan,each additional hour is charged at arelatively high ECV 120 (US$ 0.96).There are no pay-as-you-go, flat rateor pre-paid pricing plans. In additionto the Internet access charge, dial-up users are charged telephone usagecharges. The minimum peak time callcharge is ECV 4.5 (US¢ 3.6) for three

20


Figure 3.2: Cape Verde's International Internet connectivity

Source: CVT, CPRM, ITU.

Cape Verde's international Internet bandwidth is growing…

…but is it sufficient?

minutes. Users are charged thisregardless of whether they are on-linefor one or three minutes. There is alsono fractional charging after the thirdminute; users are charged ECV 4.5for each multiple of three minutes. Theoff-peak charging unit is ECV 3.4(US¢ 2.7) per four minutes. Oneadvantage is that dial-up Internetaccess is available from anywhere inCape Verde for the price of a local call.

Dial-up prices are relatively high,particularly for an LDC. Thirty hoursper month of Internet usage—splitequally between peak and off-peaktimes—would cost US$ 27.37(US$ 21.91 Internet charge and

US$ 5.66 telephone usage charge).This puts Cape Verde on the high endwhen compared to other nations theITU has examined (see Table 3.1).

Leased line pricing is steep. Fourdifferent speeds are available: 28, 64,128 and 256 kbps. A 256 kbps leasedline for Internet access involves anECV installation charge of 180’000(US$ 1’447) and a monthly fee ofECV 480’000 (US$ 3’859). ISDNpricing is ECV 10’000 (US$ 80.41) fora basic rate connection charge andECV 1’000 (US$ 8.04) for the monthlyfee. Primary rate connection chargeis ECV 85’000 (US$ 683.44) and themonthly subscription ECV 15’000

3.000

0.064 0.128 0.512

1.5362.000

847

672625

310

112135

1997 1998 1999 2000 2001 Apr-02

International Internet bandwidth, Mbps

Per subscriber

(bps)

0

100

200

300

400

500

VietnamPhilippines Laos Thailand Cape

Verde

Price per 64 kbps of international

Internet connectivity, US$

International Internet bandwidth per

subscriber, 2000, bps

256

272

341

625

1668

2,697

5,291

Guinea

Bissau

Angola

Mozambique

Cape Verde

Portugal

Brazil

Sao Tome

26

42

73

191

207

209

521

658

863

Paris

Amsterdam

Miami

São Paulo

Macau

Praia

Luanda

Maputo

São Tomé

Rount trip time of Internet

packet from Lisbon, April

2002, Milliseconds

21

3. The Internet

Table 3.1: Dial-up Internet pricing

Source: CVT, ITU.

ECV US$

Connection charge 2'045 16.44

Monthly subscription: Less than 15 hours 1'600 12.86 Between 15 - 20 hours 2'000 16.08 Between 20 - 30 hours 2'700 21.71

For each minute over 30 hours 2.00 0.02

Telephone usage: One hour peak 30 0.24 One hour off peak 17 0.14 One hour at Internet Café 250 2.00

(US$ 120.61). Telephone call chargesmust be added to that.

3.5 Potential market size

Cape Verde is under performing interms of its Internet potential. Thenumber of users per 100 inhabitantswas 2.7 in 2001. A number ofassumptions about the potential size

of the market suggest this figure islower than it should be. For example,a linear regression of Cape Verde’sInternet penetration and GDP percapita compared to 143 othercountries forecasts that Internetpenetration should be 3.3 per 100 oraround another 3’000 users more thanthe estimated 12’000 current users.Another indicator that has been foundto be a good proxy for Internetpenetration is newspaper circulation.The figure for Cape Verde is 5.1 per100 inhabitants suggesting that therecould be around 20’000 Internet usersin the country. Yet another proxy forthe potential Internet market iseducation. Over 70’000 CapeVerdeans in the country have asecondary or greater education, whichaccounts for 16 per cent of thepopulation. So why is the Internetpenetration not higher? One reasonis costs. CVT’s entry level Internetpackage amounts to around 12 percent of per capita income. To this mustbe added a telephone line rental,telephone usage charges and a PC,an amount clearly beyond the reachof most Cape Verdeans. However,potential users could avoid theseexpenses by using an Internet caféwhere charges are around US$ twoper hour. Though still relatively steepby Cape Verdean incomes, this is anamount that is not onerous on an

Figure 3.3: Potential Internet users

Source: ITU.

0 10 20 30 40 50

Laos

Vietnam

Cape Verde

Indonesia

Thailand

Philippines

Malaysia

Singapore

ISP Charge

Telephone

30 hours of Internet

Actual12’0002.7%

Secondary+70’76516%

Predicted15’0003.3%

NewspaperCirculation

20’0005.1%

Estimating Cape Verde’s Potential Internet Market

Actual12’0002.7%




20’0005.1% Actual

12’0002.7%




20’0005.1%

Estimating Cape Verde’s Potential Internet Market

22


occasional use basis (and is nine timescheaper than a mobile phone call).

Another reason that there are notmore Cape Verdeans using theInternet is awareness. Many may notbe aware of the Internet’s benefits orexistence particularly since Internetadvertising is non-existent in CapeVerde and Internet cafés are scarceand hard to locate.4 Special initiativeshave led to the opening of severalInternet cafés (see Box 3.1).Considering that the Internet markethas significant potential, efforts tolower tariffs and increase public accesscould yield significant growth in users.

3.6 Regulation

Decree 70, approved 20 November1995, establishes terms andconditions for Value Added Services.According to the concept of ValueAdded Services stated in article 2, “alltelecommunication services whoseunique support is the basictelecommunications services orcomplementary services, and do notrequire separate infrastructure but aredifferent from the support conductingservices, are Value Added Services”.This law also regulates the licensingof Internet Service Providers.

Licensing of an Internet ServicesProvider is made through a simplegovernment authorization as indicatedin article 3 of GovernmentalOrder 69/95. This GovernmentalOrder states that any Value AddedService provider may operate in CapeVerde. The appropriate authorizationwill be issued on request and on acase-by-case analysis. The servicehowever must be offered according tothe terms and conditions of theapplicable laws and regulations.

The regulation of the Internet in CapeVerde foresees a Code of Practice,which all ISPs must subscribe to andrespect. Informative services must bedifferentiated from commercial onesand from those for entertainment.

The Basic Law for Communicationsestablishes in article 26 that theincumbent operator must interconnectall other telecommunication operators

under the same competitiveconditions. It is strictly forbidden forthe incumbent operator to take anymeasures that could inhibitcompetition in Cape Verde. Inaddition, the same law states that itis forbidden for the incumbentoperator to either abuse its power oruse dominant behavior. On the otherhand, the same article 26 says thatISPs are not allowed to use leasedcircuits or dial up connections offeredby the incumbent operator for anyother use than the one they have beenrequested for.

Although legally the Internet marketis open, CVT is currently the only ISP.One reason may be uncertainty overinterconnection and the use of leasedcircuits. Another is that it wouldappear that CVT has a legal monopolyover international connectionspreventing potential ISPs fromestablishing their own internationalgateways.

3.7 Curriculum Vitae

Cape Verde’s Internet domain name,CV, is administered by the InstitutoSuperior de Engenharia e Ciências doMar (ISECMAR), a technical institute ofhigher learning. Therefore all requestsfor a domain name must be addressedto ISECMAR. However ISECMAR onlyissues the domain name afterconsultation with a Portugueseorganization, which is also in charge ofthe Portugal Domain Name System(DNS) as well.5 This situation is due tothe lack of equipment in ISECMAR tomanage the Cape Verde DNS. The nameserver and technical contact are locatedin Portugal, at Fundacao Para AComputacao Cientifica Nacional(www.fccn.pt). RIPE is the regionalInternet registry for Cape Verde.

There is no fee for a CV domain name.Only organizations from Cape Verde canregister a CV domain name. Trademarksare protected. Second level domainnames (e.g., .gov.cv, .com.cv, etc.) arenot used. At April 2001, there weresome 60 registrations. Growth of the.CV domain has been sharp since RIPEbegan collecting statistics in October1999. At that time there were onlysix hosts and one web site. By March

23

3. The Internet

2002, these figures had risen to 36 and30 respectively (see Figure 3.4).

In some countries, domain names areperceived to have value (e.g., .TV

Figure 3.4: Cape Verde Internet hosts

Source: RIPE.

Box 3.1: Santa Catarina Telecentre

From the outside, the TelecentroComuntario de Assomada doesnot look like an Internet café. Itis a nondescript ochre coloredbuilding that looks like it couldsomebody’s house. Paper postersadvertising the telecentre keep ongetting blown away in the steadywind so the staff is thinking abouta more permanent neon sign. Thetelecentre is located in the townof Santa Catarina, the secondlargest on the island of Sao Tiagowith a population of 42’000. A US$ 50’000 project ofthe International Telecommunication Union (ITU,www.itu.int) and Cabo Verde Telecom (CVT,www.nave.cv), the incumbent telephone company,the telecentre opened in May 2001. CVT is providing50 per cent discount ontelecommunication and Internetaccess during the first year. Thetelecentre has a 64 kbps ISDNconnection to the Internet.

Members of the some3’000 strong Women’sAssociation of Santa Catarina,operate the telecentre. Twopeople staff it during workinghours, 8 am – 10 pm daily exceptSundays. The only male involved

in the operations is the guard.Services available includerecharge of mobile prepaidcards, purchase of telephonecalling cards, public phone calls,Internet access, PC applications,photocopying, printing, and fax.Drinks and snacks are alsoavailable. The price of Internetaccess is 150 Cape VerdeEscudos per hour (US$ 1.25),less expensive than at the othertwo Internet cafes in town.

Clients of the five PC telecentre include studentsand professors from a nearby school as well asresidents of the local community. There are around60 users per day each using it on average of half

hour. There is an extra table forpeople to wait, as the telecentretends to get crowded during peaktimes.

PC and Internet access trainingfor women is in the pipeline.There is also a plan to introducean e-commerce component tosell handicrafts made by localwomen. This would includedigitizing the products anddisplaying them on a web site.

stands for Tuvalu and is of commercialinterest to TV operators). In the caseof Cape Verde, the domain name isan abbreviation for curriculum vitae.The nation was approached by acompany that wanted to purchase thedomain name in order to use it forstoring people’s resumes. This requestwas turned down. However there isone web site using the .CV domainname that provides this service<http://my.cv>.

There is no content control in CapeVerde nor does this seem to be anissue of concern at this stage with sofew domestic web sites. The use ofPortuguese in Cape Verde expands theuniverse of web content. Althoughprecise figures are not available, mostCape Verdeans surf to overseas sites,particularly in Portugal and Brazil (seeBox 3.2). The large Cape Verdeanexpatriate community in the US hasalso created many web sites withwww.visaoonline.com reputed to beone of the most popular.

.CV Hosts

0

5

10

15

20

25

30

35

40

Oct-

99

Dec-

99

Jun-

00

Dec-

00

Jun-

01

Dec-

01

Mar-

02

Hosts

WWW Sites

24


Box 3.2: The Lusophone connection

Discovered by the Portuguese in the 15th century,Cape Verde is part of the lusophone world.6 ThoughCreole is the main language in Cape Verde,Portuguese is the official one, used in school andeasily understood by around one third of thepopulation.7 Portugal left its mark on some half adozen countries around the world. Today thesenations—Angola, Brazil, Cap Verde, Guinea-Bissau,Mozambique and Sao Tome and Principe—along withPortugal are formally grouped in the Comunidadedos Países de Língua Portuguesa (Community ofCountries of the Portuguese Language).8

The ties extend into the ICT sphere. The Associaçãodos Operadores de Correios e Telecomunicaçõesdos Países e Territórios de Língua Oficial Portuguesa(AICEP) unites postal and telecommunicationorganizations in the lusophone world.9 Therelationship is also reinforced through PortugalTelecom’s (PT) part-ownership of telecommuni-cation operators in all of the former colonies exceptMozambique. There is also a digital tie withlusophone Africa connecting to the internationalInternet via PT’s Marconi Internet Direct (MID)service.10 The web of lusophone trade and travel isreflected in telephone traffic statistics. There werearound 160 million minutes of international phonecalls in Portuguese in 2000, or about a minute per

Portuguese speaker. For the African lusophonenations, roughly 50 per cent of their telephonetraffic is with other Portuguese-speaking countries(see left chart below).

The Portuguese language is a large market withclose to 200 million speakers in around 30 countries.Countries where the language is spoken canleverage on a growing electronic content base.Portuguese broadcasters beam radio and televisionprograms around the clock via satellite that isdownloaded and retransmitted over local stationsin all lusophone nations. Portuguese is the 9th largestlinguistic group on the Internet with some 15 millionusers, a figure forecast to almost double over thenext few years (see right chart below).11 As morePortuguese users go online, lusophone web siteswill grow. Countries like Cape Verde can leverageon Portuguese content to expand the universe ofinformation available to them. For example thereare around 25 million Portuguese web pages aroundthe world compared to some 1’500 Cape Verdeanweb sites. But this extra content may be a double-edged sword by discouraging the development ofCape Verdean web sites and content in the Creolelanguage. One irony is that there is more promotionof Creole in the United States—home to many CapeVerdean emigrants—than in Cape Verde.12

Box Figure 3.1: Communicating in Portuguese

Distribution of international telephone traffic in lusophone nations, 2000 anddistribution of Internet users by language, March 2002

Source: ITU DOT database, Global Reach (global-reach.biz/globstats).

0% 20% 40% 60% 80% 100%

Angola

Brazil

Cape Verde

Guinea Bissau

Mozambique

Portugal

Sao Tome

Portugal Other Lusophone Non Lusophone

Distribution of international telephone traffic,

2000

Spanish

7%

German

7%

French

4%

Italian

4%

Korean

4%

Others

10%

Dutch

2%Portuguese

3%

Japanese

9%

Chinese

10%

English

40%

Internet users

by language

March 2002

25

1 UUCP stands for UNIX-to-UNIX Copy Protocol. It refers to a technique that makes it possible to copy a filefrom one computer to another via a telephone line. It is used for Usenet news and electronic mail. UnlikeTCP/IP (which is used for the Internet), UUCP requires that a session be established between the twocomputers in order to transfer files.

2 SITA, the airline industry telecommunication provider, did provide Internet access for some private networksand it was possible to dial-up to Portugal. However these solutions were expensive substitutes for the lack ofdirect public Internet connectivity.

3 See TeleGeography. Packet Geography 2002. September 2001. TeleGeography. Washington DC.

4 It is estimated that there are roughly a dozen Internet cafes in Cape Verde (4 in Praia, 3 in Santa Catarina,2 in Mindelo, 1 each on islands of St. Antao and Sal). The first opened in May 1998 at the PortugueseCultural Centre in Mindelo. See Nuno Galopim. “Um cibercafé no Mindelo. » Diário de Noticias. Lisbon.28 October 1998. www.instituto-camoes.pt/arquivos/geral/cibercafemindelo.htm.

5 Brief technical information about the CV DNS is available here including the ability to check whether adomain name is in use: http://www.dns.cv.

6 Lusophone is derived from the Latin word Lusitanus, referring to an area equivalent to today’s Portugal.

7 See the Ethnologue web site at: http://www.ethnologue.com/show_language.asp?code=KEA.

8 The idea of creating a community of Portuguese-speaking nations was launched in Cape Verde in 1983during a speech by the Portuguese Minister of Foreign Affairs. See “A História” on the CPLP web site:http://www.cplp.org.

9 Its 10th Forum was recently held in the Cape Verdean city of Mindelo. See http://www.aicep.pt.

10 http://www.cprm.net.

11 http://www.glreach.com/globstats/.

12 For example see the Capeverdean Creole Institute site at <www.capeverdeancreoleinstitute.org>.

3. The Internet

26


4.1 Government

The Cape Verde government isprobably the country’s major Internetuser. This situation has come aboutin the last few years, primarilybecause of a World Bank financedproject. While few computers withinthe government had a dial-up Internetconnection in early 1999, Informationand Communication Technologies(ICT) developed quickly. Six monthslater, ten ministries and 500 PCs hadbeen connected to the Internet. Bythe end of 2000, all ministries (across50 buildings in the capital, Praia) and1’400 computers had connections tothe Internet. Today the governmentLocal Area Network (LAN) coversevery ministry and gives Internetaccess to some 2’000 governmentemployees (some 13 per cent out ofa total 15 thousand).

ICT are starting to have an impact onthe way the government works. E-mailis increasingly and routinelyexchanged both between and withingovernment agencies and it isestimated that there has been at leasta five per cent reduction in paper. Thiscould rise much higher if morepersonnel were connected andprocedures were changed todiscourage paper files. A number ofonline databases have also beencreated for use by governmentagencies. This has facilitated andimproved administrative procedures.

A number of factors have contributedto this initial success. One is the highlevel of good governance andtransparency in Cape Verde. Thereseems to be less resistance to theintroduction of ICT than in otherdeveloping nations where governmentemployees feel threatened, whereownership of information is perceivedas a source of power or where somestaff may even benefit from a lack oftransparency. Another contributing

factor is the clever use of foreignassistance to develop governmentcomputer systems. This includesleveraging projects that do not havea direct ICT component but where theinstallation of computer infrastructureand training can be justified on thegrounds of improved publicadministration. Skilled and dedicatedpersonnel are another reason forsuccess. There is a core of trained andmotivated staff working tocomputerize the government. Yet,another factor is Cape Verde’s smallsize that simplifies the task ofconnecting central governmentagencies.

Despite the achievement of creatinga central government LAN, there area number of problems. One is a limitedhigh-level recognition of theimportance of ICT and the lack of anational policy and strategy forpromoting and developing e-government. Most governmentcomputerization is focused on thedevelopment of internal applicationsand there are only few, citizen typeapplications. Another problem ispricing, with few telecommunicationdiscounts available for governmentagencies. This adds to the cost ofdeveloping the governmentalnetwork, particularly in areas outsidethe capital Praia. It also results in sub-optimum technical solutions becauseof a lack of options and the need tosave money.

4.1.1 RAFE

RAFE (Reforma da AdministraçãoFinanceira do Estado) <www.gov.cv/rafe> stands for the ‘Public FinanceManagement Reform Group’. From itsname, one would hardly guess thatRAFE is the driving force behind CapeVerde’s government computerizationefforts. The reason is that it was notsupposed to be. RAFE was created in

4. Sector absorbtion

27


1998 within the context of a WorldBank project on public sector reform.RAFE’s initial tasks were to:

i. Improve the quality andavailability of public finance data;

ii. Increase the accountability of theuse of public resources by allpublic institutions;

iii. Improve the management ofexternal and internal debt; and

iv. Develop capacity to managepublic resources at themunicipalities, which acquiredfinancial autonomy with the 1998Local Finance Law.1

The development of computersystems and training were essentialin order to carry out those activities.RAFE initially established a Local AreaNetwork (LAN) to connect the Ministryof Finance with the main governmentbuilding (Palacio de Gobierno) acrosstown. Soon afterwards RAFEconnected the government to theInternet via a 256 kbps leased line.

While the network was initially usedas a tool to support financial systems,its success led to a new role for RAFE.Suddenly everyone wanted RAFE’sservices and they could not provideInternet connections fast enough. Aproject for computerizing the Ministryof Justice was entrusted to RAFE. Thepopularity of its technical serviceshave accidentally made RAFE one ofCape Verde’s driving ICT forces. TodayRAFE is as much involved in technicalissues as it is in providing financialapplications. Within two years, RAFE’sstaff increased from three techniciansto 50, around 30 of which have auniversity degree. And, according totheir staff, they are still not enoughto cope with all the work there is.Ultimately RAFE wants to connect allgovernment agencies—including thelocal governments—across all of CapeVerde’s islands to the governmentnetwork, and provide schools and not-for-profit organizations with Internetaccess.

RAFE has created an internal databaseand applications to facilitate themunicipalities’ accounting system anda database on the government’s humanresources (including information onstaff, their CV, photo, etc.). RAFE hostssome 20 government sites, with theserver located in the Ministry ofFinance. RAFE’s tasks also includetraining on how to use the Internet,email and government databases.Some training modules are availableonline, and staff can follow them attheir convenience.

RAFE is planning to make publicadministration more user-friendly byproviding government forms andservices on the Internet. This wouldinclude a one-stop portal unitingdif ferent act iv it ies in a s inglelocation. For example, importing andregistering a car in Cape Verderequires completion of almost adozen forms located at multiplelocations. With RAFE’s solution, thepaperwork associated with anautomobile might be as easy as amouse-click. RAFE also wants to helpCape Verdeans living abroad to stayin touch with home, by creatinguseful content.

Figure 4.1: RAFE at Work

28


Despite RAFE’s success, they still wantto achieve more. According to one RAFEmanager, Cape Verde is far from havingan e-government: “E-government is apolitical commitment. It is greatbecause we have 2’000 people in thegovernment on the Internet but thisdoes not means that this is goodenough. These people are themanagement of the government but weneed to provide access to everyone.Once we have universal access to theInternet, THEN we can start talkingabout e-government.” Comments suchas this one help to understand the wayCape Verdeans think and work andsuggest that it is vision, enthusiasm andthe right amount of self-criticism thathelps them to make progress.

RAFE does not receive a discount fortelecommunication charges and paysregular access rates like any othercustomer. When RAFE first set up thegovernment LAN, it used ISDNbecause the terminal equipment wasrelatively cheap and there were noother alternatives for dedicatedconnections. RAFE has sinceconverted the ISDN connection tocheaper leased circuits and microwavewireless connections, reducing costs

Box 4.1: The benefits of ICT in the government sector

The use of ICT by the Cape Verdean governmenthas been greatly facilitated by World Bankassistance through the Public Sector Reform andCapacity Building Project (PSRCBP). This projecthas been instrumental in efforts to achieve thegovernment’s vision of “an efficient and modernpublic sector.” The first project, with a budget ofUS$ 8.1 million, ran from 1994-1999. According tothe World Bank, achievements in the area of ICTincluded:

• “The PSRCBP has made progress inmodernizing the civil service throughextensive technical and computer training…

• The PSRCBP has strengthened economicmanagement through training andcomputerization of key ministries.

• A macroeconomic model (RMSM-X) has beeninstalled, as well as a managementinformation system for the Public InvestmentProgram (PIP).

• The National Institute of Statistics (NIS) hasbeen established with a broader capacity andmandate to coordinate statistical analysisacross government agencies.

• The Ministry of Justice has been largelycomputerized and staff have been trained tobecome computer literate.”

The World Bank concluded that the “extensivetechnical and computer training of civil servants,have led to an improvement in public administrationefficiency and productivity.”

A second PSRCBP project was approved in 1999and is scheduled to run through the end of 2002.The project cost is US$ 3.5 million of whichUS$ 1.2 million is dedicated to computers, softwareand networking. US$ 3 million is to be financed bythe World Bank with operating costs covered bythe Cape Verde government. One goal of the secondphase is to improve the availability of informationavailable to the public.

to one tenth. Connecting sites in thecapital is relatively cheap becauseleased line prices are charged at localrates, which are far less expensivethan long distance leased lines. Thishas limited the network to Praia. Planscall for using wireless links to connectgovernment nodes outside of Praiaand then connect governmentalservices to the node at cheaper localleased line rates. For example, thereis a plan to connect a police station inthe middle of the island of San Tiagoto the government network. Othergovernmental services such as schoolsand the local administration would thenpiggy-back off the police station’sconnection. One problem is extendingthe RAFE network to other islands sincethey are too far away to be connectedby the wireless microwave connection.The logical choice would be to utilizeCVT’s inter-island fibre network that hasconsiderable excess capacity. However,this can only be done if CVT providesconcessionary prices for thegovernment. In the meantime,government agencies outside Praia areusing dial-up connections.

RAFE has gone far beyond what is wasinitially intended to be. Recognizing

29


its importance, the Prime Minister hasagreed to institutionalize RAFE, toprovide it with the necessary regulatoryframework and to make it independentfrom the Ministry of Finance. As anindependent entity, RAFE could startcharging for its services and becomefinancially sustainable. A developmentin this direction might also bewelcomed by the private sector, whichsometimes sees RAFE as a competitor.Since the government in Cape Verdeis itself the major ICT market, andRAFE its only ICT provider, privatecompanies feel left out.

4.1.2 The government online

The official Cape Verdean governmentweb site is <www.governo.cv>. Thissite includes basic information aboutthe government, decrees, news andlinks to other government ministriesand agencies. Most governmentagencies that are online are part of the.gov.cv domain such as the Ministry ofFinance and Planning <www.gov.cv/minfin>. Agencies that have their ownweb sites include the National StatisticalInstitute <www.ine.cv>, the centralbank (Banco de Cabo Verde)<www.bcv.cv> and the Presidency<www.presidenciarepublica.cv>. Whilesome links, for example, those for theMinistry of Education, Science, Youthand Sports and the National Assemblywere not active at the time of thisreport, other sites provide usefulinformation and are clearly structured.Another site (www.gov.cv/segindex.html) is used by governmentemployees to access internaldatabases and allows them to checktheir email when away from theiroffice.

4.1.3 ICT strategy

The idea for a national ICT strategyfor Cape Verde had its roots in aConference of Ministers of theEconomic Community of Africa in May1995 that adopted a resolution on“Building Africa’s InformationSuperhighway.”2 This led Cape Verde,along with eight other African nations,to draw up a plan for the developmentof Information and CommunicationTechnologies. The Minister ofInfrastructure formed a groupconsisting of representatives of the

General Direction of Plan, PedagogicalInstitute, National Statistical Instituteand Cape Verde Telecom to preparethe plan. A consultative meeting washeld with different public and privatesector representatives in October1999 to obtain their input. The planhas been drafted and presented to thegovernment.3 When approved,funding will be sought to carry out theprojects identified in the plan.

The plan identifies a Cape Verdeanvision for ICTs:

• A country equipped withinfrastructure and modern ICT atthe service of development andcultural, technological andeconomic integration;

• A country equipped with a strongand dynamic productive sectorhaving as its base newtechnologies; and

• A country equipped withendogenous competency in thefield of ICT.

The report outlines a number ofgeneral and specific objectives for ICTin the nation. It identifies nationalneeds in a number of different areasincluding policy, education andtraining, communications, health,private sector and publicadministration and contains specificprojects in those areas (see Table 4.1).

4.2 Education

The last decade has beencharacterized by an increasedemphasis on education and efforts toinvest in future generations. Theeducational sector has traditionallyreceived the lion’s share of thegovernment’s resources with some18 per cent of the total governmentbudget spent on education. Thegovernment, through the Ministry ofEducation, Science, Youth and Sports(MESYS) recognizes that only aneducated and flexible population andwork force will be able to respond tothe country’s social and economicneeds. There has been remarkableprogress in establishing andexpanding the primary and secondary

30


Table 4.1: Cape Verde's ICT needs

Sector

Policy

Education and Training

Communications

Health / Agriculture

Private sector

Public administration

Needs

• Study on the development of a nationalstrategic plan

• Definition of a national policy on ICTs• Study on the regulation of informatics

and ICT

• Creation of a national informationsystem for education

• Informatization of administrative andacademic services

• National educational network• National information system for tertiary

institutions• National system of tele-education• National research and investigation

centre• National plan for connecting secondary

schools to the Internet• Creation of resource centres in

secondary schools• Creation of wide area network and

mass-media labs in basic schools• Creation of community mass media

centres for education• Training in ICTs

• Creation of a Centre of Excellence• Intelligent Network project in

conjunction with spectrum control• Project for laboratory for equipment

certification• Creation of Internet cafés both fixed

and mobile• Creation of multiple use community

telecentres• Study on the introduction of e-

commerce

• Creation of a national informationsystem for health

• Informatization of administrativeservices

• National network for health• Training

• Study on the use of ICT in the privatesector

• Development of a nationaladministrative network connecting allsectors and services

Proposed projects

• Distance learning• National network of

education andinvestigation

• E-commerce portal• Mobile cyber café• Multiuse community

telecentre• Installation of Internet

access at post offices• E-mail to regular mail

(and vice versa) service• E-commerce support for

post office

• National system ofhealth, investigation andtraining

• Database on coastalareas

• E-Citizen portal• Expansion of National

Statistical Institute webservices

Source: Plan National de Développement d’Infrastructure des TICs.

31

education system. In 1994, forexample, the basic educational levelwas extended to six years andprimary education was madecompulsory. A series of reforms overthe past few years have furtherimproved the educational systemand school enrolment has steadilyincreased.

Efforts to develop the human resourcebase of the nation and to modernizethe educational system today includethe use of Information andCommunication Technologies (ICT). In1998 the government, in Resolution8/98, emphasized the importance ofICT in schools and came up with someconcrete objectives. Students shouldhave some contact with a personalcomputer by the time they reach theirfifth year of schooling. Basic ICTtraining should be provided by seventhgrade. The Resolution furtherhighlights the importance of distancelearning as an additional andcomplementary element of education.

As in other areas, the government hasreceived funding and support fromdevelopment agencies. Efforts toimprove the educational sector arebased on close cooperation betweenthe Ministry and developmentpartners and involve concrete andeffective projects. In fact, mostprojects l inked to ICT in theeducational sector involve at least onedevelopment partner.

4.2.1 PROMEF

The Education and TrainingConsolidation and ModernizationProject (Projecto de Consolidação eModernização da Educação eFormação, PROMEF, <www.gov.cv/promef>) has been intimately involvedin promoting ICT in education. PROMEFis primarily financed by the World Bank(with US$ six million the World Bankcovers around 80 per cent of theproject’s costs) with the MESYS and thePortuguese Calouste GulbenkianFoundation <www.gulbenkian.pt> asco-founders and financial supporters.The project was officially initiated in1999 and its goals are to “maintain andconsolidate the recent reforms inprimary education and workforce

development; undertake acomprehensive education sector reviewand evaluation of employment andtraining policies and programs; enablethe field-testing and/or adaptation ofnew teaching and learning packages,technologies, and school basedinitiatives to improve quality andefficiency; and strengthen theinstitutional capacity of the Ministry ofEducation…in delivering theirprogram.”4

PROMEF’s role is not limited toanalysing and it determines ways ofimproving and changing theeducational system, especiallythrough the exploitation of ICT. Oneof PROMEF’s undertakings, thedevelopment of the ManagementInformation Systems, involvescreating databases containinginformation on the educational sector.So far, the following six databaseshave been or are in the process ofbeing established:

1. A statistical database with basicinformation from each school(the number and name ofstudents and teachers, grades,curricula, etc). The idea is thateventually every school will enterits own information.

2. A database for evaluating andtracking students’ work. Thisdatabase will provide successrates by age, grade, sex, subject,etc. and will help to understandthe major problems studentsface and ways to improve theeducational system.

3. A budgetary database for theMESYS, which will allow it tooversee its finances.

4. A human resource database withinformation on the MESYS’s staff.

5. A database on scholarships,including the number of studentsstudying abroad; the countrythey are studying in; the subjectsand courses they take, etc.Students will also be able toaccess this database and find outhow to apply for a scholarship.


32


6. A student database withinformation on each student,including grades, evaluation, etc.This is currently being tested inone of the secondary schoolswith Internet access.

PROMEF, in cooperation with RAFE,was planning to provide all the schoolsin the country with an Internetconnection but the necessary fundingwas not available. Despite the effortsthe Cape Verdean government hasmade to promote the educationalsector and the success it has had inimproving the basic and secondaryschool system, there are no concreteplans to supply all schools with PCs orconnection to the Internet. There isalso a lack of coordination betweenprojects in the educational sector.While RAFE has been able to achievemuch and help the Ministry to makeuse of applications and spread ICT, itis also in charge of all the othergovernment ministries. Its projectsare therefore not specifically aimed atthe educational sector and itspossibilities are limited.

4.2.2 Primary and secondaryeducation

Cape Verde has made tremendousstrides in improving access to primaryand secondary education. Primary

Table 4.2: Cape Verde at school, yesterday and today

Source: Ministério da Educaòâo, Ciéncia, Juventude e Desporto,Gabinete de Estudos e do Desenvolvimento do Sistema Educativo.

1990/91 2000/01 Change

Primary education

Total number of students 69’823 90’186 29%

Enrolment rate 89% 96% 8%

Number of teachers 2’186 3’110 42%

Secondary education

Total number of students 9’766 48’437 396%

Enrolment rate 20.3% 45.8% 126%

Number of teachers 364 1’961 439%

school enrolment was already high asfar back as 1990 (89 per cent) and wasnearly universal in 2001 (96 per cent)(Table 4.2). The secondary schoolenrolment rate, however, has drasticallyrisen, by well over 100 per cent. Whileit stood at only 20.3 per cent in 1990,it is now at almost 46 per cent.

Basic education is six years,compulsory and free of charge.Secondary education, which is notcompulsory but is free of charge, isanother six years. It is divided intothree cycles of two years each withvocational training in the final year.At the beginning of 2001, there were424 primary schools, with90’186 students (some 44’000 femaleand 46’000 male students) and3’110 teachers. There are plans totrain primary teachers basic ICT skillsso that they can teach their studentsbut currently only very few primaryschools have PCs and access to theInternet. While there were only threesecondary schools in 1980, there are27 today, all of which have a PC. Ninehave access to the Internet.

Schools with Internet access use dial-up service. While they pay the usualtelephone usage charge, Cape VerdeTelecom offers them a 50 per centdiscount on the Internet access

33


charge. A project called “Telésalas”,initiated by the MESYS and incooperation with Telecom Portugal andCabo Verde Telecom, was to provideall secondary schools with Internetaccess but it was never implemented.RAFE is now planning to connect allsecondary schools to the governmentnetwork. Some secondary schoolsoffer basic ICT courses but thesecourses, where available, remainoptional. One problem the schools faceis the lack of technical know-how.While some schools cannot exploit PCsbecause they do not know how to usethe basic applications, other schoolshave problems with the configurationand basic maintenance. Many schoolsalso have problems with viruses.

4.2.3 Tertiary education

Education at the tertiary level islimited. There are five institutes ofhigher learning and one recentlyopened university. There are anestimated 1’500 higher educationstudents in Cape Verde. Most studentspursing higher studies must go abroaddue to a lack of facilities in Cape Verde.The government, often in cooperationwith donors, provides scholarships foroverseas studies. Around 2’000 CapeVerdeans are pursuing tertiary studiesabroad, primarily in Brazil andPortugal.

Table 4.3: Institutes of higher education in Cape Verde

Source: ITU.

School Number Subject Web siteof Students

Instituto Pedagógico (IP) 613 Teacher training www.gov.cv/ipcv

Instituto Superior de Engenharia 310 Technical www.isecmar.cv e Ciências do Mar (ISECMAR)

Instituto Superior de Educaçäo Teacher training (ISE)

Instituto Superior das Ciência Business Económicas Empresariais (ISCEE)

Instituto Nacional de Investigação Agriculture e Desenvolvimento Agrário (INIDA)

Jean Piaget University 500 University

Unlike other nations, the introductionand nurturing of the Internet did notspring from the academic sector.However, Cape Verdean tertiaryinstitutions are starting to enhancetheir information technology situation.All now have Internet access and acouple have web sites. The recentlyestablished university, Jean Piaget,has applied to be a Cisco NetworkingAcademy (see Box 4.2). The nation’sinstitute of higher education fortechnical subjects, ISECMAR, isresponsible for the country’s domainname.

4.2.4 Tele-education

Tele-education has great potential,especially in a country that isgeographically separated and dividedinto several islands and that has arelatively under-developed tertiaryeducational system. The MESYS isaware of these benefits and initiated atele-education project, in cooperationwith the government in Brazil and theInstituto Pedagógico in Cape Verde.5

Currently, the project is on stand by,due to a lack of funding. There havebeen other tele-education projects inthe past. One was a radio-basededucational network for teacherssponsored by Dutch assistance. CapeVerde is also supposedly participatingin the World Bank sponsored African

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Box 4.2: Training IT professionals

If Cape Verde is to effectively participate in theInformation Age, it needs a workforce with IT skills.Informatics training is available at small, privatecompanies that typically offer courses in desktopapplications such as word processing. RAFE (seesection 4.1 above) also organizes basic IT coursesfor government workers and specialized training forits own staff. The calibre of RAFE’s staff is reflectedin a Microsoft training course.The teacher who was broughtfrom Portugal noted thatusually only half the studentsget half way through the courseand maybe one or two finishit. In the case of RAFE, allfourteen students taking thecourse passed it. Why?According to a RAFE managerCape Verdeans do not miss anopportunity when they haveone.

Instituto Superior deEngenharia e Ciências do Mar (ISECMAR)<www.isecmar.cv>, has been the only institute ofhigher learning providing advanced technicaltraining in engineering, informatics andtelecommunications. Located in Mindelo on theisland of Sao Vicente, ISECMAR started as amaritime academy (1984) but has existed in itscurrent form since 1996. The number of studentshas been increasing and currently there are 310.PCs are available in a number of specialized labsand used to incorporate information technology withthe subject being taught. There is also a PC roomwith free access to the Internet (see photo),although it is often slow, according to ISECMARstaff. ISECMAR has a 64 kbps ISDN line for Internetaccess; it does not receive a discount despite beingan educational establishment. Courses are overthree years, plus an additional six months trainingwithin a company. Students graduate with an

undergraduate degree and ISECMAR is hoping tooffer a master’s degree from 2003. ISECMAR is alsoformally charged with administering the .CV domainname though the actual server is located in Portugal.

The Jean Piaget University was founded as CapeVerde’s first university in 2001. It has 500 studentsand offers 2- and 3-year degree programs in various

fields including ComputerScience. The University has twofully equipped computer labswith 18 PCs each. Both labs arenetworked and have a minimum64 kbps dedicated Internetconnection. The University alsohas an on-site computermaintenance team that looksafter the information technologyinfrastructure.

In an effort to add to its ITtraining possibilities, CapeVerde has applied to the ITU’s

Internet Training Centers Initiative for DevelopingCountries (ITCI).6 Launched in 2001, ITCI plans toestablish 50 Internet Training Centers in developingcountries to provide instruction on Internet Protocol(IP) networks and services. While ITCI willeventually work with different partners, it is startingas a venture with Cisco Systems which will provideits Cisco Networking Academy Program (CNAP).CNAP is a hands-on course designed to teachstudents the skills needed to design, build andmaintain small to medium-size IP based networks.The program consists of a 280-hour curriculumdelivered over approximately nine months (four70-hour semesters). This prepares students for theCisco Certified Network Associate exam, an industrystandard certificate. The joint ITU/Cisco project,which is currently being discussed with the CapeVerdean government, and the Jean PiagetUniversity, would provide a useful source of training.

Virtual University, but no information isavailable about this.7 Tele-educationprojects do not seem to have beensuccessful and information about theexperiences is lacking. This area meritsfurther study to see what the barriersare to implementing tele-education inthe country and how they can beovercome.

4.3 Health

The use of Information andCommunication Technologies (ICT)within the Cape Verdean health sectoris relatively basic. While the Ministry

of Health makes use of computers andthe Internet – particularly email – ICTare not yet widespread tools for theimprovement of health. Since theMinistry does not have its own website, it cannot provide onlineinformation or applications.

The health network covers all of thecountry’s 17 districts and consists ofhospitals and clinics. Some of theclinics are small with limited facilitiesand staff. Although not all clinics haveInternet access, every island has atleast one hospital or clinic connectedto the Internet, typically through dial-

35


up access. The country’s two biggestand most modern hospitals are inMindelo (on the island of SaoVincente) and in the capital, Praia (onthe island of Sao Tiago). Both haveInternet access. There are plans tocomputerize the hospitals’ andeventually the clinics’ medical recordsand set up a database with the medicalhistory of every patient.

There are three different types ofhealth insurance, covering peopledepending on whether they work fora public enterprise, the government,or private institutions. Claimsprocessing is all computerized.

Cape Verde does not have its ownmedical school. The governmentprovides scholarships for students tostudy overseas. Cuba has been apopular destination for medical studiesdue to low tuition. Currently some40 Cape Verdean medical students arebeing trained in Cuba and the numberis projected to rise to 120 over nextthree years. Nurses do not need togo abroad for training since there aretwo nursing schools in Cape Verde.

A telemedicine project is under wayto connect the hospital in Mindelo toHospital Pulido Valente in Lisbon.Further financing has been providedto extend the project to hospitals inPraia and Sal. The telemedicineproject, which should be launched bythe end of 2002, will allow Cape

Verdean doctors to exchangeinformation with experts in Portugal.Eventually it may link all of the CapeVerdean islands and provide a newlevel of health care. The greatestproblem the project faces is the lackof technical skills. Cape Verdeandoctors often do not have the technicalknow how that is necessary to usetelemedicine, including the use of theInternet.In a country such as Cape Verde,where people are spread acrossdifferent islands and the necessaryhealth care cannot always be providedlocally, telemedicine offers greatpossibilities. According to one officialfrom the Ministry of Education,telemedicine is a good way to “get ridof all that ocean between the islands.”

4.4 E-commerce

For all intents and purposes, e-commerce does not exist in CapeVerde. On the Business-2-Business(B2B) side, there are hardly anyexamples of e-commerce activity. Onthe Business-2-Consumer (B2C) side,no Cape Verdean web site has thecapability to process credit cardpayments. Consequently online salescannot take place. Hardly any CapeVerdean sites publish prices ofproducts or services, let alone provideordering instructions. Despite thisdearth of e-commerce activity, thereis considerable potential for thedevelopment of business over the

Internet.

Certification is one of the majorconcerns of banks and businessesin Cape Verde. Although thegovernment passed an electronicdocuments and signatures law(adapted from the Portuguese one)in 2000, the law has never beenapplied and it seems that hardlyanyone knew about it. The issuewas addressed recently, at an e-commerce seminar organized bythe ITU and the MIT and officialsare working on a new legalframework that will allow electronictransactions to be performed withconfidence.

A major barrier to e-commerce isthe high cost of Internet access and

Table 4.4: Cape Verde Health Facts, 2000

Source: Instituto Nacional de Estatisticas Cabo Verde andInternational Planned Parenthood Federation.

Infant mortality rate (per 1’000) 54

Crude birth rate 44

Life expectancy at birth (years) 70 Female 73 Male 66

Number of hospital beds 694

Hospital beds to population ratio 1: 626

Number of doctors 167

Doctors to population ratio 1:2’603

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the price of PCs, which are perceivedas prohibitive for most Cape Verdeancompanies, the majority of which areSmall and Medium Enterprises(SMEs).

Another problem is the relativelyrecent introduction of a private sectorin Cape Verde. The government tooksteps to liberalize the economy in theearly 1990s. The growth in the privatesector has been impressive, with thenumber of firms rising by two hundredper cent between 1990 and 1997 from2’182 to 6’591.8 However, a trulyentrepreneurial mentality andunderstanding of the role of ICTs inbusiness development is lacking. Over95 per cent of Cape Verdeancompanies are SMEs and with aturnover of less than US$ one milliona year, they lack the expertise andresources to use e-commerce. Whilethere is no data on the number ofcompanies with PCs, let alone Internetaccess, it is estimated to be low. Forexample of the thirty or so web sitesusing the CV domain, less than halfare business-oriented and of those,the majority do not have any or onlyscarce content.

The central bank, Banco de CaboVerde is on the web at <www.bcv.cv>where it provides a variety of timelyreports on the nation’s financialsituation. Most Cape Verdeans have abank account and a growing numberhave a domestically issued debit card

providing them with a taste ofelectronic transactions (see Box 4.3).There is no online banking althoughthis is in the pipeline. One bank hasset up a web site—Caixa Economica,<www.caixaeconomica.cv>—but sofar does not provide any informationon it.9 The other three banksoperating in the country do not haveweb sites. But some are foreign-owned so they could eventuallyleverage on their home country onlinebanking experience. Online bankingcould extend access to finance,reducing the need for banks toestablish branches and complementthe existing network of ATMs (whichare available on four of the tenislands). Online banking would alsohave synergy with large volume ofoverseas remittances sent back everyyear. For example, a Credit Union inBrockton, Massachusetts, whichclaims to be the most Cape Verdeancity in the US, launched a moneytransfer service for a flat fee ofUS$ 15.10

There are some examples of e-commerce-like activity. There is an on-line “yellow pages” at< w w w. p a g i n a s a m a r e l a s . c v >providing a directory of businessesoperating in the country. The companyproviding the service, Directel, is ajoint venture of Portugal Telecom,which provides similar online directoryservices in several other Africannations. One drawback with an online

Box 4.3: Cape Verde's Own Debit Card

Vinti4 (24) is Cape Verde’s answer to the debit card. It can be used topurchase goods in gas stations and shops that have the necessary Pointof Sales equipment with the amount directly debited from the user’saccount. Launched in 2000, there are some 30’000 Vinti4 cards incirculation. They can also be used at the some 20 Automatic TellerMachines (ATM) installed on four of Cape Verde’s islands to withdrawcash. The Vinti4 card makes up for the lack of conventional credit cardsin the country. Credit cards are difficult to obtain and few people havethem. The Vinti4 card is providing the populace with experience of makingelectronic transactions and should make the transition to making onlinetransactions easier. One idea is to leverage the Vinti4 card for onlinetransactions by developing a card reader that can be attached to a PC.While this might help develop local business-to-consumer orgovernment-to-consumer applications, it would not allow oversea buyersto purchase goods and services from Cape Verdean sites. Nor will itallow Cape Verdeans to make purchases from overseas sites.

Vint4 ATM at theSal international airport

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service like this is that so few CapeVerdean companies have web sites oftheir own to link to.

Another example is the customsservice that is using the UNCTADdeveloped software (ASYCUDA,Automated SYstem for CUstoms Data)to receive electronic filings fromimporters and exporters.11 There areplans to link this system to the centralbank and Ministry of Commerce.PROMEX, the nation’s investmentpromotion board, has also launched aweb site and has found that providinginformation to potential investors overthe Internet has reduced the need forparticipation at trade fairs or formaintaining overseas offices.12

The Chambers of Commerce for thenorthern and southern islands areexploring potential e-commerceprojects with other Macaronesiaislands and with some ECOWAScountries.13 One idea is to make aPortuguese version of the portal usedby the Canary Islands Chamber ofCommerce. The portal would provideinformation about West Africancountries and be useful for doingbusiness in the region. It would alsoadvertise services such as transportand translation. The Chambers ofCommerce are also providingawareness seminars in e-commerce.

Another planned initiative is to startan e-commerce pilot project in thetown of Santa Catarina on San Tiago

island. The idea is to digitizehandicrafts and display them over theweb by using the facilities of anInternet café operated by women. Thee-commerce component will beimplemented before the end of 2002.

Three attractive areas for e-commercein Cape Verde are tourism, expatriateservices and off shore softwaredevelopment. Cape Verde’s tourismpotential is immense and providinginformation over the Internet couldfacilitate promotion of the country as atourist destination. PROMEX provideslimited information over its web site andonly one hotel has its own web site sothe potential is barely tapped.14 CapeVerde’s large expatriate community—bigger than the number of people livingin the country itself—is a huge marketfor business to consumer e-commerce.Possibilities for services include moneytransfer, providing news andinformation, and offering the ability toorder and deliver gifts to friends andfamily. Cape Verde also has anincreasingly educated and youngpopulation and could turn towards thedevelopment of information technologyservices and software. A World Bankproject planned to develop teleportsusing VSAT technology but it nevermaterialized, perhaps because ofregulatory barriers. This idea should beresurfaced and regulatory barriers couldbe overcome, for example, by allowingpotential investors the right to providetheir own infrastructure in specialsoftware development parks.

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Box 4.4: How to become a development haven

The amount of development projects that Cape Verdehas been able to attract are impressive. In 1999, thecountry received no less than US$ 319 per capita in aid.This placed it in fifth position, just behind FrenchPolynesia, New Caledonia, Federated States of Micronesiaand the Netherlands Antilles.15 Considering the first fourreceive large aid remittances from more developedcountries that they are associated with (i.e., France, USand Netherlands), Cape Verde obtains the highestamount of aid of any independent country.

What is it that attracts donors and who are they? WhileCape Verde obtained independence from Portugal in1975, it had been not simply been a colony of Portugalbut an overseas province with the right to vote and berepresented in the government, since 1951. This statusexplains its strong ties with Portugal, the country that isCape Verde’s top donor (with a total of US$ 22 million in1999/2000). Another reason is the country’s largediaspora (see Box 1.1), which also creates special links,beyond Portugal, to countries across the world. A specialrelationship seems to exist between Cape Verde andLuxembourg, who was the third biggest donor (withover US$ 8 million in 1999). Cape Verde was the largestsource of Luxembourg foreign aid in 2001, at 16 percent, a significant share considering Cape Verde’s size.16

Oddly enough, the two countries have almost exactlythe same amount of inhabitants (435’000 in Cape Verdeand 430’000 in Luxembourg), which may partially explainLuxembourg’s compassion for its ‘twin’. Though thereare no precise figures on the number of Cape Verdeansresiding in Luxembourg, the anecdotal evidence suggestsit is significant. The Portuguese are the largest immigrantgroup in Luxembourg (58’400 in 2001) and the factthat there is already a large Portuguese speakingcommunity could explain part of the attraction for CapeVerdeans. In 2002, 274 Cape Verdeans applied forregularization of their situation (‘sans papiers’) inLuxembourg making them the 2nd largest group. Thedevelopment projects financed in Cape Verde areprimarily centred on the areas housing, water, electricityand education. One of the most expensive projects wasthe construction of a technical school in Santa Catarina,

on the island of Santiago (see photo). The school nowtrains some 653 students, 112 of which live in theadjacent boarding school. The school also houses ateacher-training centre. Luxembourg also financed theconstruction of the Ribeira Grande hospital on the islandof Santo Antão.

Other major donors include the World Bank (withUS$ 17 million in 2000), Germany, Japan, theNetherlands, the African Development Fund, France andthe European Union.17 While Cape Verde’s special tiesto certain countries helps to explain the large amount ofdevelopment projects, it is also something else, we mightsay something very Cape Verdean that attracts attention.First, Cape Verde is able to formulate concrete projectproposals relevant to its development needs. As opposedto many other developing countries, Cape Verdeans areinvolved in their projects, from the beginning to theend. They also tend to contribute to projects, whichmakes them more than beneficiaries, but partners. Notsurprisingly, there are stories about development projectsthat failed because they were planned and carried outwithout the inclusion of local staff.

Another typically Cape Verdean characteristic is theambition to do better. People will often say, ‘What wehave achieved is good, but it is not good enough’.This critical attitude is very beneficial because CapeVerdeans will not allow themselves to rest but insteadto come up with ways of improving what is alreadyadequate. One Cape Verdean explains, “We do nothave a lot of opportunities but when we have one,we use it.”

It is not surprising that development agencies like toinvest in Cape Verde, where their assistance showsconcrete results. The irony is that the success Cape Verdehas had, may now work against it. Since Cape Verdehas been a development star with rising per capitaincome, some donors might decide that their support isno longer necessary. While Cape Verde received a totalof US$ 137 million in 1999, this amount dropped toUS$ 94 million in 2000.

Luxembourg’s most expensive development project in Cape Verde: The Santa Catarina (Santiago) technicalschool (right), which is equipped with a state-of-the-art-computer room (left)

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1 See World Bank. Project Appraisal Document on a Proposed Credit in the Amount of SDR 2.3 Million(US$ 3.0 Million Equivalent) to the Republic of Cape Verde for a Second Public Sector Reform and CapacityBuilding Project.” 26 October 1999. Report No: 19824-CV. Available online at: http://www-wds.worldbank.org/servlet/WDSServlet?pcont=details&eid=000094946_99110505400927.

2 http://www.uneca.org/itca/initiatives.htm.

3 Plan National de Développement d’Infrastructures des TICs.

4 “World Bank Approves US$ 22.1 Million in Financing for the Republic of Cape Verde.” News Release. 25 May1999. www.worldbank.org/html/extdr/extme/2206.htm.

5 According the Cape Verde embassy in the US “As part of this effort, the Embassy will be working with thegovernment to facilitate long-distance learning. The traditional university environment is costly and,especially for a small country like Cape Verde. Yet, education and technical training are the key to thefuture. Therefore, an important focus for the country is to find new ways and methods to provide qualityeducation and technical training without incurring the cost of establishing a new traditional university.Distance learning is therefore a key priority for Cape Verde and the Embassy will actively seek to establishlinkages with American schools and institutions that can assist in this endeavor.” See “Strategic Agenda ofthe Embassy of Cape Verde to the United States of America-Overcoming Cape Verde’s DevelopmentChallenge” accessed on 6 June 2002 on the embassy web site at:http://www.capeverdeusaembassy.org/strategic_agenda_of_the_embassy_.htm.

6 For more information on the ITU’s Internet Training Centers Initiative for Developing Countries (ITCI), pleasesee: www.itu.int/itudoc/itu-d/hrdqpub/hrdq/hrdq84/itci-dc_ww7.doc.

7 “Lusophone countries participating in the AVU project are Cape Verde and Mozambique.” See Jant Nima. “ThePromises of Distance Education.” Legacy. http://ngilegacy.com/educationspring99.htm. The African VirtualUniversity (AVU) web site is here: http://www.avu.org/.

8 Data are from the INE web site at: http://www.ine.cv/estatisticas_cv_empresas.htm#empresa1.

9 Caixa’s web site was developed by Brava Telecom, a US-based company operated by Cape Verdeanexpatriates. They also developed the web sites of VisaoOnline and CaboVerdeOnline, two popular portals.See http://www.bravatelecom.com/internet/internet_portfolio.asp. This highlights the dearth of web skills inCape Verde and the danger that poses by driving business overseas.

10 Jorge Soares. “Brockton Credit Union inaugura sistema de transferência de dinheiros para Cabo Verde.”Available on the VisaoOnline web site athttp://www.visao-online.com/s/economia/2001/negocios/ANG_05_DEC05.asp.

11 See www.asycuda.org.

12 http://www.promex.org.

13 Macaronesia includes Canary Islands, Azores, Madeira and Cape Verde. ECOWAS refers to EconomicCommunity of West African States. http://www.ecowas.int/.

14 The only hotel with a web site using the .CV country domain is at http://www.pousadadaluz.cv. Note thatthere may be other hotels with web sites using other domain names.

15 The source of the data is the World Bank. World Development Indicators. “Aid Per Capita.”

16 http://www.lux-development.lu/f/prscindex.htm.

17 http://www1.oecd.org/dac/images/AidRecipient/cpv.gif.

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5. Conclusions

5.1 State of the Internet

The Mosaic Group <www.agsd.com/gdi97/gdi97.html> has developed aframework for characterizing the stateof the Internet in a nation (Annex 3).They consider six dimensions, each ofwhich has five values ranging fromzero (non-existent) to four (highlydeveloped). The dimensions are asfollow:

• pervasiveness: a measurebased on users per capita and thedegree to which non-techniciansare using the Internet.

• geographic dispersion: ameasure of the concentration ofthe Internet within a nation, fromnone or a single city tonationwide availability.

• sector absorption: a measureof the degree of utilization of theInternet in the education,commercial, health care andpublic sectors.

Figure 5.1: State of Internet in Cape Verde

Dimension Value

Pervasiveness 3

Geographic Dispersion 3

Sectoral Absorption 2

Connectivity Infrastructure 2

Organizational Infrastructure 1

Sophistication of Use 2

TOTAL 13

Note: The higher the value, the better. 0 = lowest, 4 = highest.Source: ITU.

• connectivity infrastructure: ameasure based on internationaland intranational backbonebandwidth, exchange points, andlast-mile access methods.

• organizational infrastructure:a measure based on the state ofthe Internet Service Provider(ISP) industry and marketconditions.

• sophistication of use: ameasure characterizing usagefrom conventional to highlysophisticated and drivinginnovation.

Cape Verde values for thesedimensions are shown below.

Pervasiveness is rated at level 3,Common. At December 2001, therewere an estimated 12’000 Internetusers in the country or 2.8 per centof the population.1

0

1

2

3

4Pervasiveness

Dispersion

Absorption

Connectivity

Organizational

Sophistication

41

5. Conclusions

Geographic Dispersion is rated atlevel 3, Highly dispersed. Internetaccess is available from any locationwith a telephone line and PC with amodem and charged at local call rates.However, rural telephone lines arelacking. In addition, Internet cafés arenot widespread.

Sector Absorption is rated at level 2Moderate. This ranking is a function ofthe type of connectivity in education,government, health care and business.All institutes of higher learning haveInternet access. One third of secondaryschools are connected to the Internet(9 out of 27). A few primary schoolsare connected. By the end of 2000, allministries were connected through thegovernment Intranet. Connectivity atthe local administrative level is less. Fewbusinesses are connected to theInternet let alone have web sites. Thereis limited connectivity in the healthsector.

The Connectivity Infrastructure is atlevel 2, Expanded. Internationalconnectivity is three Mbps via fibre opticsubmarine cable. There is a nationwidefibre/microwave/satellite backbone—built for the telephone network—thatoperates at various speeds and overwhich data traffic can flow. However

there is no dedicated national Internetbackbone. There is no Internetexchange since there is only one ISP.High-speed local access options arelimited to ISDN and leased lines sincebroadband access via DSL or cablemodem is not available.

The Organizational Infrastructure isat level 1, Single. One ISP has a legalmonopoly for internationalcommunications. The monopoly wasgranted for a 25-year period, until 2025.

Sophistication of Use is at level 2,Conventional. The most popularapplications are e-mail and informationretrieval. There are a number ofgovernment databases and plans todevelop online governmentapplications.

An examination of Cape Verde’s Internetdimensions shows that it is relativelystrong in terms of infrastructure andpotential accessibility but weak inmarket structure and the sophisticationof Internet use (see Figure 5.1). ItsInternet market is judged to be themost constrained when compared toother nations to which this frameworkhas been applied (see Table 5.1). Thisindicates that efforts should befocused in the latter areas. Injecting

Table 5.1: Framework comparisons

Country comparisons using Mosaic framework

Perva- Disper- Absorp- Organi- Connec- Sophis- Totalsiveness sion tion zational tivity tication

Singapore 4 4 4 3.5 3 3.5 22

Malaysia 4 3.5 2.5 3.5 2.5 2.5 18.5

Indonesia 3 3 1.5 3.5 2.5 2 15.5

Thailand 3 3.5 2.5 2 2.5 2 15.5

Philippines 3 2.5 2 3 2.5 2 15

Cape Verde 3 3 2 1 2 2 13

Vietnam 2 2 1.5 2 1.5 1.5 10.5

Laos 2 1.5 1 2 1.5 1 9

Cambodia 1 1.5 1 1.5 1.5 1 7.5

Source: ITU.

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liberalization into the market wouldattract more players, additionalapplications and ways of using theInternet in order to capture newcustomers, and would likely have anpositive impact on the number ofInternet users.

5.2 Recommendations

Cape Verde has made enviable gainsin its telecommunication market sinceindependence from Portugal. It hasrisen to the top of the LeastDeveloped Countries (LDCs) in termsof network infrastructure. However,Cape Verde now needs to consolidatethe gains from infrastructuredevelopment and move to a higherlevel. This includes building value-added services on top of theinfrastructure. One necessity isopening up the ISP market—in linewith government aims to liberalizethe economy—and developingcontent services such as web designand hosting, portal development ande-businesses. It also involvesdeveloping more content for thepublic such as e-citizen services.

A move in this direction will constitutethe first step towards an informationsociety and eventual knowledge-based society.6 It is essential that theCape Verdean government instigatethis process as soon as possible. Withscarce natural resources, CapeVerde’s main asset is its people. Thisis an essential resource since ICT isessentially a brain-oriented activity.ICT offer considerable potential forCape Verde’s economic and socialdevelopment, poverty alleviation andintegration into the global economy.This can assist Cape Verde to makethe transition from an LDC to a higherlevel of economic prosperity. First,ICT offer considerable potential foradding to domestic economic growththrough the creation of new e-services. Second, ICT can assist ineconomic development by enhancingthe dissemination of information.Third, ICT can assist Cape Verde toovercome its geographic discontinuitythrough services such as distanceeducation and telemedicine. Fourth,ICT can add to export driven growththrough services such as off-shore

software development, selling of CapeVerde goods and services and byattracting foreign investment.

Cape Verde’s strengths andweaknesses are identified in Table 5.2.The table summarizes Cape Verde’sconsiderable strengths andopportunities in the ICT area. Thoughthe nation has certain weaknesses,through proper attention, these canbe overcome. Finally, the conse-quences of not quickly embracing ICTare listed.

The recommendations below outlinethe steps the government needs totake to accelerate the development ofthe Cape Verdean Information Society.

5.2.1 Change CVT concession

Cabo Verde Telecom (CVT) hasperformed well and provided thecountry with an up-to-datetelecommunication infrastructure.Nonetheless, there are the inevitableconsequences of a monopolysituation, including higher prices,shortage of ancil lary firms anddeficiencies in innovation. The reporthas described a number of sectorssuch as mobile and Internet access,where Cape Verde’s prices are abovecomparator countries. CVT’stelecommunication revenues as ashare of GDP are also well aboveinternational standards suggestingabove average pricing. High pricesdiscourage access and also lead toconvoluted solutions to avoid them.For example, the government Intranetis developing alternative connectivitysolutions to avoid the high costs ofleasing capacity from CVT. Thecompany’s de facto monopoly over theInternet market and high leasing costshave discouraged new ISPs as well asancillary companies such as webhosting, web page designers, etc.from entering the market. This in turnhas contributed to a shortage ofinnovation, critical if Cape Verde is totransition to an information societyand successfully harness ICTs for itsdevelopment needs.

There are certainly few logicalarguments for maintaining CVT’smonopoly that is not due for expiration

43

Table 5.2: Cape Verde’s ICT SWOTs

Strengths, weaknesses, opportunities and threats in Information and Communication Technology

Source: ITU.

STRENGTHS

EDUCATION: The nation’s relatively high literacy rate,growing level of school enrolment and rising number ofpost-secondary graduates are essential prerequisites forsuccessfully exploiting ICTs.EXPATRIATE / LUSOPHONE COMMUNITY/STUDENTS STUDYING

ABROAD: The large number of people overseas with tiesto Cape Verde are a rich source of resources inknowledge and investment. Membership of the widerPortuguese-speaking community offers linguistic andassistance synergies. Both of these groups also giveCape Verde an outward-looking perspective. The greatnumber of Cape Verdeans studying abroad furtherstrengthens ties with foreign countries and provides thecountry with an open-minded and educated youth andwork force that often speaks English, French and otherlanguages.GOOD GOVERNANCE: The nation has been lauded for itsstability, transparency and tough anti-corruptionmeasures.SMALL SIZE/REGIONALISM: The nation’s small size makes iteasy to govern and creates a sense of identity. Itsgeographic features have forced it to deal with matterson a regional/local basis, which has facilitatedimplementation processes and leads to efficiency.INFRASTRUCTURE: Cape Verde’s ICT infrastructure is topquality and fairly well dispersed.LOCATION/TOURISM: The archipelago is strategicallyplaced at the crossroads between southern Europe, westAfrica and South America. It is also a popular touristdestination.

OPPORTUNITIES

SOFTWARE DEVELOPMENT: Cape Verde’s increasinglyeducated population is well suited for data entry,software development and, with time, higher valued-added computer applications for export. The largeexpatriate community and other lusophone countries arepotential markets.B2C E-COMMERCE: There are major opportunities herewaiting to be exploited. The large Cape Verdeanexpatriate community is a potential captive market forall things typically Cape Verdean that can be sold overthe Internet. This includes everything from news tomedia streaming to services aimed at friends and family(e.g., delivering flowers, money transfers, etc.). Anotheropportunity is for Cape Verdean products that could beadvertised and sold over the web such as music andtourism information.FOREIGN INVESTMENT: Cape Verde’s location, stability andstatus as an LDC and African nation provide advantagesto potential investors. The former makes it a good basefor exports to Europe, Latin America or West Africa,while the latter includes incentives such as duty freeimport preferences. The availability of good quality andcompetitively priced telecommunication services wouldgo far to attract potential investors. One developingkinship is with the Macaronesia islands of the Azores,Canaries and Madeira. These more economicallydeveloped locations are keen to invest in Cape Verde,provided the right incentives are there.

WEAKNESSES

LDC: Despite Cape Verde’s success it is still an LDC andfaced with particular hardshipsGEOGRAPHICAL DISCONTINUITY: The fact that Cape Verde isspread across ten different islands raises connectivitycosts and means that most infrastructure must beduplicated.HIGH ICT COSTS: Relatively high telecommunication andInternet prices discourage market development andinvestment in other sectors of the economy.LACK OF INTERNET CULTURE: The Internet was introducedrelatively late and there is not a large supporting value-added market in web hosting, content creation, etc.There are few Internet cafés and not a high level ofawareness among the public.SMALL SIZE: Small population limits market size and maydiscourage investors.Entrepreneurship: Cape Verde is in transition from astate-run economy to a free market economy andprivate sector involvement and initiative is still limited.ENGLISH: English is not widely spoken, which can be aweakness considering that much ICT software, contentand manuals are in English.

THREATS

GLOBALIZATION: The increasingly integrated worldeconomy gives less control to national authorities andplaces a premium of country’s competitiveness and e-readiness. There is growing competition to attractinvestment.TECHNOLOGICAL BYPASS: Refile and VoIP are just twoexamples of using technology to get around highcommunication costs. These types of bypass cannot beeffectively prevented and threaten to impact investmentin the ICT sector.COMPLACENCY: Cape Verde’s impressive network growthmay lead it to rest on its laurels.TIME: The Internet world moves fast. Delays indeveloping its ICT sector will make it more difficult forCape Verde to catch up.COMPETITORS: The world is becoming an increasinglycompetitive place. Nations compete for resources andinvestment. Cape Verde risks becoming less competitivedue to ICT constraints.BRAIN DRAIN: A lack of ICT opportunities at home willdrive educated workers overseas. This is a particularlyserious threat for Cape Verde that already has atradition of emigration, making it easier for potentialleavers to hook up with overseas friends and family.SOCIAL STABILITY: A lack of ICT opportunities as well asthe natural attraction to the social aspects of ICT (e.g.,e-mail, chat, gaming) may increase disillusionment foryouth if they do not have ICT access.

5. Conclusions

44


until 2025. Concerns about marketsize are not valid as there arecountries with smaller populationsthan Cape Verde’s that havecompetitive telecommunicationsectors. Equally, concerns aboutduplicate infrastructure can be laid torest assuming appropriateinterconnection and resale policies arein place. Assuming there is excesscapacity, it would hardly be in theeconomic interest of CVT to not leaseit to competitors.

Furthermore, CVT may actually bewilling to give up its monopoly. Thereis considerable evidence that formertelecommunication monopoliesactually increased revenues followingthe introduction of competition as aresult of larger market size, increased

visibility of ICT from advertising andinterconnection revenues. CVT mayalso want to avoid being the solesource of criticism for problems in theICT sector. CVT may also benefit byno longer being solely responsible foruniversal access. Legally, there isalready the precedent of Cape Verdeending CPRM’s monopoly ofinternational services earlier thanexpected. There are also othercountries where the introduction ofcompetition has been advanced.7

The most efficient preference is forCVT to willingly cede its monopoly. Inthe meantime or if that is not possiblein the short run, there are other policytools available for introducingcompetitive proxies. One option is toopen up the resale market. Indeed

Box 5.1: ICT serving development

ICTs can help Cape Verde’s development process.Three examples show how ICTs can be applied tothe nation’s specific social, geographic and economicsituation:

Distance learning: Cape Verde has investedheavily in education and the results are bearingfruit. There is near universal primary education.Secondary school enrolment is rising, a remarkableachievement considering there were only threesecondary schools a decade ago. However, in thearea of higher education, the nation suffers from alack of institutions and shortage of qualifiedteachers. There are just five institutes of highereducation and one recently established university.This is not enough to meet demand, andconsequently many students go abroad for highereducation. ICTs could help alleviate the shortageof higher education options through distancelearning. This could also overcome the geographicdiscontinuity of the nation by making cybereducation widely available from across thearchipelago. Although there have been someinitiatives to develop distance education in CapeVerde, none have borne fruit. The failure of theseinitiatives have not been analysed so it is not clearwhat the problems were. The successful experiencesof other countries in this area suggest that if appliedappropriately, distance learning could be ofimmense benefit for Cape Verde.2

Fishing: Fishing is an important source of livelihoodin Cape Verde, yet its full potential has not beenachieved.3 Much fishing is carried out on a small-scale basis and techniques could be improved

through access to information. One way is throughwider dissemination of information about efficient,appropriate and self-sufficient fishing techniques.The Food and Agricultural Organization (FAO) hasa project in Cape Verde to improve fish catches, byusing low-cost, technologically appropriate fish-aggregating devices. The devices attract mackerel,tuna and other fish in the Cape Verdean watersand the catch has doubled at locations equippedwith the device. Information about building thedevice is on the web and if more fishers had accessto the Internet, it could help improve theirlivelihood.4

Connecting to the Diaspora: One of theconsequences of Cape Verde’s large-scaleemigration was strained communication betweenthose who left and those who stayed behind.Without the contact, the two communities grewapart but now with ICT, there are increasing signsof rapprochement. Intensification of efforts to linkthose within Cape Verde to those outside thecountry could have a significant impact on thecountry’s development. For example, expandingInternet access to more Cape Verdeans would allowthem to correspond more frequently and cheaplywith friends and family abroad through email. Atthe same time, there is a considerable amount ofInternet use, web site development and contentby overseas Cape Verdeans. Their expertise needsto be drawn on to assist the country in its ICTdevelopment.5 Also, students studying abroad wantto keep in touch with their family back home. ICTsmake ‘keeping in touch’ easy, for relatively littlemoney.

45

there is nothing in the concessionagreement that suggests CVT shouldnot be obligated to provide wholesalepricing for resellers. Another optionwould be to impose far more universalaccess obligations on CVT. This mightinclude requirements to provide freeInternet access to all schools,providing public Internet access in alllocalities and similar obligations toenhance public access to ICTs. If themonopoly cannot be ended in theshort-run, then CVT pricing should bebenchmarked against internationalstandards and it should be obligatedto remain competitive. Thegovernment should also make aneffort to clarify the situation in the ISPmarket. If CVT does not legally havea monopoly in the ISP market, thisshould be made clear and othercompanies should be encouraged toenter the market.

5.2.2 Government promotion,support and policy for ICT

By default, RAFE has been in chargeof developing governmentnetworking. It has made admirableadvances in connecting governmentagencies and developing internalapplications. But as RAFE points out,Cape Verde does not yet have e-government. For that, the governmentwill have to develop a vision, policyand strategic plans for e-government.This includes developing citizenapplications that can drive greaterawareness and necessity for using theInternet.

5.2.3 e-culture

Signs of the Internet in Cape Verdeare scarce. There are few Internetaccess outlets and rare outsideadvertising of Internet products andservices. The benefits of the Internetneed to be more widely disseminated.There is a significant gap betweenCape Verde’s actual and potentialInternet users, part of which can beexplained by a lack of awareness. Atone level, this would include thegovernment giving greater visibility tothe Internet for national development.Steps to be taken—some of which arealready in the pipeline but which needto be accelerated—include the

adoption of a national ICT strategy,the creation of digital laws and thecreation of a unified ICT ministry andregulator. Cape Verde’s growingprivate sector also needs to take moreinitiative in lobbying for ICT, forexample by emphasizing theimportance of passing e-commercelaws and developing e-commercesolutions. The private sector alsoneeds to incorporate ICT more deeplyin their business and the governmentneeds to give them incentives to doso. Steps should also be taken tobenefit from the ICT skills of CapeVerde’s large diaspora.

5.2.4 Enhancing access toinformation on theInternet

There is much that needs to be doneto expand public access to theInternet. A start has been made inconnecting all institutes of higherlearning and around a third of thesecondary schools. This needs to beexpanded and the existing level ofaccess improved. In addition policiesneed to be designed for public accessto the Internet. Regulatory and otherbarriers to the establishment ofInternet cafés need to be lifted andthe provision of wholesale Internetaccess should be encouraged. Thecountry also needs to move ahead inbroadband connectivity including thelaunching of Digital Subscriber Line(DSL) technology.

5.2.5 Coordination ofdevelopment projectswith ICT component

Many exciting ICT developments inCape Verde have come aboutthrough international assistance. Forexample the RAFE project creatinga government network is fundedthrough the World Bank. Howeverthere is a lack of knowledge aboutall such projects. One problem is thatthe projects may have a wider intentwith the ICT component not widelyknown (such as the RAFE). Thereneeds to be better coordination ofal l projects that have an ICTcomponent in order to avoidduplication, achieve synergies andshare the results.

5. Conclusions

46


5.2.6 Tariff conundrum

Cape Verde faces a difficult situationwith respect to its fixed telephonetariff structure. Fixed tariffs haveessentially remained the same for thelast decade. International tariffs arehigh and need to be lowered if CapeVerde is to be competitive in attractingforeign investment. Furthermore, highinternational call prices are ultimatelyunsustainable and encourage bypassthrough refile and IP telephony. CVTneeds to rebalance its tariffs. However,higher local telephone tariffs wouldimpact universal service by makingtelephone ownership more expensiveand reverse Cape Verde’s impressivestrides made in increasing homeownership of telephones. It would alsonegatively impact dial-up Internetpricing, already high by internationalcomparisons. One solution might beto lower or even eliminate the fixedtelephone connection charge—cited as

being a barrier to telephonesubscribership—while raising localtariffs. At the same time, Internet dial-up pricing could be charged separatelythan voice telephone calls at either theexisting or lower rate. The mostInternet friendly policy would be tocompletely eliminate the local callcharge for Internet access.Alternatively, the local call chargecould be maintained but Internetaccess prices eliminated as inPortugal. In any case, the tariffrebalancing exercise should becarefully thought out because of itspotential detrimental impact ontelephone subscribership and Internetaccess. Cape Verde should seek advicefrom other countries that have beenfacing similar problems. This wouldhelp the government and the privatesector to evaluate the possibleconsequences of different policies andguidelines.

47

5. Conclusions

1 Formal surveys regarding the number of users do not exist. The number of subscribers was 2’974 atDecember 2001. The figure of 12’000 is based on multiplying the number of subscribers by 4, a commonratio in developing countries where access is often via shared accounts and public locations. The nationalstatistical agency is carrying out a household survey that includes a question on whether the home hasInternet access. Results should be available in January 2003.

2 One approach would be for Cape Verde to collaborate with other partners. The CAERENAD distance educationnetwork links universities in six different nations including Brazil. As a result, course material is available inPortuguese. The University of the Indian Ocean links five nations off the east coast of Africa in a networkthat offers graduate programs via distance education. A similar project for Portuguese-speaking Macaronesiaislands including Cape Verde is supposedly also under discussion. See William Saint. Tertiary DistanceEducation and Technology in Sub-Saharan Africa. The World Bank, Washington, D.C. September 1999.http://www.adeanet.org/publications/wghe/tert_disted_en.pdf.

3 Fish makes up between 70-90 per cent of the animal protein in the Cape Verdean diet. Fishing contributesaround 5 per cent of GNP and employs some 7’000 fishermen and 3’200 traders. It is estimated that onlyabout a quarter of the potential is exploited. See José Manuel Lima Ramos. “Chemical and Physical Propertiesof Synthetic Fibres most Commonly Used in Fishing Gear, with Reference to their Use in Cape VerdeFisheries.” Available at www.unuftp.is/images/Ramos99-lei%F0r1FF.pdf.

4 FAO. “Small cost yields big catch for fishers in Cape Verde.” 18 January 2001.www.fao.org/News/2001/010102.htm.

5 A UN agency project to connect the African Diaspora with local citizens, particularly for the development ofwomen ICT skills, may be relevant here. See http://www.unifem.undp.org/press/pr_afr_digital.html.

6 “The Information Society is a society where the ability to access, search, use, create and exchangeinformation is the key for individual and collective well-being.” See “Creating a Knowledge Society in NewZealand” on the Ministry of Research, Science and Technology web site atwww.newuses.net/docs/Kaplan_IS%20definition.doc . Knowledge-based society “describes a society wherecreating, sharing and using knowledge are key factors in the prosperity and well-being of people.” Seehttp://www.morst.govt.nz/guide/knowledge.html.

7 See ITU Internet Case Study on Singapore, at www.itu.int/ict/cs.

48


Annex 1: List of meetings

No. DATE TIME Appointment with

1 16/04/02 14:00 Ministerio de Infrastructura e Transportes (MIT): Ministry for Infrastructure and Transportation

2 16/04/02 15:30 Direccao Geral das Comunicaçöes. The regulatory agency.

3 16/04/02 17:30 Société Internationale de Télécommunications Aéronautiques (SITA)

4 17/04/02 09:00 Cabo Verde Telecom (CVT)

5 17/04/02 14:00 Instituto Nacional de Estatístic (INS). National Institute of Statistics

6 17/04/02 15:00 Reforma da Administração Financeira do Estado (RAFE). Public Finance Management Reform Group.

7 17/04/02 17:00 Chamber of Commerce representing Sotavento, Customs. D.G. de Commerce, D.G. des Douanes.

8 18/04/02 09:00 Ministry of Health

9 18/04/02 10:00 Ministry of Education and PROMEF (Projecto de Consolidação e Modernização da Educação e Formação): the Education and Training Consolidation and Modernization Project

10 18/04/02 14:30 Private Sector Representatives: NT2000, INFOTEL, SOPROINF, MULTIDATA, CABONET, ENITEL, BOUTIQUE INFORMATICA. CECV, BCA, BANCO TOTA E AÇORES, B. INTERATLANTICO, BCV, SISP

11 18/04/02 16: 00 Mass Media Representatives: RTC, RTPA, EXPRESSO DAS ILHAS, JORNAL HORIZONTE, JORNAL A SEMANA, INFOPRESS, RÁDIOS PRIVADAS

12 19/04/02 09:30 RAFE

13 19/04/02 11:30 PROMEX. The investment promotion board.

14 19/04/02 14:00 Visit to the Santa Catarina Technical School and Cybercafé

15 22/04/02 11:00 Instituto Superior de Engenharia e Ciências do Mar (ISECMAR). Technical institute of higher learning.

16 22/04/01 15:00 Chamber of Commerce representing Barlavento.

49

Annexes

Annex 2: Acronyms and abbreviations

ADB African Development Bank

ATM Automatic Teller Machines

B2B Business-2-Business

B2C Business-2-Consumer

CCNA Cisco Certified Network Associate exam

CNAP Cisco Networking Academy Program

CPLP Comunidade dos Países de Língua Portuguesa

CPRM Companhia Portuguesa Radio Marconi

CTT Serviços dos Correios e Telecomunicaçöes

CTT-EP Empresa Publica dos Correios e Telecomunicacöes SARL

CVT Cabo Verde Telecom. The national telecommunication operator.

DNS Domain Name Server

DSL Digital Subscriber Line

ECV Cape Verde Escudo. The national currency. A value of ECV 120 per one US dollar hasbeen used for calculations in this report.

FAO Food and Agricultural Organization

GDP Gross Domestic Product

GNI Gross National Income

GPRS General Packet Radio Services

GSM Global System for Mobile communication

HDI Human Development Index

ICT Information and Communication Technologies

INE Instituto Nacional de Estatística. National Institute of Statistics.

ISDN Integrated Services Digital Network

ISECMAR Instituto Superior de Engenharia e Ciências do Mar.

ISP Internet Service Provider

ITCI ITU’s Internet Training Centers Initiative for Developing Countries

ITU International Telecommunication Union

kbps Kilo bites per second

LAN Local Area Network

LDC Least Developed Country

Mbps Mega bites per second.

50


MESYS Ministry of Education, Science, Youth and Sports

MID Marconi’s Internet Direct

MIT Ministerio de Infrastructura e Transportes. Minister for Infrastructure and Transportation

MMDS Multichannel Multipoint Distribution Service

OPEC Organisation of Petroleum Exporting Countries

PAICV Partido Africano para a Independência de Cabo Verde

PIP Public Investment Program

PROMEF Projecto de Consolidação e Modernização da Educação e Formação: The Education andTraining Consolidation and Modernization Project

PT Portugal Telecom

RAFE Reforma da Administração Financeira do Estado

RDP Radiodifusão Portuguesa S.A.

RFI Radio France Internationale

RIPE Réseaux IP Européens

RTC Radiotelevisão de Cabo Verde

RTP Radiotelevisão Portuguesa

SME Small and Medium Enterprises

UUCP UNIX-to-UNIX Copy. Refers to a UNIX protocol that makes it possible to copy a file fromone UNIX computer to another via a telephone line or direct connection

WAP Wireless Application Protocol

51

Annexes

Annex 3: Framework dimensions

Table 1: Pervasiveness of the Internet

Level 0 Non-existent: The Internet does not exist in a viable form in this country. No computers with international IP connections are located within the country. There may be some Internet users in the country; however, they obtain a connection via an international telephone call to a foreign ISP.

Level 1 Embryonic: The ratio of users per capita is on the order of magnitude of less than one in a thousand (less than 0.1%).

Level 2 Established: The ratio of Internet users per capita is on the order of magnitude of at least one in a thousand (0.1% or greater).

Level 3 Common: The ratio of Internet users per capita is on the order of magnitude of at least one in a hundred (1% or greater).

Level 4 Pervasive: The Internet is pervasive. The ratio of Internet users per capita is on the order of magnitude of at least one in 10 (10% or greater).

Table 2: Geographic Dispersion of the Internet

Level 0 Non-existent. The Internet does not exist in a viable form in this country. No computers with international IP connections are located within the country. A country may be using UUCP connections for email and USEnet.

Level 1 Single location: Internet points-of-presence are confined to one major population centre.

Level 2 Moderately dispersed: Internet points-of-presence are located in at least half of the first-tier political subdivisions of the country.

Level 3 Highly dispersed: Internet points-of-presence are located in at least three-quarters of the first-tier political subdivisions of the country.

Level 4 Nationwide: Internet points-of-presence are located in all first-tier political sub-divisions of the country. Rural dial-up access is publicly and commonly available and leased line connectivity is available.

Table 3a: Sectoral Use of the Internet

Sector Rare Moderate Common

Academic - primary and secondary schools, universities

>0-10% have leased-line Internet connectivity

10-90% have leased-line Internet connectivity

>90% have leased-line Internet connectivity

Commercial-businesses with > 100 employees

>0-10% have Internet servers

10-90% have Internet servers

>90% have Internet servers

Health-hospitals and clinics

>0-10% have leased-line Internet connectivity

10-90% have leased-line Internet connectivity

>90% have leased-line Internet connectivity

Public-top and second tier government entities

>0-10% have Internet servers

10-90% have Internet servers

>90% have Internet servers

52


Table 3b: The Sectoral Absorption of the Internet

Sectoral point total Absorption dimension rating

0 Level 0 Non-existent

1-4 Level 1 Rare

5-7 Level 2 Moderate

8-9 Level 3 Common

10-12 Level 4 Widely used

Table 4: Connectivity Infrastructure of the Internet

Domestic backbone

International Links

Internet Exchanges

Access Methods

Level 0 Non-existent

None None None None

Level 1 Thin ≤ 2 Mbps ? 128 Kbps None Modem

Level 2 Expanded >2

– 200 Mbps

>128 kbps

-- 45 Mbps

1 Modem

64 Kbps leased lines

Level 3 Broad >200 Mbps

-- 100 Gbps

>45 Mbps

-- 10 Gbps

More than 1;

Bilateral or Open

Modem

> 64 Kbps leased lines

Level 4 Immense > 100 Gbps > 10 Gbps Many; Both

Bilateral and Open

< 90% modem

> 64 Kbps leased lines

Table 5: The Organizational Infrastructure of the Internet

Level 0 None: The Internet is not present in this country.

Level 1 Single: A single ISP has a monopoly in the Internet service provision market. This ISP is generally owned or significantly controlled by the government.

Level 2 Controlled: There are only a few ISPs because the market is closely controlled through high barriers to entry. All ISPs connect to the international Internet through a monopoly telecommunications service provider. The provision of domestic infrastructure is also a monopoly.

Level 3 Competitive: The Internet market is competitive and there are many ISPs due to low barriers to market entry. The provision of international links is a monopoly, but the provision of domestic infrastructure is open to competition, or vice versa.

Level 4 Robust: There is a rich service provision infrastructure. There are many ISPs and low barriers to market entry. International links and domestic infrastructure are open to competition. There are collaborative organizations and arrangements such as public exchanges, industry associations, and emergency response teams.

53

Annexes

Table 6: The Sophistication of Use of the Internet

Level 0 None: The Internet is not used, except by a very small fraction of the population that logs into foreign services.

Level 1 Minimal: The small user community struggles to employ the Internet in conventional, mainstream applications.

Level 2 Conventional: The user community changes established practices somewhat in response to or in order to accommodate the technology, but few established processes are changed dramatically. The Internet is used as a substitute or straight-forward enhancement for an existing process (e.g. e-mail vs. post). This is the first level at which we can say that the Internet has "taken hold" in a country.

Level 3 Transforming: The user community's use of the Internet results in new applications, or significant changes in existing processes and practices, although these innovations may not necessarily stretch the boundaries of the technology's capabilities. One strong indicator of business process re-engineeering to take advantage of the Internet, is that a significant number (over 5%) of Web sites, both government and business, are interactive.

Level 4 Innovating: The user community is discriminating and highly demanding. The user community is regularly applying, or seeking to apply the Internet in innovative ways that push the capabilities of the technology. The user community plays a significant role in driving the state-of-the-art and has a mutually beneficial and synergistic relationship with developers.

the internet in a lusophone ldc: cape verde case study

Documents

iithis report

cape verde case studynovember

republic of cape verde

telecom mass media

lusophone ldc

developedcountry ldc

nations classification

developing nations