afrol News / Balancing Act, 27 September - Cape Verde is about to allow a second national telecom operator to offer mobile, internet and cable TV services. The Chinese company Shanghai Telecom is set to become the new competitor of Cabo Verde Telecom (CVT) by this December. As the telecom monopoly is set to fall in Cape Verde, customers can expect lower fares.

Africa's small Portuguese-speaking countries seem to be stealing a march on their larger neighbours. First Guinea-Bissau opened itself up to Voice over Internet Protocol (VoIP; using the internet to make cheap telephone calls), now Cape Verde is about to allow a second national operator to offer mobile, internet and cable TV. The long years of Portugal Telecom's monopoly are coming to an end in the region.

The argument always advanced is that Africa's smaller countries cannot afford competition as their national markets are too small. At around half a million inhabitants, you don't get markets much smaller than Cape Verde but the islanders look set to have new competitor - Shanghai Telecom - by this December.

The Cape Verdean government recently called for bids for a second operator as part of the legal changes in the telecom market from 2001. Many of the larger international operators came and said Cape Verde was too small a market, but currently there are two bidders - the Chinese Shanghai Telecom and the other an American company working with local investors. The former looks likely to be successful.

Portugal Telecom (PT) has a licence from the Praia government to run Cape Verde Telecom (CVT), offering fixed lines, internet and mobile. Portugal Telecom is poorly regarded locally and as one customer said: "Portugal Telecom is amongst those with the highest prices in Europe." The licence given to PT by the government specified various investments but not all of these have been completed.

Under the previous government, the licence was originally for 25 years but this was reduced to 15 years by the current government; ten years of which have already passed. The monopoly on fixed lines finishes in 2010. Much of the Praia government's communications infrastructure is sourced from CVT.

The Cape Verdean government owns a "golden share" of 3.4 percent in CVT, with the balance held by Portugal Telecom (40 percent) and other investors (46.4 percent). The national network has a total capacity of just under 80,000 lines, and currently, there are slightly over 70,000 subscribers.

According to information gathered by 'Balancing Act', the privileges of the privatised national operator are to be reduced already at the end of this year, with Shanghai Telecom being the most probable choice of a licence to become an almost complete second national telecom operator. Only the fixed line monopoly for CVT will remain in place until 2010.

The question is raised whether Cape Verdean consumers will note an impact of this new competition. According to a source close to Praia's Ministry of Communications it will "lower prices and provide a challenge to the incumbent Portugal Telecom." Rates are currently relatively high in Cape Verde.

Cape Verdean Prime Minister Jose Maria Neves visited the Chinese city of Shanghai less than one month ago. According to the state-controlled Chinese news agency Xinhua, Mr Neves on 29 August met Shanghai Mayor Han Zheng and local business leaders. The Prime Minister was quoted as saying that Cape Verde was hoping "for more investment from Shanghai entrepreneurs in its ocean shipping, finance and hi-tech industries."

There are no confirmed reports to whether Prime Minister Neves met with representatives of Shanghai Telecom during his recent stay in the Chinese metropolis. The Shanghai Telecom Corporation is one of the leading media and telecom companies in this booming Chinese city, where it provides all kind of telecom services, including broadband internet (ADSL). It is not known to head major operation abroad yet.

By Russell Southwood

© afrol News / Balancing Act

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