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The Economic Importance of
Telecommunications in
Portugal
Aims of the Study
To analyze the impact on the economy of
investment in telecommunications
To determine the importance of
telecommunications by sector
To develop scenarios for the evolution of the
telecommunications sector
2
Scenarios
Structure of
Market
Market
Segments
Operators
Basic
Scenario
Investment
Demand
Optimistic
Scenario
Regulatory
Framework
3
Technology
Investment Scenarios
Basic and Optimistic Investment Scenarios, 1998-2005
Billions* PTE
250
PTE 1 700
billion
200
150
100
PTE 1 350
billion
50
Basic
Note: These forecasts are not inflation-linked
* 1 billion = 1 thousand million (TN)
4
Optimistic
5
2
0
0
4
2
0
0
3
2
0
0
2
2
0
0
1
2
0
0
0
2
0
0
9
9
9
1
1
9
9
8
0
The Economic Impact of
Telecommunications
Real GDP
Consumption
Productivity
Inflation
Salary Levels
Unemployment
5
The Economic Impact of Liberalization on
the Portuguese Economy (1998 - 2005)
Optimistic Scenario
 Cumulative effect on GDP: 2.1%
 Annual productivity growth: 4.4%
6
Sectorial Analysis
 Economic base shifts towards services
 Growth of tele-intensity index
Tele-intensity index for services 1.64%
 Financial Services and Insurance - two
sectors with high tele-intensity
7
The tele-intensity of the Portuguese
Economy
Tele-intensity
Insurance
83%
4,9%
Banking
69%
Distribution
55%
8
2,3%
1,9%
Making Economic Benefits a Reality
 Growth of tele-intensity index
 Productivity gains and innovation
 Development of necessary infrastructure
 Attracting investment by multinationals
 Attracting companies providing
telecommunications services
 Public sector as catalyst
9
Questions to the Panel
 How can Portugal maximize the potential
benefits of liberalization?
 What is the role of the State in this process?
 And the Operators: how can they drive innovation
and competitiveness in the economy?
10
The Economic Importance of
Telecommunications in
Portugal