ICT in the Atolls: Maldives Case Study

INFORMATION AND COMMUNICATION

TECHNOLOGY IN THE ATOLLS:MALDIVES CASE STUDY

March 2004

I n t e r n a t i o n a l T e l e c o m m u n i c a t i o n U n i o n

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This report was prepared by Michael Minges and Vanessa Gray. It is based on researchcarried out from 28 May - 3 June 2003 as well as articles and reports noted in thedocument. The assistance of the Ministry of Communication, Science and Technologyand Mohamed Amir and Zulaikha Ibrahim was indispensable. Equally, the report wouldnot have been possible without the cooperation of Maldivian organizations. The list oforganizations met is attached in the annex to this report. The assistance of Dhiraagu,particularly their comments on earlier versions of this report, is highly appreciated.

The report is one of series examining the Internet in developing nations. Additionalinformation is available on 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 Maldives.

The title refers to the unique geographical situation of the Maldives. The countryconsists of 1'190 islands in 26 atolls. The word atoll comes from the Maldivian languageand refers to a circular reef or ring of coral islands surrounding a lagoon.

© ITU 2004

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Contents

1. Introduction ........................................................................ 1

2. Background ......................................................................... 3

2.1 Geography ..........................................................................3

2.2 Population ..........................................................................3

2.3 Economy .............................................................................4

2.4 Quality of Life .....................................................................5

2.5 Government ........................................................................5

3. Pervasiveness ...................................................................... 8

3.1 Telephony ...........................................................................8

3.2 Computers and Internet ........................................................9

3.3 Mass media ....................................................................... 12

4. Sector absorption .............................................................. 14

4.1 Education .......................................................................... 14

4.2 Business ........................................................................... 15

4.3 Government ...................................................................... 15

4.4 Health .............................................................................. 16

5. Connectivity ....................................................................... 21

5.1 International and domestic backbone.................................... 21

5.2 Exchange points ................................................................. 22

5.3 User access methods .......................................................... 23

6. Market ............................................................................... 24

6.1 Overview .......................................................................... 24

6.2 Fixed networks .................................................................. 25

6.3 Mobile services .................................................................. 27

6.4 Internet access .................................................................. 27

7. Information Society ........................................................... 30

7.1 Cyber City ......................................................................... 31

7.2 Economic impact ................................................................ 31

7.3 Employment impact ............................................................ 32

7.4 Social impact ..................................................................... 32

7.5 Education .......................................................................... 33

7.6 E-Government ................................................................... 40

8. Conclusions ....................................................................... 43

8.1 Small is beautiful? .............................................................. 43

8.2 Where does Mauritius stand? ............................................... 44

8.3 Recommendations .............................................................. 45

Annex 1: Acronyms and abbreviations .................................... 51

Annex 2: Schedule of Meetings ............................................... 53

Annex 3: ICT statistics ............................................................ 54

Figures

2.1 Map of Maldives ...................................................................3

2.2 Geographic and demographic characteristics ............................4

2.3 Tourists welcome..................................................................5

3.1 Universal telephone service and access ...................................8

3.2 Mobile in Maldives ................................................................9

3.3 Mobile pricing .................................................................... 10

3.4 Internet users and pricing ................................................... 11

4.1 Health system in the Maldives .............................................. 16

5.1 So close and yet so far ........................................................ 19

5.2 Mobile data ....................................................................... 21

7.1 Transforming the Maldives into an information society ............ 29

7.2 Telecom economic impact .................................................... 30

7.3 Maldives untapped Internet market ...................................... 37

7.4 Going abroad for higher education........................................ 39

8.1 Catching up ....................................................................... 45

8.2 Maldives in the DAI ............................................................ 46

Tables

2.1 Population indicators ............................................................4

2.2 Ranking Maldives human development ....................................6

4.1 Maldives at school .............................................................. 14

4.2 Health online ..................................................................... 17

5.1 International connectivity .................................................... 20

6.1 Maldives telecommunications milestones ............................... 23

6.2 Maldives Telecommunication Policy ....................................... 24

7.1 Private sector ICT courses ................................................... 40

8.1 Maldives SWOT .................................................................. 48

Boxes

7.1 e-Maldives ......................................................................... 30

7.2 Tourism and telecommunications: A marriage made in heaven ... 31

7.3 ICT in the Atolls ................................................................. 32

7.4 ICT potential for women...................................................... 36

7.5 Increasing awareness and attracting new customers ............... 38

8.1 State of the Internet in Maldives .......................................... 47

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1

1. Introduction

1. Introduction

Information and communicationtechnology (ICT) is a key issue formembers of the InternationalTelecommunication Union (ITU), theUnited Nations specialized agency fortelecommunications. In that respect,the ITU has carried out a series of casestudies researching ICT in differentnations.1 This study looks at ICTdiffusion in the Republic of Maldives. Ittouches on specific problems such asisolation and undersized markets thatsmall island developing states such asthe Maldives face in adopting ICT.2 Thestudy also examines how the Maldivesis evolving into an information society,particularly relevant in the context ofthe World Summit on the InformationSociety (WSIS), the first phase of whichwas held in Geneva, Switzerland inDecember 2003.3

The organization of this report is basedon a framework developed by theMosaic Group.4 The scope has beenwidened to incorporatetelecommunication networks such asthe fixed-line and mobile telephonenetworks. Mosaic considers six factorsas follows:

� pervasiveness: a measurebased on users per capita.

� geographic dispersion: ameasure of the concentration ofICT, from none or a single cityto nationwide availability.

� sector absorption: a measureof the degree of utilization ofICT in the educat ion,commercial, health care andpublic sectors.

� connectivity infrastructure: ameasure based on internationaland domestic backbonebandwidth, exchange points, anduser access methods.

� organizational infrastructure:a measure based on the state ofthe ICT industry and marketconditions.

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

The report also considers otherfactors not included in the aboveframework such as the evolution toan information society, pricing andgovernment policies.

2

Maldives Internet Case Study

1Resolution 31, �Telecommunication infrastructure and information and communication technologies for socio-economic and cultural development� calls upon the ITU to �organize, conduct or sponsor necessary studiesto bring out, in a different and changing context, the contribution of ICTs to overall development.� ITU. 2003.Final Acts of the Plenipotentiary Conference (Marrakesh, 2002).

2The ITU notes, �� small island nations and communities face particular problems in bridging the digitaldivide.� See Resolution 129 (Marrakesh, 2002) in ITU. 2003. Final Acts of the Plenipotentiary Conference(Marrakesh, 2002). Small island developing states (SIDS) form an official grouping in the UN system. For alist of the 46 SIDS see http://www.un.org/special-rep/ohrlls/sid/list.htm. [Accessed 4 February 2004].

3The WSIS Declaration of Principles makes special mention of the Small Island Developing States noting theyhave particular needs. For more on WSIS see the web site at: www.itu.int/wsis/index.html.[Accessed 4 February 2004].

4Since the Global Diffusion of the Internet (GDI) project�s inception in 1997, the Mosaic Group has studied theInternet in nearly 30 countries. See http://mosaic.unomaha.edu/gdi.html. [Accessed 4 February 2004].

3

2. Background

2. Background

Figure 2.1: Map of Maldives

Source: Dhiraagu.

2.1 Geography1

The Republic of the Maldives consistsof a chain of 1�190 coral islands spreadover 100�000 square kilometers(820 kilometers from north to south)and 26 natural atolls2 , in the northcentral Indian Ocean (Figure 2.1). Thenorthernmost atoll is located some600 kilometers southwest of India andMale�, the capital, is at a similar

distance southwest of Sri Lanka. Only199 islands are inhabited and almost99 percent of the country�s surface isocean. Archeologists believe that theislands have been inhabited for overtwo thousand years. The name of thecountry is derived from the Sanskritword, Maladiv, meaning a garland ofislands. Administratively the Maldivesis divided into 20 atolls.

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Figure 2.2: Geographic and demographic characteristics

Number of inhabited islands by population size, 2001 (left) anddistance of atoll capitals from Male', kilometres (right)

Note: The total number of inhabited islands in the year 2000 was 200. In addition there were 111 non-administrative islands including tourist resorts, industrial islands and islands used for other purposes.Source: ITU adapted from the Ministry of Planning and National Development.

Source: Ministry of Planning and NationalDevelopment, Census 2000.

Item

Total population 270�101

Growth (1995-2000) (%) 2.00

Urban population (%) 27.4

Population Density (per/km2) 906 - Male� 41'000

Age distribution (%):

0-14 40.7 15-64 55.1 65+ 3.7

Table 2.1: Population indicators

sharing one culture, one language andone religion. Everyone speaks Dhivehi,an Indo-Aryan language that is uniqueto the country. English is widely spokenby government officials and in thetourist industry and business sector. Itis also the language of instruction insecondary school. The official religionis Islam, with the majority SunniMuslims.

2.2 Population3

According to the 2000 census, thepopulation of the Maldives was 270�101,growing at two per cent a year during1995-2000. The mid-year 2003population was estimated at 285�066.The most populated island is Male�,where almost 30 percent of thepopulation live on some 1.77 squarekilometres. This makes it one of themost densely populated capital cities inthe world with over 41�000 people persquare kilometre. The next mostpopulated island has 9�500 inhabitantsbut most have less than 2�000inhabitants (Figure 2.2). According tothe national definition of urban,population residing outside of Male� isconsidered rural (72.6 percent). The2000 Census reported 40�912households with an average size of 6.6.The large household size is explainedby the tradition of living with theextended family.

Ethnically Maldivians are Dravidian.While their origins go back to differentgroups, they are predominantly ofIndian and Sri Lankan descendent.Maldivians are culturally homogeneous

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2.3 Economy

The Maldives, classified as a LeastDeveloped Country (LDC), has fewnatural resources and scarce arableland. According to the AsianDevelopment Bank, �the combinationof a small domestic market,remoteness, a dispersed population,and high internal transport costsposes formidable constraints todiversifying economic activity anddelivering public services.�4 Despitethese limitations the country�seconomy has seen rapid growth,especially since the 1980s raising theMaldives from one of the 20 poorestcountries in the 1970s to a middle-income country today. The two mainengines of the economy are tourismand fishing, accounting for almosttwo fifths of Gross Domestic Product(GDP) (Figure 2,3, left). The tourismindustry began around thirty yearsago with two resorts and some1�000 visitors. By 2002 tourismmade up 30 percent of GDP and thenumber of tourists had grown to485�000 (Figure 2.3, right). At thesame time the country�s limitedresource base and reliance onexport-oriented activities makes itvulnerable to external shocks. In the

aftermath of the terrorist attacks of11 September, the number of touristsdropped in 2001, the first ever annualdecline.

The Maldives� development challengesare closely linked to its geographic anddemographic situation. While thecountry�s overall unemployment rateis low, a 1998 report found that43 percent of the population, over90 percent of which are outside Male�,live on less than US$ 1.3 a day.Reducing this regional divide is amajor government concern. Onecause is the difficulty of providingservices to small and dispersedlocations. In that respect, thegovernment has a programmeencouraging inhabitants to move tomore populated islands. Howevermany people are reluctant to leave.

Besides vulnerability and regionalinequity, the Maldives faces labourconstraints. The population base is lowand post-secondary trainingopportunities are limited. Consequently,the Maldives has to rely on expatriateworkers (about one fourth of the labourforce is foreign) and overseaseducational institutions (to sendstudents abroad for tertiary degrees).

Figure 2.3: Tourists welcome

Distribution of Gross Domestic Product, 2002 (left) and tourist arrivals, 000s, 1972-2002 (right)

Source: ITU adapted from the Ministry of Planning and National Development.

Other

Primary

sector

3%

Primary:

Fisheries

7%Secondary

sector

15%

Other

Tertiary

sector

45%

Tertiary:

Tourism

30%

Contribution to GDP, 2002

142

120

195

315

467 461485

1972 1980 1985 1990 1995 2000 2001 2002

Tourist arrivals, 000s

2. Background

6


2.4 Quality of Life

Economic growth in the Maldives hasgone hand in hand with gains in humanwelfare. The United NationsDevelopment Programme (UNDP)ranked the Maldives 86th out of176 countries in its 2003 HumanDevelopment Report. The ranking isbased on a composite of four indicators:life expectancy, literacy, schoolenrolment and GDP per capita. Theposition of the Maldives, which placesthe country in the Medium HumanDevelopment group, is seven placeshigher than its GDP per capita rank,suggesting that it is doing better thanaverage with regards to otherindicators. For example the Maldiveshas a relatively high adult literacy ratecompared to other countries with asimilar income.

Table 2.2: Ranking Maldives human development

2001 data from UNDP 2003 Human Development Report

Source: UNDP.

Ranking within groups

Maldives Human Development South Asia Countries with similar Small IslandIndicators income States

Rank Indicator Value Rank Country Rank Country (PPP) Rank Country

86 Overall 86 Maldives 52 Cuba (5'259) 62 Mauritius

Life expectancy 66.8 99 Sri Lanka 77 Suriname (4'599) 71 St. Lucia

Literacy 97 127 India 86 Maldives (4'798) 81 Fiji

School enrolment 79 143 Nepal 92 Guyana (4'690) 86 Maldives

GDP per capita (US$, PPP) 4'798 144 Pakistan 105 El Salvador (5'260) 103 Cape Verde

2.5 Government

Apart from brief interludes, theMaldives remained independent until1887, when it became a Britishprotectorate. It gained independencein 1965 and three years later itbecame a Republic. There are nostructured political parties andcandidates run on their personalqualifications. President MaumoonAbdul Gayoom is the second sinceindependence and has been reelectedevery five years since 1978. Thelegislative assembly, the People�sMajlis, is also elected every five years.The President appoints eight memberswhile two members are elected fromeach of the twenty administrativeatolls.

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1Parts of this section have been adapted from the �Country Profile� page of the Ministry of Trade, Industriesand Labour website at http://www.investmaldives.com/home.htm. [Accessed 4 February 2004].

2The word atoll comes from Dhivehi (the national language) and means a circular reef or ring of islandssurrounding a lagoon.

3Parts of this section have been adapted from the Statistical Yearbook of Maldives and the Population andHousing Census of the Maldives 2000 available from the Ministry of Planning and National Developmentwebsite at: http://www.planning.gov.mv. [Accessed 4 February 2004].

4Parts of this section have been adapted from the Maldives page on the Asian Development Bank website athttp://www.adb.org/Maldives/default.asp. [Accessed 4 February 2004].

2. Background

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3. Pervaisveness

This chapter examines individual,household and community access toICT (fixed and mobile telephones,computers and the Internet) as wellas mass media (newspapers, radiosand televisions) and compares thesituation in the Maldives to othercountries.

3.1 Telephony

The Maldives has made tremendousprogress in providing basic telephoneaccess to its inhabitants. In 1999, itsucceeded in providing telephoneservice to all 200 inhabited islands(Figure 3.1, left). Given the small sizeof most islands, this suggests that allinhabitants are within walkingdistance of a telephone. At least twopayphones have been installed oneach inhabited island, providingtelecommunication access to 100 percent of the population. Thus the

Maldives has achieved universalaccess to telephone service. This is aremarkable accomplishment for aLeast Developed Country (LDC). Thefive-year project to provide telephoneservice to all islands was fulfilled bythe incumbent operator Dhiraagu aspart of its license conditions. Therewere 30�056 fixed telephone lines atDecember 2003 for a telephonepenetration of 10.5, the highest in theSouth Asia region and second highestamong the LDCs.

Access to telecommunications is alsobeing extended through the expansionof mobile cellular telephone services.Growth has been particularly highsince the launch of pre-paid with thenumber of mobile subscriberssurpassing fixed in April 2002(Figure 3.2, left). Mobile is also wellsuited to the Maldivian environmentof boat transport among the various

Figure 3.1: Universal telephone service and access

Percentage of population with access to fixed telephone and percentage of households witha fixed telephone, 1994-2003 (left) and distribution of fixed telephone lines by location,

per cent, 2002 (right)

Note: In the left chart, data for 2000 for the percentage of households with a telephone is from theCensus. Data for other years is calculated based on the number of residential lines adjusted for theestimated number of second telephone lines in households.Source: ITU adapted from Dhiraagu and Ministry of Planning and National Development.

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islands since cellular signals areavailable at sea in most atolls wherethere is mobile coverage. Mobile cellularcoverage stood at 71 per cent inSeptember 2003 with 82 islands andall resorts covered. At December 2003,there were 66�466 mobile subscribers(of which 80 per cent were pre-paid)for a density of 23.3 (32.8 if effectivecoverage is used). This is the highestin South Asia as well as among theLDCs.

According to the 2000 Census, 23 percent of homes in the Maldives had afixed telephone line. This is up froman estimated 13 per cent in 1990.There is a large difference in universalservice �defined as the number ofhouseholds with a telephone�between Male� and the atolls. 71 percent of household phones are in Male�which has a home fixed telephonepenetration of 68.7 per cent comparedto 8.7 in the atolls. One reason is thatresidential telephone service is onlyavailable on 12 islands. Male� also hasa high second home telephone lineratio of 1.3. This is partly explainedby the fact that many households haveextended members residing in them(e.g., parents with grown children,relatives from the atolls, etc.). It couldalso partly be explained by usage of

the second line for Internet access.There are no data on the number ofhouseholds with a mobile telephone.Given the growth in cellular and thefact that residential fixed telephoneservice is not available on mostislands, it is likely that universalservice will most l ikely beaccomplished through mobile. This isparticularly important since thegrowth rate of fixed telephones inhouseholds has been stagnant overthe last few years.

Universal telephone access policy hasbeen based on subsidization of localfixed service. Tariffs for local telephoneservice have not changed since 1994.There is a nationwide connectioncharge of Rf 1�720 (US$ 134) andmonthly subscription charge of Rf 30(US$ 2.33) for fixed telephone service.Call charges are Rf 0.25 (US¢ 1.95)per minute (there is no off-peak rate)for fixed to fixed and Rf 2.00 (US¢ 16)for fixed to mobile. It would not appearthat affordability is a major problem.The monthly subscription charge and100 minutes of local calls wouldamount to 2.3 per cent of per capitaincome. The one time installationcharge amounts to 5.9 per cent of percapita income. Technically there is nowaiting list (it stood at 113 at the end

Figure 3.2: Mobile in Maldives

Fixed and mobile telephone subscribers per 100 inhabitants (left) andmobile telephone subscribers and population coverage (right)

Source: ITU adapted from Dhiraagu.

6.1

10.5

23.3

33.8

-

5

10

15

20

25

30

35

40

1996 97 98 99 2000 01 02 03

Fixed and mobile telephone per 100 inhabitants

Mobile

Conversion to

digital mobile Nov.

99

Fixed

Total

Mobile passes fixed, Apr. 02

Pre-paid launched Sep. 01

-

10'000

20'000

30'000

40'000

50'000

60'000

70'000

1997 98 99 2000 01 02 03

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%Pre paid

Post paid

Population Coverage

Mobile telephone subscribers

3. Pervaisveness

10


of 2002) with service available ondemand in the islands there arefacilities.

The main problem to expandingindividual and household access is alack of service availability:

� Around sixteen per cent ofhouseholds do not haveelectricity.

� At September 2003, 29 per centof the population were notcovered by the mobile cellularservice.

� Residential fixed telephoneservice is available on twelveislands covering around forty percent of households.

As mentioned, mobile service could bea solution for achieving higher levelsof universal service in the Maldives.For that to happen, coverage needsto be expanded and pricing reduced.Coverage has steadily increased andis forecast to reach almost threequarters of the population by the endof 2003. This suggests that assumingthe service were affordable, almostthree quarters of households in theMaldives could have a mobile phone.

One way of analyzing the pentotial formobile-fixed substitution is tocompare the monthly costs of service.The cheapest pre-paid voucher isRf 100 which allows 37 minutes ofpeak time conversation with an expiryof 30 days. This is more than twice asmuch as what it would cost a fixedline subscriber (Figure 3.3, left). Thismobile premium is also reflected inregional comparisons. The Maldiveshas the highest per minute mobile callcharges in the South Asia region (aswell as the highest connection andSMS prices, Figure 3.3, right).Competition explains part of thedifference with all South Asian nationsexcept Maldives and Nepal havingmore than one mobile operator.However Nepal still has significantlylower mobile tariffs than Maldives.

3.2 Computers and Internet

There were an estimated 10�000 PCsin the country at the end of 2002.There is no local assembly and all PCsare imported. Import taxes on PCs area moderate five per cent compared toan average of 21 per cent for otherproducts. According to the Populationand Housing Census 2000, thepercentage of homes with a personalcomputer (PC) was 6.2. Like other ICT,

Figure 3.3: Mobile pricing

Comparison of monthly charges for mobile and fixed services in the Maldives, Rf, 2003 (left) andprice of one minute mobile call, US$, 2003, South Asia nations (right)

Source: ITU adapted from Dhiraagu, World Telecommunication Development Report 2003.

$0.2

$0.12

$0.11

$0.10

$0.10

$0.06

$0.05

One minute mobile call, peak rate, US$, 2003

India

Nepal

Pakistan

Bangladesh

Sri Lanka

South Asia

Maldives

Monthlycharge

Call charge(per minute)

Usagecharge

Totalcharge

Mobile

100(US$ 7.78)

2.7(US¢ 21)

Included invoucher

100(US$ 7.78)

Fixed

30(US$ 2.33)

0.25(US¢ 1.95)

9.26(US$ 0.72)

(37 minutes)

39.26(US$ 3.06)

Note

30 days validityfor pre-paid;monthly rental forfixed telephone.

Peak. For fixed,refers to local call.

Mobile allows 37minutes of peaktime conversationwith Rf 100voucher.

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the geographic distribution of PCs isuneven. Home PC penetration in Male�is 21.9 per cent compared to 1.3 percent in the atolls.

It is estimated that approximately14 per cent of homes in Male� hadInternet access in October 2001suggesting that more than half thehome PCs have a connection.1 Dhiraaguhas had a program since 2000 withleading vendors to sell PCs alreadyInternet ready.2 Dhiraagu offersnationwide �pay as you go� dial-upInternet access, charging the same rateregardless of location. This means thatdial-up Internet access is availableanywhere in the Maldives where thereis a telephone line. Around 500 usersare also utilizing their mobile phonesto access the Internet.

There are no official surveys on thenumber of Internet users in thecountry. Dhiraagu estimates that therewere 15�000 users at the end of 2002for a penetration of 5.3 per cent of thepopulation. The estimated number ofusers is based on the followingmethodology:

Figure 3.4: Internet users and pricing

Internet users and per 100 inhabitants, Maldives (left) andInternet access prices for 20 hours of dial-up use per month, US$, 2003, South Asia (right)

Note: The right chart show the price of dial-up Internet use for 10 hours of peak and 10 hours of off-peakuse per month. Telephone usage charges are included but not the line rental. In the case of the Maldives,there is no separate charge for telephone usage for Internet access.Source: ITU World Telecommunication Indicators database.

� The number of telephone linesusing the Dhiraagu �pay as yougo� dial-up service is around5�000 each month.3 Dhiraaguestimates that on average twopeople use each line. That makes10�000 users.

� Other customers with dedicatedand broadband subscriptionssuch as government offices andlarge businesses many of whichhave LANs. This accounts foranother estimated 5�000 users.

Internet penetration in the Maldivesranks it number one among SouthAsian nations, second among LDCsand 14th out of 38 small island states.The figure of 15�000 Internet userswould not include people usingInternet cafes. Thus, it is aconservative figure. A survey of thenumber of Internet users is critical tomore accurately determine Internetusage in the country and to explorethe digital divide in greater detail. Itis estimated that 80 per cent oftelephone lines used for Internetaccess are in Male�.

3. Pervaisveness

12


Dhiraagu offers several differentInternet packages, all of which includetelephone usage charges. Internet ondemand�to a toll-free number�is Rf0.55 (US¢ 0.4) per minute. This is themost popular option and used by themajority of dial-up users. Severalmonthly packages are available withper minute charges ranging fromRf 0.42 to Rf 0.33. These packagesare used by less than 20 per cent ofdial-up users. The entry-level packageis Rf 100 (US$ 7.78) for four hours ofusage. This amounts to 4.1 per centof per capita income. Though notexorbitant, this package does notprovide many hours of use inhibitingexperimentation and the developmentof a vibrant Internet community. Interms of regional comparisons,Internet prices are high in theMaldives. The country has the secondhighest prices in South Asia, morethan twice as much as what mostother countries in the region charge(Figure 3.4, right).

There are a number of public Internetfacilities. Dhiraagu has eight Internetcafes. Charges at its café in Male� areRf 10 (US$ 0.78) for ten minutes. Inaddition, Dhiraagu provides a 75 percent discount for educationalinstitutions and encourages privatecompanies to set up Internet cafes.There are 55 islands using dial-up

Internet access, typically provided asa community centre type of operation.The monthly subscription is Rf 200 permonth (normally 2�000 for non-residential islands) and Rf 1�720 forthe installation. Dhiraagu also gives atwenty percent discount for calls.

3.3 Mass media

According to the 2000 Census,56.7 per cent of homes had atelevision set. Of those, 85.7 per centhad a VCR/DVD player and nine percent had a satellite dish. There arealso between 5�000 - 7�000 cabletelevision subscribers in Male�.

Broadcast media are governmentowned. The Voice of Maldives operatestwo radio channels one on the AM andthe other on the FM band. It alsoprovides audio streaming from its website <www.vom.gov.mv>. MaldivesTelevision operates one terrestrialchannel. Limited terrestrial-basedbroadcasting explains the highdemand for pre-recorded media andmulti-channel television.

There are two daily newspapers withweb sites, Haveeru and Miadu. Theypublish in Dhivehi with some English-language pages. The largest, Haveeru,reports a daily readership of 69.8 percent of the population.4

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1Ministry of Communication, Science and Technology. e-Maldives: The Republic of Maldives NationalInformation and Communications Technology Policy. Draft. 2003.

2Dhiraagu. 19 September 2000. �Personal Computers Available �Dhivehinet-Ready� from Leading Maldives PCVendors.� Press Release. http://www.dhiraagu.com.mv/newsdesk/index.php?newsid=159.[Accessed 5 February 2004].

3This service requires no registration and is available from any telephone line in the country at the same rate.Speed is 56 kbps in Male� some other islands. The maximum speed outside Male� depends on the switchradio network interface.

4See the Haveeru web site at http://www.haveeru.com.mv/ads. [Accessed 5 February 2004].

3. Pervaisveness

14


4. Sector absorption

This chapter identifies the degree ofut i l izat ion of Information andCommunication Technology (ICT) indifferent sectors of the economy.

4.1 Education

The Ministry of Education (MOE,<www.moe.gov.mv>) is increasinglyintegrating ICT into its daily work. A128 kbps leased line provides almostall staff at the ministry headquarterswith access to the Internet. Thereare plans to expand the Ministry�sLocal Area Network (LAN) and toconnect all educational institutionsin the atolls to a Wide Area Network(WAN). The Ministry�s web site offersstatistics about the educationalsystem, a directory providing linksto web pages for four schools andinformation about studying abroadincluding scholarship applicationforms.

While every inhabited island in theMaldives has a primary school,secondary education is only providedat atoll capitals. Higher secondaryschools exist in only three atolls

outside Male� and of the 1�481 highersecondary school students, 84 percent are studying in the capital.Primary and secondary schools inMale� have computer labs with accessto the Internet. Some schools in theatolls are equipped with computerswhile a few have Internet access,typically restricted to staff.

The incumbent telecommunicationoperator Dhiraagu�s Internet forSchools in it iat ive providesdiscounted access.1 Launched inNovember 2001, schools receive freeinstallation, do not pay monthlysubscription charges and get a75 per cent discount on usagecharges for dial-up access.2 In July2003 Dhiraagu introduced anAsymmetric Digital Subscriber Line(ADSL) 256 kbps package foreducational inst itut ions, whichprovides schools located in Male�unlimited usage for a fixed monthlyrate of Rf 5�000 (US $389).Discounted Internet access is alsoavailable for private educationalinstitutions that have been certifiedby the Maldives Accreditation Board.

Table 4.1: Maldives at school

March 2003

Source: Ministry of Education.

Schools Students Teachers

Male� Atolls Total Male� Atolls Total Male� Atolls Total

Total 29 305 334 24�805 68�331 93�136 4�168 1�337 5�505

Primary(6-12 years) 16 213 229 13�763 52�406 66�169 2�951 693 3'644

Lower secondary(12-15 years) 11 89 100 9�803 15�683 25�486 1�194 566 1�760

Higher secondary(16-17 years) 2 3 5 1�239 242 1�481 23 78 101

15

The government contracts the privatesector to install and maintain ICTequipment for schools that lack theexpertise. In some schools that arepoorly equipped, mainly in the atolls,parents have donated computers.3

The Sixth National Development Plan(NDP)4, which defines governmentpolicies for the period 2001-2005,highlights the need to expand andpromote ICT in education, includingthe reduction of Internet charges andimproved connectivity. The NDP alsoemphasizes the use of ICT formanagement purposes. The MOE isdrafting a strategy document thatdiscusses ways of using ICT as a toolto improve educational institutions bymaking them more efficient undimproving communication. Goalsinclude establishing a school networkto share educational resources andmaking use of distance education. Thedraft identifies a number of concretegoals such as providing all schools witha computer, providing all teachers withemail and providing Internet accessto all schools.

The Maldives College of Higher Education(MCHE, <www.mche.edu.mv>)established in 1998, provides post-secondary education. There are some6�800 full and part-time studentsattending MCHE. Within the MCHE, theFaculty of Management and Computinghas several computer laboratories.There are plans to expand facilitiesincluding establishing a network as wellas additional computer laboratories inorder to increase capacity to at least100 students at any given time.Students enrolled in computer relatedprograms have free Internet access.According to the results of aquestionnaire filled out by students andacademic staff, the main barriers forusing ICT is the lack of availableresources. Twenty percent, for example,said it was difficult or impossible to finda computer most of the time.

MCHE�s 2002-2004 InformationTechnology Strategic Plan calls for theexpansion of network infrastructure andcoordination of ICT resources to enhanceaccess to information and improvemanagement and administration.5

Distance education is used to a limitedextent. MCHE provides educationalservices to the atolls through theCentre of Open Learning. Studentsfrom over 100 islands meet in one ofthe 15 centres that are located acrossthe country once a month for a periodof two days. The MCHE provides theeducational material. Some50 percent of the exams are takenunder supervision. ICT is primarilyused for telephone and email contactsbetween students and tutors(assuming the services are available).The Distance Education Project hasmade available the programmes ofIndia�s Indira Gandhi National OpenUniversity (IGNOU) to Maldivianstudents for over a decade. TheTertiary Institute of Open Learning atMCHE coordinates the project. TheIndian government providesscholarships for Maldivian students topursue studies via the IGNOU distancemode.

4.2 Business

There are no formal statisticsregarding ICT use in the businesssector although one 2001 surveyfound that 86 per cent of businessesin Male� had Internet access.6 Ancillaryevidence suggests that most largecompanies and certain industrieswould have PCs and access to theInternet. This is particularly true in thetourism industry where most of theresorts have web sites or email.7 Thereare five companies in the bankingsector; they all have email and one hasa web site.8 The Maldives Customsreports that 85 per cent of declarationsfrom substantial importers aretransmitted electronically.

The extent of computerization andInternet access among smallerestablishments is uncertain. TheMinistry of National Planning andDevelopment estimated that there were4�565 small establishments in 1999employing roughly 10�000 people.9

4.3 Government

The use of ICT within ministries iswidespread and most governmentoffice workers have access to a PC andthe Internet. The Internet is primarily


16


used for research and email. Themajority of government agencies inMale� have Internet access through aleased line and are connected througha Local Area Network (LAN). At theregional level, only the atoll offices areequipped with Internet access and thisis usually dial-up access and expensive.

Databases are among the most popularapplication and exist in almost everyministry. There is some duplication anda few ministries continue to keep writtenrecords of documents already inelectronic format. The Ministry ofFinance and Treasury is currentlycomputerizing the national accountingand debt management systems andthere are plans to expand the use ofICT in the financial area to otherministries. Most ministries also haveweb sites or web pages.

One of the most extensive users is theMaldives Airport Company, agovernment-owned enterprise underthe Ministry of Transport and CivilAviation. Its building is wired for100 Mbps Ethernet and every employeehas had individual Internet access andemail since 2001.

Given the fact that the governmentsector is one of the country�s majoremployers, providing governmentpersonnel with access to ICT isbringing the Maldives a major steptorwards becoming e-ready. Almost27�000 people, close to ten percentof the population, worked for thegovernment in 2001.

The Maldives recently launched acomprehensive e-governmentproject. The InformationTechnology Development Project(ITDP) includes setting up anetwork to connect agencies inMale� and 20 atolls, developing agovernment portal and providingonline services. The ITDP alsoaims to overcome the lack ofcoordination between ICT projectsin the government. Currently,each government entity is incharge of its own ICT budget andthere are no guidelines about howmuch should be spent on ICTs.This will change with ITDP, whichwill broadly define ICT expenditure

and ensure that every agency has aminimum of ICT equipment.

One of ITDP�s main objectives is toconnect all government agencies �those in Male�, in the atoll capitals, andeventually the island administrations �to a common network. This will allowthe different government bodies toshare databases and easily exchangeinformation. The network in Male� willbe high-speed, using fibre optic with thetechnology for the atoll backbone underdiscussion. The top level design of theproject is near completion. It broadlydefines the project�s architecture andobjectives, including the choice of onlineapplications, which have been discussedwith different government bodies. Theimplementation of the project, which isoverseen by the Ministry ofCommunication, Science andTechnology (MCST), is expected tobegin early 2004.

4.4 Health

Medical services are provided at theIndira Gandhi Memorial Hospital in Male�(the country�s main hospital), oneprivate hospital in Male�, six regional

Figure 4.1: Health system in the Maldives

Source: Ministry of Health.

17

hospitals, and four atoll hospitals. Inaddition, every atoll has at least onehealth centre. Medical services onother islands are provided throughhealth posts (Figure 4.1).

The Ministry of Health is in charge ofoverall policy and delivering basicservices to the atolls and islands. Themain use of ICT in the health sectoris within the Ministry. There are70 computers connected to a LAN atheadquarters in Male� for124 employees. Although all terminalshave high-speed Internet access, themost popular application is theexchange of information and email.Some work of the Ministry iscomputerized and a number ofdatabases are used to manage andstore information, for example on birthand death registrations. While all12 hospitals have Internet access,there is no overall health network.Also, the use of the Internet as aresearch tool is limited. The Ministrywebsite has information on the healthsystem, including surveys, statistics,reports and conference papers. It alsoprovides information on job vacanciesin the health sector, links to news

articles, and an interactive map withthe main health indicators for eachatoll. Users can also join a healthdiscussion forum to post messages,search the site and ask questions viaemail. Besides the Ministry most otherhealth related organizations have websites (Table 4.2).

Telemedicine is carried out betweentwo atoll hospitals and the IndiraGandhi Memorial Hospital in Male�. Thetransfer of images has helped improvehealth care but since the hospitalshave dial-up connections with narrowbandwidth, the applications used arelimited. The dial-up connection doesnot support advanced telemedicineapplications, such as teleconferencing,which would need at least a 512 kbpsconnection. The lack of ICT skillsamong personnel is a further barrierto greater use of telemedicine.Discussions have been held with Indiaregarding the use of telemedicine tolink Maldivian health centres withhospitals in India.10 The ITDP projectcalls for a Hospital Information Systemthat would computerize patientrecords adding to time savings formedical staff (Chapter 7).

Table 4.2: Health online

Maldives health organizations with web sites

Source: Ministry of Health.

Ministry of Health www.health.gov.mv

Department of Public Health www.dph.gov.mv

Maldives Nursing Council www.maldivesnursingcouncil.gov.mv

Maldives Medical Council www.maldivesmedicalcouncil.gov.mv

Board of Health Sciences www.health.gov.mv/hsb

Indira Gandhi Memorial Hospital www.igmh.gov.mv


18


1Dhiraagu. �Internet for Schools.� Press Release. 4 November 2001.http://www.dhiraagu.com.mv/newsdesk/index.php?newsid=106. [Accessed 4 February 2004].

2In Male, access is via a 64 kbps ISDN line while on the islands it is via analogue dial-up. Schools on islandswithout residential telephone service must pay an Rf 300 monthly subscription. See �Internet Access forSchools� on the Dhiraagu website at http://www.dhiraagu.com.mv/dhivehinet/accessforschools.[Accessed 5 February 2004].

3Analysis of Science & Technology Capacity and Needs. Republic of Maldives Science and Technology MasterPlan. Prepared by the Ministry of Communication, Science and Technology, April 2001.

4Maldives Sixth National Development Plan (2001-2005), at:www.presidencymaldives.gov.mv/v3/pages/body.phtml?ID=12&Table=Head2&PTID=4.[Accessed 1 February 2004]

5Maldives College of Higher Education. Information Technology Strategic Plan. Draft.

6Ministry of Communication, Science and Technology. 2003. Policy Framework for e-Maldives. The Republic ofMaldives National Information and Communications Technology Policy. Draft.

7The following web site has a directory with web site links of resorts in the Maldives:http://www.maldivesresorts.com. [Accessed 1 February 2004].

8See the �Financial Institutions� section on the Maldives Monetary Authority web site.http://www.mma.gov.mv/fi.php?itm=1. [Accessed 1 February 2004].

9See Ministry of National Planning and Development. Small Establishment Survey 1999. 11 June 2001.http://www.planning.gov.mv/stat/ses/ses.htm. [Accessed 1 February 2004].

10Speech by the Prime Minister of India Shri Atal Bihari Vajpayee At the Civic Reception in Male.23 September 2002. http://www.meadev.nic.in/speeches/stmt-pm-civicreceptioninmale.htm.[Accessed 9 February 2004].

19

5. Connectivity

5.1 International anddomestic backbone

Maldives first connected to theInternet on 14th October 1996through a 64 kbps satellite connection.At June 2003, Maldives had 16 megabits per second (Mbps) ofasymmetrical (9 incoming and7 outgoing) international Internetconnectivity, all through satellite.1

There are four routes: a symmetricalconnection to the United Kingdom(terminated at Cable and Wireless), aconnection to Hong Kong, China(terminated at Reach), a connectionto Germany (terminated at theDeutsche Commercial InternetExchange) and a connection toSingapore (terminated at the

Singapore Telecom Internetexchange). The first three links areon the same satellite, Intelsat, and thelatter on the Singapore Telecomsatellite.

The Telecommunication Policy papercalls for the Maldives to examine thefeasibility of a fibre optic connectionto the Internet. One possibility wouldbe to connect to one of the threeundersea fibre routes passing nearby:the Fibre optic Link Across the Globe(FLAG), South Asia Far East (SAFE)and South East Asia-Middle East-Western Europe (SEA-ME-WE)(Figure 5.1). All have terminationpoints in India or Sri Lanka. Anotheroption is to connect to a new underseafibre optic system such as a proposed

Figure 5.1: So close and yet so far

Undersea fibre optic systems passing near Maldives

Source: ITU adapted from Alcatel, FLAG Telecom, www.safe-sat3.co.za.

5. Connectivity

20


cable between Cochin, India andMombassa, Kenya. The Maldives couldeither tap directly into an underseacable or establish a fibre link to Indiaor Sri Lanka and then leverage fromthose countries connections. Tentativeinquires have been made with anestimated figure of US$15 million givenfor a fibre optic connection betweenMale� and Cochin, India, a distance ofaround 540 kilometres. This is aroundtwice Dhiraagu�s combined capitalexpenditure for the last two years andis felt to be too high.

Dhiraagu pays US$ 1.3 million a yearfor international Internet bandwidth.This works out to around US$ 12�000per month per Mbps. In contrast,another small island state withundersea fibre connectivity Mauritiuspays less than half that (US$ 5�000per month). The higher cost thusseems to be partially due to higherprices for satellite connectivity and therelatively small bandwidth ordered.

Table 5.1: International connectivity

Maldives international Internet bandwidthindicators, 2001

Note: Bandwidth used for calculations wasbased on incoming only (4.5 Mbps in 2001).Ranking carried out for 37 countries. Bit-Circuit-Index refers to international Internetbandwidth divided by the number ofinternational telephone circuits (converted at64 kbps per circuit). Bit-Minute-Index refersto international Internet bandwidth dividedby the number of outgoing and incominginternational telephone minutes. Bits percapita refer to international Internetbandwidth divided by the population.Bits per subscriber refer to internationalInternet bandwidth divided by the number ofInternet subscribers.Source: ITU Asia-Pacific TelecommunicationIndicators 2002.

Value Rank

Overall 10

Bit-Circuit Index 0.4 16

Bit-Minute Index 0.3 18

Bits per capita 16.4 13

Bits per subscriber 409 1

Maldives scored relatively well in acomparison of international Internetbandwidth for Asia-Pacific countries(using 2001 data). The ranking wasbased on three bandwidth indicators andthe Maldives ranked 10th overall out of37 economies (Table 5.1). The Maldivesrank is pulled up because it scored first inthe amount of bandwidth per subscriber.In retrospect this was calculated only onmonthly subscriptions rather than pay asyou go users. For other parameters, itappears that the Maldives does not havesufficient bandwidth and has not yet madethe transition to an Internet economy(more Internet bandwidth capacity thanequivalent voice telephone circuits).

Dhiraagu has a backbone connectingall inhabited islands. The network ismicrowave except for a domesticsatellite link to the south because thedistance is too far. No data protocolsare used over the backbone.

5.2 Exchange points

The need for a national Internetexchange has thus far not beennecessary. Since Dhiraagucontrolled the international link,it performed the same functionas long as it only routed overseastraffic abroad. In addition, mostMaldives Internet traffic is to websites abroad given the Englishproficiency of the population andthe volume of content availablein those languages overseas.With the introduction of a secondISP and the development of localcontent (e.g., e-governmentproject, domestic e-mails), it islogical to create a nationalInternet exchange. Otherwise,locally destined traffic will berouted abroad, adding toexpensive international Internetconnectivity charges. Althoughthe new ISP and Dhiraagu havehad discussions, no decision hasbeen reached.

5.3 User access methods

Dial-up is the prevalentInternet access method withsome 5�000 subscribers.2

Asynchronous DigitalSubscriber Line (ADSL) was

21

launched in August 2002 and had503 subscribers at December 2003.ADSL is only available in Male�. Therewere also 62 leased lines and187 ISDN lines for Internet access atDecember 2003.

There are two cable television operatorswith around 7�000 subscribers. One hasa network in Male� based on coaxialcable.3 Another operates a MultipointMicrowave Distribution System(MMDS). Another company is in theprocess of installing a hybrid fibre-coaxial cable network in Male�.Although most cable TV subscribersare in Male�, it is also available onsome of the other islands. It wouldappear that the new cable networkcould support high-speed Internetaccess via cable modem.

Mobile Internet (e.g., Wireless AccessProtocol (WAP)) and high-speedmobile (e.g., General Packet RadioServices (GPRS)) services are notcurrently available. Nevertheless,there is a growing market for mobiledata services. Short Message Service

(SMS) volume has been growing andreached around 11 per subscriber inDecember 2002 (Figure 5.2, left). Agrowing number of users are utilizingtheir mobile phones as modems (atspeeds of 9.6 kbps) for PersonalDigital Assistants (PDA) or notebookcomputers to access the Internet. Therewere 500 such users in April 2003, upfrom around 200 in December 2001,suggesting the potential (Figure 5.2,right). Dhiraagu plans to launch GPRSin 2004. The Telecommunications Policycalls for a feasibility study about theintroduction of third generation mobileservice (3G).

Wireless Local Area Networks(WLANs) using the popular IEEE801.11b standard (i.e., Wi-Fi) areused by some organizations. There arenot any publicly accessible hotspotsin Internet cafes, coffee shops or otherpublic locations. However someresorts have set up hotspots for theircustomers. The new ISP has beengiven exclusivity for the use of the2.4 GHz band for Internet services fora year and half.

Figure 5.2: Mobile data

Number of SMS messages (left) and number of mobile data customers (right)

Source: ITU adapted from Dhiraagu.

5. Connectivity

22


1Dhiraagu adds incoming and outgoing bandwidth to calculate total international Internet bandwidth.

2There are some 1�100 subscribers to monthly Internet subscription packages with the remainder usingDhiraagu�s pay as you go scheme.

3J-sat Communication Cable Vision service http://www.j-sat.com.mv. [Accessed 8 February 2004].

23

6. Market

6.1 Overview

The Ministry of Communications,Science and Technology (MCST,<www.mcst.gov.mv>) is responsiblefor ICT sector policy.1 There is notelecommunication law with neededguidelines issued through specificregulations or decrees. TheInformation Technology DevelopmentProject (ITDP, see Chapter 7) calls forthe creation of a telecommunicationlaw. A Telecommunication Policy waspublished in 2001.2 This documenthas six main goals (Table 6.2) backedby specific objectives and actions. Anumber of the objectives have beenmet since the policy was issued andsome are to be addressed by the ITDP.

The Telecommunications Authority ofMaldives (TAM) was established in late2003 as industry regulator. Thefunctions had previously been carriedout by the Post andTelecommunication Section of theMCST. The TAM covers both thetelecommunication and postal sectors.

Table 6.1: Maldives telecommunications milestones

Maldives international Internet bandwidth indicators, 2001

Source: ITU adapted from Dhiraagu, other sources.

1943 Wireless radio circuit established to Sri Lanka

1955 First telephone exchange installed in Male'

1967 Radiotelephone service begins to be introduced in atolls

1968 First public telephone exchange

1977 International satellite earth station established

1988 Dhiraagu created

1996 Commercial Internet services introduced

1997 Analogue mobile cellular service introduced

1999 All inhabited islands have telephone service

1999 GSM cellular mobile service introduced

2003 License issued for second ISP

Its duties include licensing operators,tariff regulation and monitoring qualityof service.

Although The Maldives is a memberof the World Trade Organization(WTO), it did not participate in thenegotiations on basictelecommunications services andtherefore did not made a formalcommitment to liberalization.

Dhivehi Raajjeyge Gulhun PrivateLimited (Dhiraagu,<www.dhiraagu.com.mv>) is theincumbent telecommunication provider.It began operation in October 1988 asa joint venture company, 55 per centowned by the government and 45 percent by Cable and Wireless of the UnitedKingdom. Dhiraagu provides fixed(including national and internationallong distance), mobile and Internetservices with exclusivity for fixedservices through 2008. Other servicesare open to competition although onlyone license, for Internet access service,has been issued thus far.

6. Market

24


Table 6.2: Maldives Telecommunication Policy

25

6. Market

Table 6.2: Maldives Telecommunication Policy (cont�d)

26


6.2 Fixed

Maldives is a relative latecomer totelecommunications with the firsttelephone only being installed in 1955and the first public exchange in 1968.Since then, the market has growntremendously with the average annualincrease in main lines between 1980-2000 standing at 16 per cent. Thegrowth rate has declined to half of thatover the last few years as theaddressable market approachessaturation and mobile becomes morepopular. At April 2003, there were29�081 fixed lines in service for apenetration of 10.1

Network usage grew rapidly in the late1990s as more islands becameconnected to the backbone networkand the volume of telephone trafficgrew rapidly. However domestic fixedline traffic has been in decline the lastfew years as users migrate to usingtheir mobile phones more. Outgoinginternational traffic has also beenstagnant the last few years, with thevolume of incoming traffic growing.This is a result of asymmetricalinternational tariffs with it being moreexpensive to make international callsfrom the Maldives than the reverse.Increased mobile roaming has alsoimpacted international outgoing calls.

6.3 Mobile

Dhiraagu is currently the only mobileoperator. It launched an analogueAdvanced Mobile Phone System(AMPS) in 1997. At the time, forecastscalled for no more than300 subscribers by the year 2003.This forecast was exceeded and by1999, the system had already reachedits capacity. The decision was takento replace the AMPS system with adigital Global System for Mobile (GSM)network, launched in November 1999.Existing AMPS subscribers wereprovided incentives to switch to thenew network and the AMPS networkwas closed down. Pre-paid waslaunched in September 2001,expanding the opportunity for mobileaccess. In less than a year there weremore pre-paid than post-paidsubscribers. In April 2002, the numberof mobile subscribers surpassed fixed

subscribers. At April 2003, the numberof mobile subscribers was 48�204 fora penetration of 17.2 (31.8 whenconsidering only the populationcovered by mobile service). Thenumber of pre-paid subscribers was35�765 or 74 per cent of the total.

Dhiraagu has steadily expandedcoverage. Towards the end of 2003,population coverage stood at 71 percent. The network covers 82 inhabitedislands in 18 atolls and all 88 touristresorts. Tourists are a lucrative marketwith roaming accounting for almosthalf of Dhiraagu�s mobile revenue.Dhiraagu has roaming agreementswith 99 mobile operators in52 countries.

The Telecommunication Policy papercalls for opening the mobile marketto competition. A tender for a secondmobile operator should be issuedin 2004.

6.4 Internet

Dhiraagu launched Internet service inOctober 1996. It brands the serviceas DhivehiNet. Dhiraagu offers dial-up, broadband (ADSL) and leased lineaccess; web hosting; and alsomanages the .MV domain name.Regarding the latter, Dhiraagu is theadministrative contact registered withInternet Assigned Numbers Authority(IANA) for the .MV domain name.3

Registration information is availableon the Dhiraagu web site.4 Domainnames are bundled with an email andcost a relatively high Rf 500(US$ 38.91) to set up with a monthlysubscription fee of Rf 100 per month(US$ 7.78 or US$ 93.39 per year).5

Dhiraagu recognizes that thegovernment should undertake domainname registration but it is waiting forthe proper skills to be available beforetransferring responsibil ity. TheTelecommunication Policy calls fortransfer of domain management andadministration to the regulator.

The first market segment where thetelecommunication sector has beenliberalized is Internet access. Followinga tender, Focus InfoCom (majority-owned by a local company FocusComputers, www.focuscomp.com)

27

won the beauty contest for an InternetService Provider (ISP) license. Despitethe small market size, the tender fora second ISP attracted significantinterest. There were initially sixapplicants of which two dropped out;the remaining ones included investorsfrom Pakistan and Sri Lanka. Thegovernment selected the winnerbased on track record and plans formeeting universal service obligations(i.e., requirement to provide Internetservices in the entire country withinthe next ten years). For three years,the market will remain a duopoly.Focus paid US$5�000 for the licenseand will pay annual fees amountingto five per cent of gross revenue.

Focus Computers was established in1994. Business activities includeintegration services, distribution of

PCs, and training courses. It has some70 staff and three offices in thecountry. Focus Computers has an83 per cent stake in Focus InfoCom.A local cable TV operator owns theother part but the shareholding mightchange, although Focus has to keepthe majority (based on terms oflicense).

As part of the license award, Focuswas granted the exclusive right to the2.4 GHz frequency for the provisionof Internet use for several years. Thisis the same frequency that the popularIEEE 802.1a standard (i.e., Wi-Fi)uses. The rationale was that this wouldoffset the inherent advantage theincumbent has. It is logical to assumethat Focus will be pursuing a wirelessstrategy in providing access to itscustomers.

6. Market

28


1The Ministry of Broadcasting covers radio and television broadcasting.

2MCST. Maldives Telecommunication Policy 2001-2005. August 2001.http://www.mcst.gov.mv/Downloads/Documents/Telecom%20Policy-Public.pdf. [Accessed 1 February 2004].

3See the �Root-Zone Whois Information� for the Maldives on the IANA web site athttp://www.iana.org/root-whois/mv.htm. [Accessed 7 February 2004].

4Dhiraagu�s Domain Name Service is available at http://www.dhiraagu.com.mv/dhivehinet/domainnames/.[Accessed 7 February 2004].

5In contrast, domain names using .COM as well as other suffixes are available from the registrar NetworkSolutions for US$ 34.99 per year with no set up costs. See http://www.networksolutions.com/en_US/name-it.[Accessed 7 February 2003].

29

7. Information Society

A number of different plans lead theMaldives on its path towards aninformation society.1 The MaldivesVision 2020, introduced by thePresident in December 1999, guidesthe country�s aspiration to be a top-ranked middle-income economy bythe year 2020. Vision 2020 does notexplicitly mention information societybut notes, �Modern technology will bewidely used in the Maldives,facilitating progress and conveniencein all spheres of life.�2 The currentNational Development Plan (NDP)notes that ICT is important to bothpromote trade and business as wellas an industry in its own right thatcould help diversify the economy andgrow employment. The NDP calls forthe ICT sector to be liberalized to�create a knowledge basedeconomy.�3

ICT-oriented documents include the2001 Science and Technology MasterPlan highlighting current and potentialuse of new technologies and theTelecommunication Policy 2001-2005.The latter, developed by the Ministry ofCommunication, Science andTechnology (MCST), addresses policyrelated issues such as universal accessand liberalization of the market.Currently the MCST, together with theUNDP, is working on a national ICTpolicy called e-Maldives, to develop anapproach to move the Maldives towardsbecoming a �knowledge-based societywhere ICT is the engine to propeleconomic growth and an effectivebridge to digital divides and socialdevelopment by the year 2010�.4 Basedon the country�s main developmentchallenges as well as its current ICTstatus, the framework has identifiedfour key prerequisites that need to beestablished so that ICT can be a toolfor development within four pillars(Figure 7.1, Box 7.1). Within thisframework the document calls for anumber of initiatives and goals thatshould be carried out and reviewed bythe year 2010.

7.1 Economic impact

There are no official statistics on thesize of the overall ICT sector in theMaldives, although telecommunicationswould contribute the largest amount.The communications sector share ofGDP was 5.2 per cent in 2002, up fromfour per cent in 1995 (Figure 7.1, left).A number of factors have contributedto this increase including completion ofthe nationwide backbone in 1999,increases in fixed and mobile telephonesubscribers, launching of the Internetand growing tourism (and subsequentdemand for internationalcommunications). Communications isthe seventh largest direct contributorto the economy. In 2002,communications had the third highestsector growth rate after fishing and

Figure: 7.1: Transforming the Maldivesinto an information society

Source: e-Maldives. National Information andCommunications Technology Policy Draft. MCST andUNDP.


30


Figure 7.2: Telecom economic impact

Share of communications in GDP, per cent, 1995-2002 (left) andshare of various sectors in GDP, per cent, 2002 (right)

Source: ITU adapted from MPND.

Box 7.1: e-Maldives

The Ministry of Communication, Science andTechnology has drafted an Information andCommunication Technology (ICT) policy documentwith the support of the United Nations DevelopmentProgramme. Subtitled e-Maldives the draft policydocument lays out ICT benefits in four areas orwhat it calls pillars: 1) Employment creation; 2)Bridging the digital divide; 3) Human resourcedevelopment; and 4) Good governance. The pillarsin turn are dependent on four foundations to ensuresuccess: 1) National information infrastructure; 2)Legal framework and institutional strengthening;3) Private sector and community participation; and4) Public awareness creation.

The draft policy envisions the following strategiesfor each of the pillars:

Employment creation: using ICT to achieveefficiency and productivity in existing activities andto create new ICT-based employment. In the caseof the latter, this includes the development of newservices in the Maldives traditional economicsectors, fisheries and tourism such as portals andinformation systems. It also calls for the creationof a Software Park with incentives to attractinvestors.

Bridging the digital divide: ICT is seen as a tool toreduce gaps between the capital and atolls throughenhanced access to information and the delivery ofelectronic government, education and healthservices. In this regard, the policy calls for universalaccess to the Internet from the atolls at affordableprices.

Human resource development: ICT is important fordelivering education as well as a subject in its ownright. The policy identifies the use of ICT for trainingboth those in the formal educational system as well asthose outside it. Strategies include incorporating greateruse of ICT in school curriculum, creating an ICT-basedinstitute of higher education and expanding the use ofdistance education.

Good governance: ICT can improve governmentefficiency and transparency. The policy calls for thecreation of a government network linking all agencies,access points for the public and the delivery of onlineservices.

The policy mentions a number of areas forstrengthening the foundations for successfulimplementation of ICT. In the area of nationalinfrastructure, it advocates an integrated network withmultiple uses in order to reduce duplication. Regardingthe legal framework and institutional strengthening,the draft policy calls for the passage of necessarylaws such as an electronic transaction act and thecreation of new ICT agencies and chief informationofficers. The draft policy notes that in the area ofprivate sector and community participation theinvolvement of business and those living in atolls arecritical. The policy also calls for high-level initiativesto raise awareness such as a National ICT Year.

The draft policy has a timetable of 2010 for achievingits objectives and includes a number of indicators formeasuring goals. The latter include indicators suchas the percentage of new economy generated by ICT,percentage of knowledge workers and ICT indices.

31

manufacturing. Dhiraagu dividendpayments to the government account for6.5 per cent of government non-taxrevenue. Telecommunications alsoaccounts for the third highest (non-tourist) stock of foreign direct investmentvalued at US$ 16.3 million at March 2002.There have also been foreign investmentsby India and Sri Lanka in the computersoftware sector.

Though the precise impact of ICT on theeconomy is difficult to measure, there isanecdotal evidence to suggest it issignificant. For example, tourism, one ofthe pillars of the Maldives economy, ishighly dependent on ICTs for marketing(web sites) and communications(telephone, fax and email reservationsand communications by tourists,Box 7.2).5 The government, whichaccounts for 12 per cent of the economy,is engaged in an US$ 12 millione-government project that will utilize ICTto enhance administration.

7.2 Employment impact

Another aspect of a country�sevolution to an information society is

Box 7.2: Tourism and telecommunications: A marriage made in heaven

There is a symbiotic relationship between two ofthe largest sectors of the Maldivian economy,tourism and telecommunications. They both dependon each other and neither could be as successfulalone. It is unlikely that the tourist industry couldhave blossomed as much as it has without aneffective telecommunication network. The start ofinternational telephone service in the Maldives canbe traced to the beginning of tourism in 1972.6 Itis also unlikely that Dhiraagu, the national operator,could have expanded the telecommunicationnetwork without revenues from tourism. A commonmyth is that most phone lines are in tourist hotelrooms. In fact, only three per cent of telephonelines are in resorts in the Maldives. Nonetheless,all of Maldives 87 resorts have telephone serviceand are an important user of Dhiraagu�s services.An analysis of Supply and Use Tables of theMaldivian economy reveal that the biggest user oftelecommunication services is tourism, consuming26 per cent of telecommunication sector output.7

The Maldives� relatively high level of internationaltelephone traffic is also a result of tourism. Five ofits top ten calling countries are those from whichthe Maldives receives the largest number of tourists

(UK, Italy, Germany, Japan and Switzerland).International mobile roaming has also been a boonto Dhiraagu. Although roaming was only launchedin 2000, it already accounts for the majority ofmobile revenue. This is not surprising given highroaming charges; a roamer can pay up to six timesmore than a local subscriber for telephone calls.One factor that helps is that almost 80 per cent ofMaldives tourists hail from Europe where GSM, thesystem used in the Maldives, is the de factostandard. Dhiraagu has roaming agreements with80 operators in 44 countries.8

Understanding the link between telecommunicationsand tourism is important for other small island states,many of which are keen to promote tourism. Goodtelecommunications is important for attracting anddeveloping the tourism industry. Tourists make a highlevel of international calls and seem willing to pay ahigh price. They can be an important source ofrevenue helping to keep prices lower for local servicesand thus helping to expand national access. Thetourism industry need for telecommunication isevolving beyond just international calls to include e-mail, web sites and international roaming. Supportfor these services can help boost local employment.

the need for ICT workers, which canhelp reduce unemployment. This isparticularly important in the Maldivesthat has a growing pool of educatedyoung people. Figures on overallemployment in the ICT sector are notavailable. Dhiraagu directly employs520 people as well as having anindirect impact on employmentthrough areas such as vendors ofmobile phones and pre-paid cards.

7.3 Social impact

Another perspective on theinformation society is how the use ofelectronic information is transformingcitizen�s lives. Access to ICT isincreasing. In the year 2000, 57 percent of homes had a television while23 per cent had a telephone line andsix per cent had a PC.

One limitation in gauging the socialimpact of ICT is a lack of data andsurveys to understand how people areusing it. There are certain proxies.One is a growing willingness to useelectronic transactions. For examplethere are some 20�000 debit card


32


holders in Male� using their cards atover 250 restaurants and shops aswell five Automated Teller Machines(ATM).9 The volume of Internet trafficis rising with some 51 million minutesof dial-up use in 2002, an increase of17 per cent over the previous year.However usage is still low at aboutone hour per year per user, suggestinglimited experimentation on theInternet. Text messages sent overmobile phones is rising with anaverage of 11 per subscriber inDecember 2002, up from three at theend of 2001.

Many are still not aware of the benefitsof ICT and there is a significant digitaldivide between Male� and the rest ofthe country (Box 7.3). There are anumber of institutional issues thatneed to be resolved to expand theMaldivian information society such asthe enactment of digital laws and theacceptance of free online governmentforms. There are several projects inthe pipeline to make ICT morerelevant for the population. One is ane-government project that wouldbring public services on-line. Anothereffort is to extend ICT access in the

Box 7.3: ICT in the Atolls

The main digital divide in the Maldives is betweenthe capital Male� and the atolls. According to the 2000Census, overall household telephone penetration was22.9 per cent but that ranged from 68.9 in Male� to8.7 in the atolls. The divide for computers is alsowide with an overall national rate of 6.2 per cent ofhouseholds possessing one compared to 21.9 per centin Male� and 1.3 per cent in the atolls. In November2001, the UNDP, along with the ITU, carried out a

fact finding mission to 21 islands to assess the levelof ICT and get feedback from islanders about ICTrequirements. While virtually all islands hadcomputers, the penetration ranged from over threeper 100 inhabitants to less than one, reflecting anisland digital divide. The input obtained from themission will be useful for a UNDP project to create anatoll portal with content reflecting the needs of thoseliving on the islands.

33

Box 7.3: ICT in the Atolls (cont�d)

Source: ITU Mission Report: Maldives UNDP Project, November 2001.


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atolls and develop locally relevantcontent.

7.4 E-Government

Most ministries are online and canbe accessed from the presidentialweb site that serves as a sort ofinformal portal <http://www.presidencymaldives.gov.mv/v3/pages/LinksList.php3>. Web sitesprovide information about therespective ministry, including publicannouncements, documents,speeches, and vacancies as well ascontact details. Several web sitesallow users to download forms, themain e-citizen application that iscurrently provided.10 The availabilityof government forms online has beenlimited due to the tradition requiringcitizens to pay for them. This hasprevented some government agenciesfrom providing online forms becausethey do not have payment systemsto charge for the forms and if providedfor free, it could be a violation of therule.

7.4.1 Big plans

The Maldives recently launched acomprehensive e-government project.Financed by a US$ 12 million loan fromthe Asian Development Bank (ADB),the wide-ranging InformationTechnology Development Project(ITDP) covers infrastructure andaccess, services and content and ICTpolicies.11 Specifically it includessetting up a network and connectinggovernment agencies in Male� and20 atolls; developing a portal andproviding online services; establishingthe National Computer Center (NCC)to coordinate ICT development, aswell as implementing sector reform.

The government portal will centralizeindividual ministerial efforts to provideonline services by providingintegration and consistency. It willsupport electronic transactionsbetween ministries and the deliveryof government services to the public.To ensure that e-services will not belimited to the population in Male�, theproject envisions a public accessscheme to equip every atoll with anInternet kiosk. Installed at the atoll

office, the kiosk will be staffed byassistants trained to help citizens�access and use the applications.

The initial applications slated fordelivery under the e-governmentproject include:

� National Citizens Identification.This envisages the creation of asingle database containing citizenidentification records to beaccessed by all ministries. Thiswill result in efficiency fromaccessing one central databaserather than maintaining localrecords. The average time savedhas been estimated at15 minutes per record; with anestimated 1.4 million accessesper year, this amounts toconsiderable efficiency. It isenvisaged that the applicationwould be extended to citizensallowing them to update theirrecords and obtain relevantinformation remotely.

� Hospital Information System.This component forsees thecreation of a medical recordsdatabase with real-time accessby health staff. It is estimatedthat productivity will be raised by25 per cent for doctors and upto 90 per cent for other staff byhaving patient informationavailable online.

� Vessel, Vehicle, and AircraftRegistration. This service willallow property owners to registeror renew their applicationsonline. This will cut downsubstantially on trips to carry outthese activities with an estimatedsavings in the number of trips of15 per cent in the initial phaseof the project and rising to 70 percent.

The conceptual phase of thee-government project has beencompleted and the government invitedbids in November 2003 fordevelopment of the two maincomponents: Government Network ofMaldives and the InformationTechnology Architecture. The network

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component involves linking ministriesin Male� and 23 islands using fibreoptic in the capital and a satellitesystem for the islands. TheInformation Technology Architecturedeals with the software aspectsincluding the development of initiale-citizen applications.

7.4.2 Atoll portalApart from the ITDP, there is also aUNDP project �Digitally EmpoweredDevelopment in the IslandCommunities of Maldives.�12 Thisproject envisions the creation of acommunity portal that would providerelevant information to and aboutislands in both Dhivehi and English.The idea is that local communitieswould provide content such as islandprofiles, travel information, discussionboards and employment and businessopportunities.

7.5 Education

7.5.1 Enrolment and attainment

A significant determinant of a country�sability to transition to an informationsociety is its knowledge base. Indicatorssuch as school enrolment andeducational attainment help determinethe potential for ICT use.

Primary and secondary schoolenrolment are high and reflectgovernment efforts to provide basiceducation, at least until the age of 15.Government spending on educationamounted to 18 per cent of allexpenditures in 2002. The Maldivesranks well when compared to otherdeveloping countries with 96 per centof youth between the ages of 6-15attending school. There is also very littlegender disparity in education (Box 7.4).

There is almost universal literacy(97 per cent) in a population dispersedover 200 islands. Literacy wasincreased through a governmentproject providing basic reading andwriting courses to adults across thecountry.

In terms of educational attainment,there is a gap between secondaryschool attainment and the post-secondary level reflecting limitedtertiary opportunities. While around45 percent of the population hasattended middle school, less than onepercent of the population has atertiary degree. The 2000 Censusfurther reveals the difference ineducational attainment between Male�and the atolls. While 37 percent ofthose living in Male� have at least asecondary education, the numberstands at 15 percent for those livingin the atolls. Two percent of thepopulation in Male� has a tertiarydegree, compared to 0.2 percentresiding outside Male�.

There is a strong link betweeneducation and Internet access. This isdrawn out in numerous surveys thatshow that those in school or with highlevels of education have more elevatedInternet usage rates than others. Inthe case of the Maldives, it would appearthat there is a large untapped Internetmarket. According to Dhiraaguestimates there were some 15�000Internet users at the end of 2002. Thisfigure is less than the number of peopleaged 15-19 attending school (21�101according to the 2000 Census). Inaddition, there are another32�625 people aged 15-59 who have atleast a secondary education. These twogroups, prime Internet users, equal53�726 people. Thus there is a gap of38�726 between those currently usingthe Internet and those who probablyhave the skills or can be taught fairlyquickly how to use it. There is alsooften a close relation betweennewspaper circulation and Internetusers. The country�s leadingnewspaper claims a daily circulation of86�000. The difference between thisgroup and the existing number ofInternet users is 71�100. Thus thepotential Internet market is betweenthree to five times larger than currentestimates of the number of users(Figure 7.3). On the other hand, thenumber of Internet users may beunderestimated.


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Box 7.4: ICT potential for women

The Maldives is progressive in gender issues. Therights of women are constitutionally protected andthere is a Ministry of Women�s Affairs. The countryscores high compared to peer countries onindicators measuring female participation ineducation. Educational enrolment and attainmentfigures for the Maldives show slight gender-relateddifferences. However after the age of 20, there is asmall drop off in female school attendance. Oneissue is that most post-secondary educationalopportunities are in Male�. Families in the atolls aremore reluctant to send females off to study in thecapital. Females also tend to get married earlier thanmen. Household duties and the arrival of babies makeit more difficult for women to purse educationalopportunities.13 A positive trend is that the age ofmarriage has been rising, giving women moreopportunity for education (Box Figure 7.4, right).

The participation of women in the formal labourmarket is much lower than men. While 72 per cent

of men over the age of 15 works, the correspondingfigure for women is only 37 per cent. Similar topost-secondary education, marriage and childrenaffect the ability of women to work. The diffusionof Information and Communication Technology(ICT) could have a big impact on female labourparticipation in the Maldives. If ICT access can beprovided in homes, then it would give more womenthe ability to participate in new economy activities.Since the younger generation of women almost allcomplete mandatory schooling they have a goodstarting background for using ICT. The availabilityof online government applications can also makewomen less dependent on men for obtaining publicservices, enhancing their empowerment. 14 Thereis also scope for women to operate atoll Internetkiosks as part of the Women CommunityAssociations. In a report on gender in the Maldives,the Asian Development Bank has also emphasizedthe potential of information technology for boostingfemale employment.15

Box Figure 7.4: Gender in the Maldives

Source: ITU adapted from Ministry of Planning and National Development.

Percentage of population attending school, by age and sex (left) andmean age at marriage, by location and sex (right)

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7.5.2 ICT education in schools

The Sixth National DevelopmentPlan16, which defines governmentpolicies for the period 2001-2005,highlights the need to expand andpromote ICT in education, includingcomputer literacy.

The Ministry of Education�s draftInformation Technology andEducation, Policy and Strategies,recognizes �the promise of IT foreducation for all� and the need tomove from �natural-resource-basedprimary products, towardsknowledge-based and human-resource intensive goods andservices�.17 The draft discusses ways

of teaching IT in schools and tertiaryinstitutions as well as using IT as atool to improve educationalinstitutions by making them moreefficient und improvingcommunication. A number of goals areaimed at turning the Maldives into aknowledge-based economy. Theseinclude making all secondary schoolleavers computer literate, expandingcomputer studies to the lowersecondary level, training a cadre ofspecialist IT teachers, establishing aschool network to share educationalresources and making greater use ofdistance education. The draft sets anumber of objectives for the years2001-2005, such as providing allschools with a computer, providing allteachers with email, teaching studentsIT two hours per week and providingInternet access to all schools. Ashortage of funding and skilledteachers has been the main problemsin realizing the objectives.

ICT courses were introduced insecondary schools as early as 1986,but limited to a small number ofstudents. Today ICT classes areprovided in all higher secondaryschools. The importance that policymakers attach to ICT is demonstratedthrough a presidential decree,stipulating that from 2004 everysecondary school graduate must becomputer literate. There are plans tointegrate ICT into the primary schoolcurriculum but a lack of trainedteachers is a barrier. One way aroundthis has been outsourcing training tothe private sector.

An Internet culture has spread amongstudents, particularly in the capital.Most teenagers in Male� have basiccomputer skills and know how to usethe Internet, although schools may notbe their main access location. Someattend classes at one of the some dozenprivate computer training centres.Others learn at local Internet cafés.Dhiraagu also offers free Internetcourses to school classes (Box 7.3). Inthe atolls, parents have purchasedcomputers for some schools and in afew cases paid for private companiesto provide training.18

Figure 7.3: Maldives untapped Internet market

Difference between potential and actual Internet users

Note: The chart shows the gap between the estimatednumber of Internet users in 2002 and those believed to havethe ability to use the Internet (age 15+ attending school,those with at least a secondary school education and thosewho read a newspaper). For example the difference betweenestimated Internet users (15�000) and those who read anewspaper every day (86�000) is 71�000.Source: ITU adapted from Dhiraagu Internet user estimate,Ministry of Planning and National Development and Haveruunewspaper.


38


Box 7.5: Increasing awareness and attracting new customers

Dhiraagu has been utilizing off-peak times at itsInternet café to increase awareness among theyoung. Since 2002, it has provided free Internetcourses to school classes. In October 2003 theinitiative was extended to five classes per week atits Male� cyber café19 , the largest in the capital.

Students between the ages of 10-14 are invitedduring so-called �happy hours�, times when thereare relatively few other customers. The Internetcafé staff use the one-hour course to show studentshow to access web sites and find educationalmaterial.

In addition to access to Internet cafes,another advantage students in Male�have is that their language ofinstruction is English, both in primaryand in secondary schools. Althoughthis is officially the case nation-wide,primary students in the atolls are mostoften taught in Dhivehi, the locallanguage. English is taught simply asa subject, and students from the atollsoften find it difficult to switch toEnglish when they commencesecondary school.

7.5.3 ICT workforce

Post-secondary education is providedby the Maldives College of HigherEducation (MCHE, <www.mche.edu.mv>), established in 1998through an Asian Development Bankproject. The MCHE was created as anumbrella organization to consolidateand manage seven existing andlargely independent post-secondaryeducational institutions.

The Sixth National Development Planforesees the eventual transformationof the Maldives College of HigherEducation into a university. TheCollege has six faculties and twoCentres. While the fields of tourism,health, education and engineeringprovide the greatest number ofcourses, most are one-year or lesscertificate courses. A bachelor�s degreeis offered in tourism, management andeducation while the Faculty of Tourismoffers a Master�s degree. The degreesare offered in cooperation with foreignuniversities and include study abroad.Over 6�800 students are currentlyenrolled at the MCHE, of which some4�000 are part-time.

Every student enrolled in the collegehas to take a course to become

computer literate. Precise skills areoutlined covering hardware, dataprocessing, operating systems, wordprocessing and spreadsheets. Theestimated teaching time to becomecomputer literate is 16.5 hours. Apartfrom these skills, a computer literatestudent is also expected to have acertain attitude towards using theknowledge. This attitude includeshaving �a desire for self-learning, awillingness to seek information anduse that information, and a positiveinclination towards fast desirablechanges, reskilling and technology.�

According to the results of aquestionnaire filled out by studentsand academic staff, the main barriersfor using ICT is the lack of availableresources. Twenty percent, forexample, said it was difficult orimpossible to find a computer most ofthe time. The main reason studentsand staff do not use the Internet isnot because of the lack of skills butbecause of non-availability. Whilemost staff said they had basic ICTskills, they lacked more advancedtraining. Seventy-seven percentfurther noted that they had no helpdesk to turn to for assistance andmany depended on a �learning bydoing� method.

The Faculty of Management andComputing (FMC) offers diploma andcertificate programmes in InformationTechnology as well as a bachelordegree in Business InformationSystems in conjunction with a UKuniversity.20 FMC will host a CISCONetworking Academy Program underthe ITU / CISCO Internet TrainingCentres Initiative for DevelopingCountries.21 Two MCHE staff attendedCISCO instructors training at MCHE�s

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parent academy in Hyderabad, Indiain September 2003. The parentacademy trains the instructors of localacademies and gives them technicalsupport.

The College, which has over 300 staff,is under the Office of the President,rather than the Ministry of Education.Its 2002-2004 Information TechnologyStrategic Plan outlines the current ICTsituation and defines the college�sobjectives for the coming years. Thegoals laid out in the Strategic Planinclude the integration of technologyinto all aspects of teaching, learning,and research; the improvement of thenetwork infrastructure and thecoordination of IT resources; the useof technology to improve access toinformation and user support services;and the enhancement of managementand administration through the use ofICT. Each goal has specific strategies,including concrete actions andquantitative targets.

Dhiraagu, the telecommunicationoperator, has an in-house trainingprogramme, providing its employeeswith required ICT skills. Dhiraagu�s partowner, Cable & Wireless of the UK, hasplayed an important role and manyemployees have been sent abroad toreceive specialized training. Dhiraagu

has been discussing the possibility ofjointly establishing a two-year coursein telecommunication engineering withMCHE. One bottleneck is the cost ofequipment for the course thatDhiraagu would have to purchase.

Since tertiary education options in theMaldives are limited, the nation relieson foreign education institutions.Between 1998 and 2003, thegovernment sent some 1�500 studentsabroad on scholarships. Topdestinations include Malaysia, India,Sri Lanka, Australia and the UnitedKingdom. Most scholarships arefunded by development assistance.The majority of students studying ITabroad obtained diplomas or bachelordegrees with only a few doing post-graduate work (Figure 7.4). Inaddition many more Maldivians studyabroad without government funding.In 2003 some 500 students wereregistered with the Ministry ofEducation as studying abroad butsince students are not obliged toregister, the number is estimated tobe at least twice this high.

The Maldives is not as affected bybrain drain as other developingcountries. Despite the fact thatstudents are free to chose where towork after their scholarship ends, anddo not have to pay back grants, it is

estimated that 99 percent returnhome. One of the reasons might bethat few students obtain post-graduate degrees, which areparticularly high in demand on theinternational job market. It alsomeans that the amount of time spentabroad is limited and students haveless time to become accustomed toa new country and culture.

ICT training by the private sector iswidely available in the capital, andprovided by some 15 centres.Participants can obtain certificatesand diplomas. These take betweenone and three years respectively. Toensure quality the MaldivesAccreditation Board certifies ITcourses provided by the privatesector. At November 2003, it hadapproved some thirty ICT coursesfrom five training centres (Table 7.1).

Figure 7.4: Going abroad for higher education

Difference between potential and actual Internet users

Source: Maldives Ministry of Human Resources, Employment andLabour.


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Table 7.1: Private sector ICT courses

Maldives Accreditation Board approved ICT courses, November 2003

Source: Maldives Accreditation Board.

Comtronics Training Centre

Advanced Course in Architectural Drawing with Auto Cad Advanced Certificate

Basic Course in Computer Application Cert 1

Certificate Course in Computer Application Cert 2

Advanced Computer Course in Office Management Cert 3

Certificate Course in Web Designing and Hosting Cert 3

Cyryx Computer Training Centre

Advanced Certificate in Information Technology Advanced Certificate

Certificate 1 in Information Technology Cert 1



Diploma in Information Technology Diploma

Focus Education Centre

Certificate in Office Application Cert 1

Certificate in Basic Office Management Cert 1

Foundation Course in Computing Cert 1

Certificate of Secretariat Skills Cert 2

Certificate in PC Competence Cert 2

Certificate 2 in Microsoft Office Management Cert 2

Advanced Certificate in Computer Studies Advanced Certificate

Diploma in ICT System Support Diploma

International Business Systems Overseas (IBS)

PC networking using Microsoft Windows 2000 Cert 1

Graphic Specialist Course Cert 1

PC Troubleshooting and Configuration Cert 1

Certificate 2 in Microsoft Office Cert 2

Mandhu Learning Centre (MLC)

First Certificate in Information Technology Cert 1

Advanced Certificate in Information Technology Advanced Certificate

Diploma in Mathematics and Information Technology Diploma

Diploma in Information Technology Diploma

Win Information Technology Training Centre

Certificate 1 in Computer Application Cert 1

Certificate 2 in Microsoft Office Cert 2

Certificate 3 in Microsoft Office management Cert 3

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Given the shortage of local labour, theMaldivian economy is dependent onexpatriate workers. In May 2003 therewere a total of 32�241 foreignersworking in the Maldives. Thisrepresents more than 30 percent ofthe total workforce, which stood atabout 88�000 according to the2000 census. The greatest number ofexpatriates was found in business(3�987), education (2�642), and hotelsand restaurants (2�074).

A breakdown of the type of workforeigners are performing, such asICT, is not available. This is also notavailable for the economy as whole.The entire area of ICT workforcestatistics and their relation to trainingis lacking. This makes it difficult toplan ICT training and evaluate theimpact of ICT on employment. In thatrespect it would be extremely usefulto compile a database of the existingICT workforce, those receiving trainingin ICT and carry out an analysis offuture needs.

7.5.4 The public at large

The draft Information Technologyreport by the Ministry of Educationcalls for ICT courses for the generalpublic since there have not yet beensignificant government initiatives inthis area. Dhiraagu has severalinitiatives to promote the Internet tothe public at large. It organizesInternet fairs where free introductory

Internet courses are provided. Localcompanies use these fairs to presentand demonstrate new hardware andsoftware products. Dhiraagu alsoorganizes web design competitionswith the winners receiving prizes suchas PCs or mobile phones.22 Thewinning sites were hosted for free forone year. Dhiraagu also organizesseminars for the government as wellas the private sector. These sessionsfeature representatives from Dhiraaguwho make presentations on howpeople can use the Internet. Thepresentations, which are given forfree, have been provided to almost tenministries.

Those with a secondary educationhave a relatively good grasp of Englishsince it is the language of instructionin secondary schools. People with onlyprimary education, on the other hand,will most likely have limited Englishlanguage skills and thus find it difficultto use the Internet.23 The officiallanguage of the Maldives, Dhivehi,uses a unique, Arabic influenced scriptcalled Thaana. The Maldives InternetTask Force (MITF, at www.mitf.net)and others have been promoting theuse of Dhivehi and Thaana inelectronic format. Thaana has nowbeen added to the Unicode Standard,used for representation of text forcomputer processing. Maldivians arenow able to type and read documentsin Dhivehi, as well as create and usewebsites based on Thaana.


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1The World Summit of the Information Society describes the information society as an environment ��whereeveryone can create, access, utilize and share information and knowledge, enabling individuals, communitiesand peoples to achieve their full potential in promoting their sustainable development and improving theirquality of life.� See WSIS Declaration of Principles athttp://www.itu.int/dms_pub/itu-s/md/03/wsis/doc/S03-WSIS-DOC-0004!!MSW-E.doc.[Accessed 8 February 2004].

2President Maumoon Abdul Gayoom. �Address on the Occasion of the 34th Anniversary of Independence Day.�26 July 1999. http://www.presidencymaldives.gov.mv/v3/pages/body.phtml?ID=30&Table=Head3&PTID=30.

3Ministry of Planning and National Development. Sixth National Development Plan 2001-2005. 2002.

4Ministry of Communication, Science and Technology. e-Maldives: The Republic of Maldives NationalInformation and Communications Technology Policy. Draft. 2003.

5Searches on the phrases �Maldives tourism� and �Maldives hotels� using the Google search engine returned112�000 and 398�000 hits respectively. [Search executed on 12 June 2003].

6�The tourism industry of the Maldives was introduced in 1972 and this boosted the demand for moresophisticated international telecommunication services. As a result of rapidly-growing demand for both localand international telephone services, the first automatic exchange with the capacity of 300 lines wasinstalled in the capital Male� in 1976. In the following year, the first Earth Station (NEC Standard B) cameinto operation allowing the general public to have access to International Telecommunications services forthe first time.� See �History� on the Dhiraagu web site at www.dhiraagu.com.mv/about_us/history.php.

7This is based on the 1997 Supply and Use tables, the latest year for which data is available. Total use of postand telecommunications services was Rf 579.99 million of which resorts consumed Rf 151.45 million. See theSupply and Use Tables included in the 2003 Maldives Statistical Yearbook athttp://www.planning.gov.mv/yrb2003/YearBook/allFrames.htm. [Accessed 8 February 2004].

8One issue that Dhiraagu hopes to address is roaming for Japanese and Republic of Korea visitors. These twocountries account for over ten per cent of tourists but do not use the GSM system so their mobiles will notwork in the Maldives.

9Information on credit card holders, point of sale outlets and the number of ATMs is from the Bank ofMaldives http://www.bankofmaldives.com.mv [Accessed 8 February 2004].

10At the Ministry of Transport and Civil Aviation web site http://www.transport.gov.mv, for example, users candownload the vehicle and vessel registration form. At the Ministry of Youth and Sports web sitehttp://www.youthsports.gov.mv/application/application1a.htm applications for joining a Youth Centre can besubmitted online and the Department of Immigration and Emigrationhttp://www.immigration.gov.mv/forms/index.htm has made different forms available online, including theapplication for a passport.

11Asian Development Bank. �Helping Islanders Access Public Services Through The Internet In Maldives.� NewsRelease. 17 December 2001. http://www.adb.org/Documents/News/2001/nr2001197.asp.

12UNDP. �Digitally Empowered Development in the Island Communities of Maldives.�

13�But perhaps the more compelling reason for the lower educational status of women is the culturalexpectation for women to marry at a young age�Having done so, it becomes difficult for them to continuetheir studies and more so when they start having babies�� Ministry of Planning and National Development.2002. Analytical Report. Population and Housing Census of the Maldives 2000.

14�Further, their traditional dependence and reliance on men to help them obtain public services will give wayto independence and self-reliance as they can directly access public services�In this way it is highly likelythat the provision of public services through the Internet, and the overall improvement in communicationswill provide greater incentives for women to participate in economic activities and enhance their socialposition.� Asian Development Bank. November 2001. Report and Recommendation of the President to theBoard of Directors on a proposed loan to the Republic of Maldives for the Information TechnologyDevelopment Project.

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15Asian Development Bank. April 2001. Women in the Republic of Maldives. Country Briefing Paper.http://www.adb.org/Documents/Books/Country_Briefing_Papers/Women_in_Maldives/default.asp?p=gender.

16Ministry of Planning and National Development. Sixth National Development Plan 2001-2005.http://www.mv.undp.org/docs/6NHDR/index.htm.

17Ministry of Education. March 2001. Information Technology and Education, Policy and Strategies. Draft. Isthis the latest version? Has it been published yet?

18Ministry of Communication, Science and Technology. April 2001. Republic of Maldives Science andTechnology Master Plan. http://www.mcst.gov.mv/Documents/mplan.htm. [Accessed 4 February 2004].

19The Dhiraagu Cyber Café was the first in the Maldives when it began operations in mid-1998. It has a256 kbps dedicated leased line and 24 recent model PCs. Trained assistants are available to assist users toset up an email account or help out with other questions. See the website at http://www.cybercafe.com.mv.[Accessed 4 February 2004].

20For information on program, see the description at the Middlesex University web site:http://www.mdx.ac.uk/subjects/cit/bis.htm. [Accessed 4 February 2004].

21CISCO. 2 December 2002. �Cisco and ITU Narrow Gap in Internet and New Economy Skills Worldwide:Internet Training Centers Initiative for Developing Countries helps bridge digital and gender divides.� PressRelease. http://newsroom.cisco.com/dlls/ts_120202.html. [Accessed 4 February 2004].

22http://www.dhiraagu.com.mv/newsdesk/index.php?newsid=108.

23Apart from the primary schools in the capital, the dominant language of instruction in primary schools isDhivehi.


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8. Conclusions

8.1 A successful SIDS

The Maldives faces greaterconstraints that even most smallislands: it is a Least DevelopedCountry (LDC), has a smal lpopulation of less than 300�000 andconsists of 199 inhabited islandsspanning 820 kilometres from northto south. Despite these economic,demographic and geographicchallenges, the Maldives was able toprovide access to telephone serviceto all of its inhabitants by the year1999. This was accompl ishedthrough a compact between thegovernment and the pr ivatetelecommunication operator.1

Despite this impressive achievementthe Maldives cannot afford to rest onits laurels. It needs to evolve to a newstage that fully seizes the benefits ofInformation and CommunicationTechnology (ICT) for development.This includes moving from universalaccess to universal service and widelydiffusing newer ICT such as theInternet, particularly in underservedareas.

One concern is that the Maldives isnot fully exploiting the potential of ICTfor delivering services to remote,dispersed locations. While there is atelemedicine project, benefits havenot thus far been widespread.Distance education, beset by concernsabout the quality of learning, has notbeen fully exploited.

The issue of injecting additionalliberalization in the telecommunicationsector is complex. Dhiraagu hasserved the nation well. It installed thebackbone network under difficultgeographical conditions allowing thenation to achieve universal access.The fixed, mobile and Internetnetworks are reliable. Fixed telephonetariffs for most consumers arereasonable. Though mobile tariffs are

relatively high, they do not seem tohave been a deterrent to uptake.Internet pricing is partly a result ofhigh international connectivity coststhat the Maldives pays and shoulddrop with the newly licensed ISP.Further l iberal izat ion raisesquestions about feasibility given thepopulation dispersion of the country.Without adequate regulation, thedigital divide could widen as investorsfocus on the more populated islands.For liberalization to work, regulatoryskills will need to be deepened to dealwith a multi-operator market.Additional competition may also leadto a rebalancing of tariffs. Localtelephone service prices would riseand possibly create concerns aboutaffordability.

Another challenge is the need forgreater broadband use to bring theMaldives more fully into theinformation age. The existing nationalbackbone�mainly microwave links�was not designed with high-speeddata transmission in mind. Thenetwork needs to be upgraded or anoverlay needs to be installed. Optionswould include fibre optic cable andVery Small Aperture Terminal (VSAT)satellite technology. On the one handfibre is an obvious solution at leastfor compact Male� and possibly forconnecting atolls by using festooningto interlink islands. There is no needfor the construction of towers but theocean depths between atolls, the largespread of the country and price of fibreitself could be costly. AlternativelyVSAT technology solutions could beexplored. The option of connecting toan undersea fibre optic cable forinternational connectivity should alsobe more deeply investigated. Thoughinitial inquires have been made, andthe costs appear high, this should bere-examined in the context of widerbenefits. Options for sharing the costof the connection and possiblyobtaining financing assistance should

45

be explored. The government shouldfully leverage various options andencourage different parties tocollaborate and not duplicateinfrastructure unless absolutelynecessary.

8.2 Assessing the Maldives

As noted throughout this report, theMaldives has made exemplaryprogress in expandingtelecommunication access to itscitizens. How does the Maldivescompare internationally and howready is it to make use of the benefitsfrom ICT? In terms of overallinfrastructure�fixed and mobiletelephones�the Maldives� rank hasrisen by 30 positions (from 133 to 93)over the last quarter century. Whilethe country�s telephone density was22 times less than the world averagein 1970, this gap had been reducedto just one and half times by 2002(Figure 8.1, left). The Maldives has thehighest telephone subscribers percapita in South Asia as well as amongthe LDCs (Figure 8.1, right). It is ontarget to catch up with middle-incomecountries in terms of telephonepenetration fulfilling one aspect of itsaspiration of Vision 2020 to become amiddle-income developing nation.

Figure 8.1: Catching up

Telephone subscribers per 100 inhabitants, 1970-2002, world average and Maldives (left) and telephonesubscribers per 100 inhabitants, 2002, Maldives and various regional and economic group averages (right)

Source: ITU World Telecommunication Indicator database.

4.76.0

7.310.1

13.9

32.7

36.9

0.2 0.5 0.7 1.2

5.78.5

25

17

2.9

3.5

7

2.4

1012

22

1.52

1970 1975 1980 1985 1990 1995 2001 2002

World

Maldives

Telephone subscribers (fixed+mobile) per

100 inhabitants

World / Maldives

1.7

4.6

22.3

25.11

32.4

36.9

LDC

South Asia

Developing

Maldives

Middle income

World

Telephone subscribers (fixed+mobile) per

100 inhabitants, 2002

The ITU launched the Digital AccessIndex (DAI) in November 2003 as anew way of measuring the ability ofnations to provide access to ICT.2 TheDAI is based on four factors that havean impact on access: infrastructure(fixed and mobile telephonesubscribers), affordability (Internetaccess costs), knowledge (literacy andschool enrolment) and quality(international Internet bandwidth andbroadband subscribers). A fifth factor,Internet user penetration, matches thetheory of the index with actual usage.The Maldives ranked 92nd out of178 countries and was the highest-ranking LDC and South Asian nation(Figure 8.2, left).3 Its overall score of0.43 places Maldives in the mediumaccess category. It is useful to comparehow Maldives fares in the various factorsto see its strengths and weaknesses.In terms of infrastructure it matchesthe medium access category averagewhile knowledge, quality and usage areabove the average. The area it doesless well is in affordability (Figure 8.2,right). When compared to the top-ranking medium access countries, theMaldives needs to raise its level ofinfrastructure and lower its costs. Thecountry should aim for the goal ofmoving into the next category, highaccess (DAI value above 0.49).

8. Conclusions

46


Figure 8.2: Maldives in the DAI

Maldives Digital Access Index values compared to South Asia (left) andMedium access category average (right)

Source: ITU.

The ITU has been using a frameworkdeveloped by the Mosaic Group togauge the e-readiness of nations.4

That framework has been applied tothe Maldives (Box 8.1). Maldives ranksin the mid-range of countries thathave been studied. It performs wellin terms of overall penetration andabsorption of ICT in different sectorsof the economy. It does less well inspread of ICT�particularly to theatolls�and organizationalinfrastructure�with a relatively closedtelecommunication market. These areareas that the nation needs to workon to improve its e-readiness ability.

It is also useful to carry out aStrengths, Weakness, Opportunitiesand Threats (SWOT) analysisparticularly as they relate to thedevelopment of the ICT sector. TheMaldives has a number of strengths.Widespread use of English gives it anadvantage in the ICT area where somuch content and software is in thatlanguage. Another positive attributeis the Maldives sense of unitysimplifying consensus on nationalgoals and strategies. Goodgovernance is another plus with thepublic administration scoring well interms of transparency and efficiencycompared to other developing

nations.5 Universal access totelecommunications is also a strongpoint. The Maldives location can be aplus particularly in attracting ICTbusinesses that are looking forsecurity and distance from the world�sproblems.

The country also has severalweaknesses. While the Maldives� smallsize and geography can be strengthsthey are also the source of most of itsweaknesses. For example thecountry�s small population base worksagainst the establishment of auniversity, constraining highereducational opportunities. This isparticularly important since thedevelopment of an ICT industryrequires advanced skills. Anotherweakness is the lack of broadbandcapability in the national backbone.This inhibits the atolls from fullyparticipating in the information societyby restricting the functionality ofapplications such as telemedicine anddistance education. The lack of a fibreoptic connection for internationalInternet bandwidth is also a limitationsince the quality and pricing of satelliteconnection is less favourable.

It is important to be realistic aboute-opportunities particularly

47

8. Conclusions

Box 8.1: State of the Internet in Maldives

The International Telecommunication Union (ITU)has been using a framework to analyze thedevelopment of the Internet in different nations.Developed by the Mosaic group, the frameworkconsists of values for six different elements thathave an impact on Internet take-up.8 Values rangefrom 0 to 4; the higher the value, the better.

Pervasiveness measures the overall access rateto the Internet. Maldives is rated common, 3, asthe estimated penetration rate is 5.3 per cent ofthe population (above the one per cent to reachthe common level).

Dispersion measures the geographical spread ofInternet access. All inhabited islands in the Maldiveshave telephone service. Although Internet accessis theoretically available wherever there is atelephone line at a standard nationwide fee, inreality the line would need a PC. On some of theislands, there are only payphones with no PCattached. Public Internet access is available on some55 islands. Dispersion in the Maldives is rated 2,moderate, with Internet access available fromapproximately 25 � 33 per cent of inhabited islands.

Absorption measures the extent to which differentsectors of the economy are using the Internet.Maldives is rated 3, common. Virtually allgovernment agencies have Internet access, as dosecondary schools. Large companies and sectorssuch as tourism and banking have Internet access.The Ministry of Health has a Local Area Networkand two hospitals are involved in telemedicineproject.

Infrastructure measures the extent and speedsof backbone and local access networks. Maldives is

rated 2, expanded. Maldives has a well-developedtelephone network and has introduced broadbandaccess. However, the predominant method of accessto the Internet is still via low-speed, dial-up; thereis no national data backbone and internationalInternet connectivity is via satellite rather than fibre.

Organization measures market conditions.Maldives is rated 2, controlled. The Internet markethas been a monopoly. A second ISP license wasissued in 2003.

Sophistication measures how usage ranges fromconventional to highly sophisticated. Maldives israted 2, conventional. The most popular Internetapplications appear to be surfing and e-mail Theusage of more advanced applications such as mediastreaming, online banking, e-commercetransactions and government interaction are stilldeveloping.

The ITU has carried out evaluations for 19economies since January 2000. One way ofcomparing economies is to sum the scores of eachelement. The highest ranked economy thus far isHong Kong, China with an overall score of 22.5(out of a possible maximum of 24). The Maldivesranks eighth out of the 19 economies with a scoreof 15. One benefit of the Mosaic framework is thatit highlights which areas a country need to improveto enhance its Internet diffusion. In the case ofMaldives, this would be dispersion andorganizational, areas where it is below the averageof the 19 countries evaluated. In the case ofdispersion, there is a need to expand Internetaccess in the atolls. In the case of organizational,Maldives has recently awarded a second ISP licenseand it is too soon to see the impact.

Figure 8.2: State of Internet in the Maldives

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

48


considering the Maldives� constraintsin terms of small population andlimited post-secondary trainingfacilities. However there are certainniche areas worth exploring. One ise-tourism or the application of ICT totourist services. The country alreadyhas a significant tourism industry.Tourism is an information intensivebusiness with the need to providedetails to consumers as well asprocess reservation requests. TheMaldives could leverage its largetourism industry to become a leaderin e-tourism applications.6 Anotheropportunity is India given the Maldiveshistorical relations, business ties andgeographical proximity. India has thedeveloping world�s largest export-oriented software developmentindustry and hence much expertise inICT. India has been sharing itsexpertise with the Maldives and iswilling to extend it further. The IndianPrime Minister notes, �Ourcooperation in human resourcedevelopment spans an entire range -from defence to hospitality, frommedicine to information technology.We will further widen and intensify thisrange. We have also discussed some

new ideas - for an IT village, for theecological preservation of Hulhumale,for digital mapping of your islands, fora telemedicine link and for a remotesensing centre. These lay downmarkers for our future endeavours.�7

The Maldives is moving in the rightdirection and has a number of ICTplans and projects. One danger is theycould stall due to a lack ofcommitment or resources. The loss ofLDC status is a serious threat sincemany of the nation�s projects in ICThave been with the assistance of theinternational developmentcommunity. This is in some ways tiedto another threat, that ofmarginalization. The Maldives is asmall country and at times may seemirrelevant to the global community.This can have a negative impact interms of raising support andawareness for issues that areimportant to the Maldives. This all themore reason to embrace ICT as adevelopment enabler particularly sinceit also ties in with the currentemphasis of the internationalcommunity. In any case, the Maldiveshas few other alternatives for

Table 8.1: Maldives SWOT

Strengths, Weaknesses, Opportunities and Threats

Strengths

Widespread English

Widespread access to basic telecom

Current government commitment to ICT

Good governance

Geographic isolation & small size

High literacy

Sense of national unity

Weaknesses

Lack of tertiary institutions

Shortage of ICT professionals

ICT regulatory inexperience

Geographic isolation & small size

Lack of fibre-optic bandwidth

Opportunities

Niche in areas such as e-tourism

Leverage on India�s software development expertise

Telemedicine and distance education

Threats

ICT goals become side tracked

Loss of LDC status

Marginalization

Brain drain

Source: ITU.

49

diversifying its economy. With fewnatural resources, limited laboursupply and a need to promote anenvironmentally clean image for thebenefit of tourism, agricultural andmanufacturing diversification of theeconomy is not a viable option.

8.3 Recommendations

� Accelerate enactment of e-laws.The Ministry of Commercedrafted an e-commerce law thatlegally recognizes electronictransactions. The draft was sentto the Attorney General�s officetwo years ago but has yet to beapproved because of heavyworkload and other priorities.Another delay is that all legaldocuments need to be translatedinto the national language,Dhivehi. The lack of thenecessary laws and onlinetransaction processing is asignificant hindrance to thedevelopment of e-commerce ande-government applications.

� Telemedicine. While there are anumber of efforts to use ICT tomake the health care systemmore efficient, these are largelylimited to the collection anddissemination of information.The Health Master Plan, forexample, stipulates the use ofinformation, education andcommunication to empowerpeople to lead healthy lifestyles.It also emphasizes the need toset up a database to collectessential health indicators andinformation on ICT-relatedprojects. The Master Plan doesnot mention the use oftelemedicine, despite the factthat it is already used, albeit in alimited way. The geographicparticularities of the Maldivessuggest that telemedicine shouldbe an attractive application. Evenbasic telemedicine services, suchas the exchange of images, couldimprove health care services inthe islands.

� Wireless and broadband push.There has been a delay in theadoption of key wireless

technologies such as high speedmobile and Wireless Local AreaNetworks (WLAN or Wi-Fi). Thiswill change as the new ISP hasbeen granted the exclusive useof the 2.4 GHz spectrum forInternet use for the next fewyears. This is the same frequencythat Wi-Fi uses and it is expectedthat the ISP will quickly rolloutservices. Dhiraagu is examiningthe introduction of high-speedmobile service using GeneralPacket Radio Service (GPRS).Given the rapid growth of mobileand the growing number of usersthat are utilizing their mobiles fordata, GPRS looks promising. Itcould also be an appropriatetechnology in the atolls foraccessing the Internetparticularly where fixed lines arelimited or slow. The governmentshould encourage theseinitiatives by facil itatingadministrative procedures.

� Test bed. The Maldives shouldleverage its unique geographicalcharacteristics and experiencefrom tourism by becoming adevelopment and expertisecentre for ICT in these areas. Forexample, most islands are small.Thus they are ideally suited towireless LAN technology such asWi-Fi.9 This would be attractivein resorts for tourists who bringportable computers with them aswell as to spread Internet accesson inhabited islands for the localcommunity. Another area wouldbe the new Multimedia MessagingService (MMS) for mobile phones.International roaming alreadygenerates considerable revenuesand this could be increased givenMMS ability to transmit �digitalpostcards�.10

� Local content development. Oneof the barriers to getting morepeople online is that they maynot be aware of the benefits orthere may not be much contentavailable that interests them. Inthe Maldives many Internet userssurf abroad because there arestill not many compelling national

8. Conclusions

50


sites and applications. In orderto get additional people usingICT, more locally relevant contentwill have to be developed. Thegovernment can take the lead bydeveloping e-citizen applications.This has particular relevance inthe Maldives where distances aregreat. The ability to complete andprocess government forms onlinecould save citizens and businesstransport costs and time spenttravelling. The UNDP atoll portalproject could also potentially helpdrive more Maldivians to use theInternet. Another area of contentdevelopment is tourism. Resortsare in the Maldives and it islogical that content should bedeveloped and hosted in thecountry.

� Statistics. The Maldives has goodadministrative records fortelecommunication services. Inaddition, the national statisticalagency asked about theavailabil ity of certain ICTproducts and services in the 2000Census (i.e., fixed telephone, PC,television). Policy makers arealso monitoring appropriateaccessibility indicators such asislands with telephone serviceand mobile cellular populationcoverage. There is a need toextend the analysis to otherinformation society areas. Forexample, it would be useful toknow how many households havemobile phones. In particular,there is an urgent requirementfor an Internet user survey. Thiswould provide information on thenumber of Internet users andtheir characteristics such aslocation, educational attainment,and gender. This could be carriedout by the national statisticalagency on a regular basis basedon existing international models.In addition, there is a need forinformation about householdexpenditure patterns forcommunication services in orderto have a deeper understandingof how affordability affects ICTtake-up. There is also a need tomeasure the ICT sector in the

national accounts, the take-up ofICT in different sectors (i.e.,business, government andeducation) and ICT employment.

� Distance education. Severaldevelopment agencies havenoted that distance educationcould have a meaningful impactin the Maldives where �bricks andmortar� educational facilities arelimited because of small marketsize and where two thirds of thepopulation is widely dispersedacross two hundred islands.11

While the Maldives seems like anideal place to employ onlineeducation, neither the facilitiesin Male� nor the atolls, areadequately equipped to supportit. In addition, there seems to bemisgivings about distanceeducation particularly its abilityto ensure quality. These issuesneed to be resolved and ameaningful distance educationpolicy and projects implemented.

� Universal access. The Maldiveshas accomplished universalaccess to basic telephoneservice. It now needs to gofurther. The TelecommunicationPolicy states: �A majority of thepopulation is deprived of theInternet service due tounavailability of residentialtelephone lines as well as publicInternet access centres, such ascyber cafés, in most of theislands. Hence, priority must begiven to expand thetelecommunication services andreduce the existing disparity inservice provision between Male�and other islands.� In order to dothis, a coordinated and concretepolicy is needed. Projects andproposals should be coordinatedand existing facilities leveragedto minimize duplication andmaximize the resourcesavailable. Specifically therelationship between 1) existingprivate and community Internetcafes, 2) public kiosks asenvisaged by the e-governmentplan and the 3) UNDP atoll ICTproject need to be clarified. An

51

ideal solution would be to identifyone location in each atoll capital(and eventually every island)where affordable high-speedInternet access to governmentand other Internet services will beavailable. By combining initiativesit would be possible to achieve amore attractive solution such ashigh-speed fibre optic, Wi-Fi orVSAT rather than just dial-upaccess. Pricing and training issuesalso need to be clarified.

� Education. The governmentneeds to enhance university-level ICT training. One way is toprovide support for ICT activitiesof the Maldives College of HigherEducation. The governmentshould further support thecreation of an IT degree. Theshortage of IT manpower affectsall sectors across the economy,including the government, andthe Maldives needs to make surethat it creates its own pool of ITprofessionals. While it wouldseem reasonable to rely onforeign universities forspecialized training, Maldiviansshould have the possibility toreceive basic IT training in suchareas as database management,support, and networking.

There is also a need to promotecomputer literacy and awarenessamong the public at large. Thisincludes providing training inbasic computer skills, particularlyfor those outside the workforceand academic environment. Thiscould be modelled on thecountry�s successful adult literacyprogramme.

� Liberalization. There is no doubtthat additional liberalization ofthe telecommunication sector willresult in lower pricing for Internetand mobile services. This is theexperience of other countriesthat have introducedcompetition. However theMaldives is unusual in that thecompact between thegovernment and the incumbenttelecommunication operator has

been very successful. Dhiraaguhas provided telephone serviceto all inhabited islands, achallenging accomplishmentconsidering the geographicallayout of the country. Given theunique circumstances of theMaldives�many small relativelysparsely inhabited islands�liberalization may be difficult.Though there is growingevidence that investors can beinterested in small markets, thedispersion of population in theMaldives will make it a moredifficult proposition.Furthermore, the governmenthas been able to extractconcessions from Dhiraagu thatwill be less likely in a morecompetitive environment. Thusliberalization should not bepursued as an end in itself, butrather as one way to achieve amodern telecommunicationnetwork with a high level ofaccess. Liberalization will requiregreater resources devoted toregulatory issues such asinterconnection and universalservice if it is to be successful. Atelecommunication act is also anecessary precursor forliberalization to be successful.

� Fibre optic. The Maldives relianceon satellite technology for itsinternational Internet connectionhas drawbacks. The price ofInternet connections via fibretends to be cheaper thansatell ite, quantity is moreabundant and the quality better.The latter is an important point,for if the Maldives is to develop avibrant software sector�particularly in the area of datahosting�fibre is a must forreliability and speed. Though thecost of an undersea fibreconnection will be steep, it shouldnot be measured in purelyfinancial terms. There are wide-ranging spill over benefits thatneed to be quantified to form partof the equation.

� ICT and the economy. There iswidespread belief that ICT can

8. Conclusions

52


play a pivotal role in theMaldivian economy. Indeed, withlimited resources and a smallmanufacturing sector, theMaldives has few options fordiversifying its economy and ICTseems one of the brightest. Thisis acknowledged in the varioussector and national developmentplans and the draft ICT strategywhich sees employment creationas one of the pillars of ICTmentioning areas such e-tourism, e-fisheries and softwareparks. What is now needed ismore specificity about the exactimpacts, layout and evolution ofthe ICT sector. This would include

an inventory of existing ICTbusinesses, their output andemployment and futureevolution. It would also includea detailed description about thetypes of future ICT businessesthat the country would like toestablish, employmentrequirements and linkages toexisting and planned training. Amacro-economic model showingthe relationship between ICT andthe economy would be useful forplanning. The governmentshould also pick a few strategicICT businesses it wants todevelop and assign resources toattract them.

53

1Essentially this could be summarized as the operator meeting specific goals, particularly the completion of anationwide transmission network in exchange for retaining market exclusivity. Part government ownership ofthe operator no doubt assisted in ensuring that the operator�s goals were in line with national developmentpriorities.

2�ITU Digital Access Index: World�s First Global ICT Ranking.� Press Release. 19 November 2003.http://www.itu.int/newsarchive/press_releases/2003/30.html. [Accessed 9 November 2004].

3A Bangladesh newspaper commented on the South Asian rankings. See �Bangladesh crawls in the ICT race.�The Daily Star. 24 November 2003. http://www.thedailystar.net/2003/11/24/d31124050248.htm.[Accessed 9 February 2004].

4See �The Global Diffusion of the Internet Project� at http://mosaic.unomaha.edu/gdi.html.[Accessed 9 February 2004].

5See the World Bank Governance Research Indicator Country Snapshot (GRICS): 1996-2002 athttp://info.worldbank.org/governance/kkz2002/sc_chart.asp. [Accessed 9 February 2004].

6 For more on e-tourism and developing countries see the web page of the UNCTAD Expert Meeting onElectronic Commerce and Tourism held in September 2000:http://www.unctad.org/Templates/meeting.asp?intItemID=1942&lang=1&m=4338.[Accessed 4 February 2004].

7Statement by Prime Minister Shri Atal Bihari Vajpayee at State Luncheon by President Maumoon AbdulGayoom of the Republic of Maldives. 23 September 2002.http://meadev.nic.in/speeches/stmt-pm-stateluncheon.htm. [Accessed 9 February 2004].

8For definitions of the elements and how values are assigned see �Questionnaire: Global Diffusion of theInternet� at http://som.csudh.edu/fac/lpress/gdiff/quest.htm. [Accessed 9 February 2004].

9For example the Mirihi Island Resort, the first to obtain a satellite Internet connection, has installed a W-Finetwork noting �It would be very good for the islands in terms of tourism and attracting people to theisland.� Alfred Hermida. 31 July 2003. �Paradise island gets wireless web.� BBC News.http://newsvote.bbc.co.uk/mpapps/pagetools/print/news.bbc.co.uk/2/hi/technology/3107027.stm.[Accessed 4 February 2004]. The resort�s website notes the availability of wireless Internet access for those�who need to keep in touch with work or want to send emails to family.�http://www.mirihi.com/internet.html. [Accessed 4 February 2004].

10Data are not available on the number of postcards sent from the Maldives but can be inferred frominternational letter-post items which include postcards. There were 1.5 million international letter-post itemssent in 2001 compared to around one million received. Assuming that the difference is accounted for bypostcards sent by tourists, this suggests that around 500�000 post cards were sent from the Maldivesin 2001.

11The World Bank calls for distance education to train O level graduates noting that computers are widelyavailable in the atolls. http://lnweb18.worldbank.org/oed/oeddoclib.nsf/DocUNIDViewForJavaSearch/A2B5EB7F276345B385256C860071A654/$file/Maldives_PPAR.pdf. The Asian Development Bank also hadplanned for university level distance training as part of an education project.http://www.adb.org/Documents/Profiles/LOAN/28161013.ASP. The following paper also makes the case forpromoting distance education at the secondary level: Ali Fawaz Shareet and Kinshuk. 2003. �DistanceEducation Model for Secondary Schools in Maldives.� Proceedings of the International Conference onInformation Technology: Research and Education.

8. Conclusions

55

Annex 1: Meeting schedule

Date

28 May

29 May

1 June

2 June

3 June

Organization

Dhiraagu

Ministry of Communication, Science& Technology

Dhiraagu

Ministry of Planning andDevelopment, Statistical Office


Ministry of Trade and Industries

Ministry of Education


Enviroweb (Consultants fore-government project)

Asia-Pacific Telecommunity (APT)

Dhiraagu

Opening APT Study Group Meeting

College of Higher Education

Ministry of Health

United Nations DevelopmentProgramme (UNDP)

Focus Computers (2nd ISP)

Persons met

Mr. Mohamed Maumoon, Head of Services

Mr. Hussain Shareef, Director GeneralMr. Mohamed Amir, Director, TelecomMs. Zulaikha Ibrahim, Telecom Analyst

Mr. Ismail Rasheed, Head of NetworksMr. Umayr Shafeeu, Manager SwitchingMr. Ahmed Shaafiu, Marketing ManagerMs. Lina Atkinson, Manager Sales Outlets

Ms. Aishath Shahuda, Assistant Director

Mr. Midhath Hilmy, MinisterMr. Faig Umar, Assistant DirectorMs. Malika Ibrahim, Assistant Director

Mr. Fazeel Najeeb, Director International Co-operation

Mr. Ahmed Adeem, Senior System Programmer

Mr. Hussain Shareef, Director GeneralMr. Mohamed Amir, Director, Telecom

Mr. Michel Boulanger, Consultant in InformationSystemsMr. Jesus Garcia, Consultant in Information Systems

Mr. Amarendra Narayan, Secretary GeneralMr. G. Hugh Railton, Deputy Secretary General

Mr. Ismail Waheed, Chief Executive Officer

Mr. Hassan Hameed, Rector

Mr. Ahmed Afaal, Assistant Director

Mr. Jan Thomas Hiemstra, Deputy Resident Rep.Ms. Nashida Sattar, Programme Officer

Mr. Sobah Rasheed, Director

Annexes

56


Annex 2: Acronyms

ADB Asian Development Bank

COL Center for Open Learning

FHTS Faculty of Hospitality and Tourism Studies

FMC Faculty of Management and Computing

ICT Information and Communication Technology

ISP Internet Service Provider

ITDB Information Technology Development Project (ITDP)

Kbps Kilo bits per second

LDC Least Developed Countries

Mbps Mega bits per second

MCHE Maldives College of Higher Education

MMS Multimedia Messaging Service

MOE Ministry of Education

MPND Ministry of Planning and National Development

NDP National Development Plan

PC Personal computer

Rf Maldivian Rufiya. The 2002 annual average rate of Rf 12.85 per oneUnited States dollar is used to make conversions in the report.

SAARC South Asian Association for Regional Cooperation

SIDS Small Island Developing States

SMS Short Messaging Service

UNDP United Nations Development Programme

VSAT Very Small Aperture Terminal

57

Annex 3: ICT statistics

Note Unit 1995 1996 1997 1998 1999 2000 2001 2002 2003

DEMOGRAPHY, ECONOMY

Population 1 10x3 245 250 254 259 265 270 275 281 285Households 2 10x3 35 36 37 38 40 41 42 43 44Gross domestic product 3 10x6 4'696 5'301 5'982 6'357 6'935 7'348 7'651 8'186 �Average annual exchange rate per US$ 4 11.77 11.77 11.77 11.77 11.77 11.77 12.24 12.80 �Consumer price index 4 100 106 114 113 116 115 115 116 �

TELEPHONE NETWORK

Main telephone lines 13'869 15'268 17'967 19'985 22'179 24'432 27'242 28'651 30'056Main lines per 100 inh. 5.67 6.12 7.07 7.72 8.37 9.05 9.9 10.2 10.5% residential main lines % 61.9 68.3 69.4 65.1 63.4 63 62.6 63.9 �% main lines in urban areas % 89 � � � � � 74 73 73Public payphones 181 285 397 521 596 629 723 773 918Waiting list for main lines 261 244 326 315 514 153 265 113 44

MOBILE SERVICES

GSM mobile subscribers - 20 1'290 1'606 2'926 7'638 18'894 41'899 66'466 - Cellular prepaid subscribers - - - - - - 7'360 29'625 53'189Coverage of population % - � � � 35 40 40 54 71Cellular subscribers per 100 inh. - 0.01 0.51 0.62 1.10 2.83 6.86 14.91 23.3

TRAFFIC (minutes)

Local telephone 10x3 105'539 107'650 113'813 129'203 137'118 144'229 142'170 112'936 �National trunk telephone 10x3 29'645 33'773 54'558 62'537 76'841 81'661 80'169 64'544 �Dial-up Internet 10x3 - ... ... 10'613 20'020 35'947 43'893 51'358 �Fixed-mobile 10x3 - ... ... 3'000 3'601 19'320 32'097 47'407 �International out. telephone 10x3 3'086 3'976 4'384 5'067 5'682 5'562 6'900 7'016 �International inc. telephone 10x3 3'612 4'239 5'057 5'903 6'655 7'212 8'335 10'266 ...Mobile 10x3 - - 1'376 6'927 8'330 35'603 53'054 81'580 ...

STAFF

Full-time telecommunication 384 445 399 497 550 532 523 519 ... - of which female ... ... ... 124 137 131 127 140 ...

QUALITY OF SERVICE

% Telephone faults cleared by next day % � 52 57 45 46 � ... 90 �Faults per 100 main lines per year % 36 87.9 76.9 69.6 55.9 55.7 52.3 46.4 ...

TARIFFS

Telephone connection 1'720 1'720 1'720 1'720 1'720 1'720 1'720 1'720 1'720Telephone monthly subscription 30 30 30 30 30 30 30 30 30Local call (per minute) 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25Cellular connection - 1'000 1'000 1'000 1'000 1'000 500 500 500Cellular monthly subscription - 300 300 300 300 300 150 150 150Cellular - 3-min. local call (peak) - 7.5 7.5 7.5 7.5 7.5 6.75 6.75 6.75Cellular - 3-min. local call (economy) - 6.75 6.75 6.75 6.75 6.75 5.70 5.70 5.40

REVENUE

Total telecom services 10x6 220 316 399 460 529 624 720 835 � - Mobile communication 10x6 - � � 29 30 100 201 360 �

CAPITAL EXPENDITURE

Annual telecom investment 10x6 110 176 173 131 100 135 88 102 �

BROADCASTING

Television equipped households 5 12'000 13'800 15'800 18'100 20'700 23'204 26'010 29'100 ...Home satellite antennas 5 113 280 450 750 1'300 2'094 3'500 5'800 ...

INFORMATION TECHNOLOGY

Personal computers 3'000 4'000 5'000 6'000 7'500 10'000 15'000 20'000 ...Internet subscribers 6 - - ... 763 939 1'060 1'100 1'067 1'147 - DSL Internet subscribers - - - - - - - 190 490Estimated Internet users - 575 800 1'500 3'000 6'000 10'000 15'000 ...International Internet Bandwidth (Mbps) - - 0.64 0.64 2 3 5 9 ...

Note: (1) Source: Ministry of Planning and National Development (MPND) mid-year estimates. (2) Source: MPND (1995,2000); ITU estimates (other years). (3) At market prices. Source: MPND. (4) Source: IMF. (5) 2000 = Census. Other years,ITU estimate. 1995-96: Dhiraagu, 2000: Census, other years: ITU estimate. (6) Not including �pay as you go� users.Source: Dhiraagu, Ministry of Communications, Science and Technology.

Annexes

58


Annex 4: Bibliography

Asian Development Bank. November 2001. Report and Recommendation of the President to theBoard of Directors on a proposed loan to the Republic of Maldives for the InformationTechnology Development Project. http://www.adb.org/Documents/RRPS/MLD/rrp_34276.pdf.

Ministry of Communication, Science and Technology. 2003. e-Maldives: The Republic of MaldivesNational Information and Communications Technology Policy. Draft.

Ministry of Communication, Science and Technology. August 2001. Maldives TelecommunicationPolicy 2001-2005.http://www.mcst.gov.mv/Downloads/Documents/Telecom%20Policy-Public.pdf.

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