The most remote islands have become staging posts for the telecommunications network.

Courtesy Dhiraagu

Free broadband, ISDN or dial-up internet service from any working phone line, with an instant set-up CD to ensure easy access. Any problem with your line fixed within 24 hours. A working payphone always within walking distance. If this sounds like a pipe dream – which it does, to the average New Yorker or Londoner – maybe you should move to the Maldives.

Since the 1970’s, with the help of British telecoms giant Cable and Wireless, the Maldives have gradually become wired. Midhtah Hilmy, the Maldives’ Deputy Minister of Communication, Science and Technology, says the sector’s rapid progress was much needed. “It is amazing that we have remained one nation given the lack of communications. Before the telecom came into being, the main mode of communications was through transportation – by sea – and it could take maybe three months, to get a message across from the capital to the northernmost or southernmost islands, depending on the wind.” An extensive modern network, he explains, has been invaluable in creating much-needed national identity and forwarding socio-economic development.

From the start, the government’s insisted that Dhiraagu, (the islands’ only telecoms company, a joint venture between the government and Cable and Wireless) connect all islands to telephone services in order to achieve its initial license. Ismail Waheed, Dhiraagu’s CEO, remembers that the company was stretched to its limits. “It was a very big challenge for us both financially and in terms of the tech and the work involved,” he says.

But the second factor that enabled the connection of the whole country was Dhiraagu’s discovery that
linking even the smallest atolls to the network was profitable.

“Initially they [Dhiraagu] had hesitations – these are very small communities with…hardly any economic activity,” says Hilmy “But the mobility of our population, seeking jobs, seeking educational opportunities, looking for help… makes communications a very basic necessity. Anyone who puts money into it, will make money – and they [Dhiraagu] did.”

In return for its exclusive contract, the government has stipulated that Dhiraagu sometimes go beyond the call of duty to provide communications to everyone, no matter how isolated their area. The services Dhiraagu now has operating across the Maldives include smartcard-based public phones, all the voicemail and faxmail accouterments one might expect from a much larger nation, all kinds of internet access and web hosting capability, and a mobile phone per four of the adult population – the highest ratio in South Asia.

Opening up the market
Now that service is established across the network, the government is ready to implement its new policy of liberalization. With a program that started in 2001 with the invitation to foreign companies to bid to become new Internet Service Providers in the Maldives (the government plans to announce the winning bidder’s name as soon as contracts have been signed), the sector’s mobile phone business is now being opened to bids from outside the country. “We need to liberalize to get the best out of the telecom industry,” says Hilmy. “It’s good that the government has a majority share in the present monopoly, but it believes that the benefits to private sector, the people, would far outweigh than having a monopoly situation.”

The new policy calls for offering a contract to any company willing to provide services to locations beyond the resorts and the capital Male’.The prospect has spurred Dhiraagu to initiate a plan for services on 35 islands previously without them. “Monopoly has had its purpose,” says Hilmy, “and has probably outlived it,” he says. “Now the government sees the necessity to introduce competition to give better quality service.”

Hilmy says the government plans to advertise in international papers and journals to attract bids. “We want someone who is big, who can effectively compete with Dhiraagu in the mobile sector,” he explains. He describes the ideal bidder as someone with wide experience, particularly in a developing country, with enough resources, both technical and financial, and a good business plan. He stresses they should also have a good grasp of the Maldives. “We would like someone to study well the Maldives market, understand it well. There is plenty of opportunity here, I can assure you.”

Dhiraagu will keep its monopoly on fixed lines until 2008, while everything else goes up for tender. In preparation for liberalization the government is setting up independent regulators, and planning a selloff of much of its share in Dhiraagu. Any potential bidders for the mobile contract will, it is hoped, bring a willingness to create new infrastructure to the table, although Dhiraagu is contractually required to aid a new company with its own equipment.

E-Services
The most modern, and characteristically Maldivian, of the government’s plans for its telecoms sector is the introduction of electronic government services. Within two or three years a network is to be established that will provide access to ministries and public companies through kiosks in all atoll capitals. “We will have a government portal,” says Hilmy, “and people will be able to access information, receive services, pay for services. Again, we’re trying to take government to the people rather than bringing people to the government.”

The purpose of these services, the Deputy Minister believes, is to serve the people better in a variety of ways. Delivery of educational materials for distance learning, medical information, the building of e-businesses through the government network: everything becomes possible. “It’s a pipe that both private sector and government can use for anything that they want – trade, education, health, business, whatever.”

Most ordinary Maldivians today access the web through cyber cafes, two or three of which are opening a week on some islands. These cafes have their costs subsidized by the government, making it easier for educational and health institutions to get access to information. “What we have said,” explains Waheed, “is that for those who are interested in providing a cyber café type operation, we will provide that at a tenth of the price, so you can pay for the line and you can start your own cyber café as a private business.”

Maldivian start-ups
One of the new opportunities presented by the arrival of modern telecommunications is the possibility of starting a infotech industry in the Maldives. The government has begun an incentive scheme to help people set up businesses. Waheed points out that many of the Maldives’ new generation are very computer-literate, a fact that is due principally to isolation. “I think there is also a limited amount of social entertainment the kids can have in the evenings,” he says, “so it’s quite easy for them to spend time doing, studying, playing with the PC, which can be very conducive to this kind of project.”

The proximity of India could be both a positive and a negative factor in such start-ups: negative simply for its size and dominance in the market, but positive in other areas. “India is a very good friend of ours and does assist us a lot, particularly in the areas of training and transfer of technology,” Hilmy says. “So, instead of seeing it as an impediment, we look toward it as a partner, a junior partner maybe, but nonetheless someone who will assist us and someone benefit from the experience.” The Maldives is hoping to send students to India for IT training, perhaps 300 at a time, to join the country’s 200,000 IT-related undergrads.

Waheed says that any collaboration with India in the infotech sector needs to be carefully regulated. “The Maldives is dealing with something like a quota,” he explains, “where only so many millions of rights to software development can be sold to the rest of the world.” He says that such a system defines the available market and gives Maldivian businesses identifiable goals. Full competition could be dangerous, though: “If we are left open to compete with India then we have to be very, very good or we have to have the right connections.”

Another question is whether such an incipient industry might at some point be hindered by Islamic feeling against modernization. Hilmy says Islam is compatible with progress, indeed treats it as a fundamental right. “Our Islamic values are not in the way of modernization,” he explains. “It is a religion that encourages modernization, encourages learning, encourages intellectual curiosity above all. The first revelations in the Koran are about learning. So I believe firmly that Islam does encourage modernization.”

If the Deputy Minister is right, the Maldives could be sitting on huge untapped resources. A new generation of computer and web-literate people, eager to study and set up new businesses, combined with a telecoms sector welcoming new business and infrastructure, could revolutionize the islands’ economy. What the nation will make of this opportunity remains to be seen, but the initial elements are in place for an entirely new kind of progress.