REPUBLIC OF PANAMA CONTRALORÍA GENERAL DE LA REPÚBLICA [TREASURY INSPECTOR'S OFFICE]

Transcription

1 REPUBLIC OF PANAMA CONTRALORÍA GENERAL DE LA REPÚBLICA [TREASURY INSPECTOR'S OFFICE] Dirección de Estadística y Censo [Directorate for Statistics and Census] TELECOMMUNICATIONS IN THE REPUBLIC OF PANAMA PREPARED BY: DORIS E. NIETO D. PANAMA, 8 SEPTEMBER 2004

2 - 2 - TABLE OF CONTENTS INTRODUCTION I II III IV V GENERAL TYPES OF SERVICE SITUATION OF TELECOMMUNICATIONS IN THE PUBLIC SECTOR INDICATORS CALCULATION METHODOLOGY USED FOR THE SECTOR AND THE SECTOR'S CONTRIBUTION TO PANAMA'S GROSS DOMESTIC PRODUCT CONCLUSIONS ANNEXES

3 - 3 - INTRODUCTION Communications comprise activities that are currently on the continuous rise in the economy of Panama following the introduction of new services, and in particular the opening up of the telecommunication market, the arrival of new licensee companies interested in providing the new services, and the competitiveness they generate. This paper presents the general aspects of the evolution of communications within Panama's economy and the market's free competition resulting from the sector's privatization process. It then describes the various types of existing services, the situation regarding communications in the public sector and the points of access to new communication services available to the country's rural and suburban areas. The paper also presents various indicators used to measure the activity, notwithstanding the limits and difficulties involved in obtaining them. Lastly, we look at the sector's contribution to the country's gross domestic product as well as the methodology used to calculate gross value added. The annexes contain data illustrating the points made. I GENERAL The economy of the Republic of Panama is based mainly on the contribution generated by the services sector, which includes the Panama Canal; the banking centre, with 73 established banks, of which 55 are foreign investment and 18 are national investment; the international free trade zone (accounting for 7% of GDP); major insurance companies; international ports for the loading and unloading of containers; a global-level merchant navy register; state-of-the-art telecommunications; and a tourism sector that is developing rapidly, benefiting from the country's geographical location. Over the last five years, Panama has undergone many changes with, first and foremost, the return of the Canal into Panamanian hands, as well as the privatization of State service-providing companies that has led to major innovations, in particular in the area of telecommunications. The telecommunication market was privatized in 1997, when the British company Cable & Wireless paid USD 652 million for 49% of the shares of the State company INTEL - Instituto Nacional de Telecomunicaciones. This partial privatization of telephony comprised, inter alia, a five-year full exclusivity contract for local, national long-distance and international services, public telephony and the lease of voice circuits. On 2 January 2003, the market was opened up to free competition for the aforementioned telecommunication services, and even though the Ente Regulador de los Servicios Públicos [Public Services Regulator] issued 61 licences for the operation of communication services, there are currently only 25 companies now operating and competing for the market, providing services such as basic, local and international telecommunication, public and semipublic telephone facilities, mobile cellular telephony, conventional trunk links, paging, Internet for public use, and so forth. II TYPES OF SERVICE The telecommunication infrastructure has improved considerably as a result of privatization and free market competition. This is clearly illustrated by the introduction of fixed, mobile and pre-paid telephony, the increased availability of modern public telephones and, above all, the major growth of the Internet service at residential level and within companies at national level. Moreover, telecommunication companies are installing network operation centres in Panama, taking advantage

4 - 4 - of the country's geographical location and the abundant availability of fibre optic submarine communication circuits on both coasts, allowing the interconnection of north, central and south America, Asia, Europe and Africa. The communication sector comprises 30 types of service which may be offered or provided by natural or legal persons possessing a communication services licence in the Republic of Panama; there are two basic types of service: Type A services: Services whose provision, for technical or economic reasons, is authorized on the basis of time-related exclusivity or for a limited number of licensees operating on the basis of competition; Type B services: Other communication services, whose provision is authorized freely on the basis of competition. As indicated, the common denominator in both cases is free competition, based on which it may be assumed that the prices of services are regulated by free offer and demand. There are currently 30 types of service: Local basic telecommunication service National basic telecommunication service International basic telecommunication service Public and semi-public terminals Leased dedicated voice circuits Mobile cellular telephone service, A and B bands Conventional trunk systems for public or private use Fixed and mobile radiocommunication service National telex service International telex service International telegraph service International digital business service Very small aperture terminals (VSAT) service Data transmission service Data switching service Paging service Public Internet service Fax retransmission service Maritime mobile communication service for public use Maritime mobile communication service for private use Aeronautical mobile communication service for private use Low orbit satellite telecommunication service Link service for broadcasting stations Link service for television stations Link service for high-fidelity audio signals, video and/or data, with or without use of radio spectrum Service for continuous or occasional radio or television transmissions via satellite

5 - 5 - Call centre service for commercial use Interactive television service with or without use of radio spectrum Value added telecommunication service Telecommunication services resale service III SITUATION OF COMMUNICATION SERVICES IN THE PUBLIC SECTOR Internal network infrastructure Of the 57 entities which currently constitute Panama's public sector, excluding local governments, some 51 per cent have their own LANs and 20% have or plan to have WANs with national coverage. Public key infrastructure With the backing of a donation from the Organization of American States (OAS) and the specialized consultancy and technology services provided by Microsoft de Panamá, the Electoral Tribunal issued "Digital Certificates" to support the use of digital signature in electronic communications. The first phase of this new project Promoting Electronic Government in Panama - Contraloría General de la República will be limited to internal use within the institute, which has installed a digital network at national level for communication with all its offices in the provincial headquarters and the country's main districts. "INFOPLAZAs" - Public access points These are an initiative of the Inter-American Development Bank (IDB), whose objective is to develop what it calls telecentres, for which purpose Panama's National Secretariat of Science, Technology and Innovation (SENACYT) created the Fundación INFOPLAZA to provide added impetus to the project. As the project was devised with a view to small companies setting up cybercafes, SENACYT's national secretary agreed with IDB that the project should be social, low-cost and communitybased, with the objective of providing the country's rural and suburban communities with a means of access to Internet and other information resources such as educational, training and distancelearning multimedia. Thus February 2000 saw the inauguration of the Republic of Panama's first INFOPLAZA, in the district of Pedasí, province of Los Santos. The technical coordination of the INFOPLAZAs stipulates that the service be set up in conjunction with an associate, for example a local council, public foundation, parish, or government or cooperative body. It must be a non-governmental organization (NGO). Subsequently, SENACYT provides it with six computers; a network server; communication (concentrator and router) and Internet access equipment; a colour printer; structured wiring and ten cubicles. Training is also provided to the administrators contracted by the associate. Between 25 cents and one United States dollar are charged for the use of the computers. This money is paid into the account of Fundación INFOPLAZA, to pay for the Internet connection and technical support. Fifty-four INFOPLAZAs have now been set up, each with a set of multimedia computers connected to the Internet, printing facilities, and space on the Internet to advertise their activities or products.

6 - 6 - SENACYT also plans to carry out a feasibility study for a wireless communication system to connect the country's rural communities to the Internet. IV INDICATORS Panama's Ente Regulador de los Servicios Públicos (ERSP) is the State entity responsible for regulating the companies that provide the basic privatized services. ERSP is keen to develop a complete statistical yearbook reflecting the performance of the telecommunication sector over the last years. To date, it has not been possible to prepare this complete yearbook of the sector's main indicators, as arrangements are under way for a systematized process for data collection and the development of a database. Nevertheless, the following statistical summary has been prepared for the sector covering the last seven years: 1) Basic telephone network. 2) Mobile telephone services. 3) Paging service. 4) Data transmission services. 5) Telecommunication sector personnel. 6) Basic telephone service quality. 7) Internet services (see annexes). Regarding this last indicator, the statistics give an index of 8% for Internet penetration in Panama; thus approximately eight out of every 100 Panamanians use the Internet. One factor that has directly influenced the development of Internet is teledensity, or access to telephones for connection to the Internet network. There is a close relationship between this factor and the number of computers per 100 inhabitants. To all this we must add the country's certification level, the quality of the telephone lines, and the degree to which computer equipment is up to date. An ERSP study shows that there are around computers in Panama, which means that three out of every 100 Panamanians have a computer. Calculated per family, this means that around 10 in every 100 families have a computer. The most recent census of population and housing carried out by the Contraloría General, in the year 2000, registered a total of homes with computers nationwide. At the same time, there has been an increase in the number of private Internet cafes and INFOPLAZAs, providing people with the opportunity to use the Internet if they are not equipped at home. The company Cable & Wireless is the main telephone network operator, accounting for around 40% of Panama's Internet market. The remainder of users are catered for by companies like Internet Bell South, Cable Onda, and others. V CALCULATION METHODOLOGY USED FOR THE SECTOR AND THE SECTOR'S CONTRIBUTION TO PANAMA'S GROSS DOMESTIC PRODUCT Today, telecommunications in Panama have made significant progress within the national economy, as is borne out by their contribution to GDP: in 1998, they represented 3% of total GDP, and in subsequent years, around 5%. It should be noted that the telecommunication sector's privatization in 1997 has made it difficult to obtain the financial information used to calculate value added at current prices, owing to the competition between companies. This is further complicated by the opening up of the market in

7 - 7 - January 2003 and the entry of over 60 licensees ready to offer the various different communication services; ERSP is coordinating the work with a view to obtaining the required information in the most timely manner possible. As to calculation of value added at constant prices using the series, this presents drawbacks and limitations. Such is the case regarding the prices and valuation of some indicators which are difficult to calculate for the base year 1996 as the corresponding items did not exist on the market - for example, prepaid cellular and Internet. Nevertheless, of the set of indicators collected by ERSP, use is made of the following: 1) Basic telephone network. Data related to the number of main lines according to type of user and public telephones installed. 2) Mobile cellular telephone services. Cellular subscribers with prepaid card and cellular subscribers with contract. 3) Internet services. Subscribers with the main service providers. This indicator is extremely difficult to establish, as the tools and elements required to measure it more accurately are not available. In addition to these indicators, use is also made of the number of international calls, which up until 2003 was obtained directly from the tax paid per call, namely one Balboa (United Stated dollar). As of 2004, this tax has been ad valorem, based on the call's duration, thus the manner in which it is to be established has to be worked out for this year's calculations. The indicators used are valuated at the base year's prices, with the exception of pre-paid cellular and Internet for which they are valuated at 1998 prices, as that was the year in which provision of those services began. When calculating the value per type of service, a weighted index is developed and used to extrapolate gross value added for the base year. This approach allows the series to be calculated at current and constant prices for this major sector, based on the recommendations made in the 1993 System of National Accounts (Sistema de Cuentas Nacionales de 1993 (SCN'93)). CONCLUSIONS Development at global level requires constantly improved quality of service. This must inevitably go hand-in-hand with investment in human resources and infrastructure. Consumer demand at international and national level requires communications to advance by leaps and bounds. Communications thus play a major role in the development of countries and Panama cannot ignore this, given that its economy is based mainly on the services sector, and also given its natural geographical location. In conclusion with the completion of this work, it is obvious that appropriate coverage indicators are required if this sector's full performance is to be realized as part of the country's economic activity. It should nevertheless be stressed that it has been possible to produce the current and constant series of telecommunication GVA by implementing the new 1993 System of National Accounts despite existing limitations. We hope that participation in the Global Indicators Workshop on Community Access to ICTs will be of great benefit as far as the experiences of other countries are concerned, and that a better picture of the sector at global level will be obtained, with information on the application of solutions to problems relating to the sector's dynamics affecting data availability, processing in the absence of records of international calls now effected with the Internet, the development of production indexes within the sector, etc.

8 - 8 - BIBLIOGRAPHY JORDAN, Wilfredo. Internautas a la panameña [Panamanian Cybernauts]. La Prensa (Panamá) SUPLEMENTO MARTES FINANCIERO N 257 (Tuesday, 28 January 2003). Web page National report: IMPULSANDO EL GOBIERNO ELECTRÓNICO EN PANAMÁ [Promoting electronic government in Panama]. Web page Ente Regulador de los servicios Públicos. ESTADÍSTICAS DE TELECOMUNICACIONES [Telecommunication statistics]. 101K - 31 August Web page PanamáCOM Hosting, Servidores Virtuales y dedicados. La infraestructura de Internet y de las Telecomunicaciones en Panamá [PanamáCOM - Hosting, virtual and dedicated servers. Internet and telecommunication infrastructure in Panama.]

9 - 9 - ANNEXES

10 LIST OF TABLES AND GRAPHS Annex 1 Basic telephone network in the Republic of Panama: Annex 2 Mobile telephone services in the Republic of Panama: Annex 3 Paging services in the Republic of Panama: Annex 4 Data transmission services in the Republic of Panama: Annex 5 Telecommunication sector personnel in the Republic of Panama: Annex 6 Basic telephony quality of service in the Republic of Panama: Annex 7 Internet services in the Republic of Panama: Graph 1 Annex 8 Total GDP and GVA for communications in the Republic of Panama: to Total gross domestic product, gross value added for communications and percentage variations in the Republic of Panama at 1996 prices: Graph 2 Internet customers per year in the Republic of Panama: Annex 9 Number of customers for Internet service facilities in the Republic of Panama: Annex 10 Population by gender, according to age group and specific age, in the Republic of Panama per province, census 2000

11 Annex 1 BASIC TELEPHONE NETWORK IN THE REPUBLIC OF PANAMA: THERE WAS ONLY ONE PROVIDER UP UNTIL 31 DECEMBER 2002 Indicator (E) Main telephone lines operating Main lines in largest city (E) Switching centre capacity Public telephones Coin telephones Card telephones International telephone circuits (E) Estimate Source: Ente Regulador de los Servicios Públicos

12 Annex 2 MOBILE TELEPHONE SERVICES IN THE REPUBLIC OF PANAMA: THERE ARE TWO SERVICE PROVIDERS Mobile cellular telephone subscribers Indicator Annual index of cellular telephones per 100 inhabitants Cellular service subscribers with digital technology Cellular subscribers - prepaid card Cellular subscribers - contract Number of base stations Population coverage (%) 68% 69% 74% 77% 79% 82% Coverage of national territory (%) 14% 20% (E) 22% 24% 28% 32% (E) Estimate Source: Ente Regulador de los Servicios Públicos

13 Annex 3 PAGING SERVICES IN THE REPUBLIC OF PANAMA: THERE ARE SIX MAIN SERVICE PROVIDERS Indicator Subscribers to paging service Annual index of paging service per 100 inhabitants Source: Ente Regulador de los Servicios Públicos

14 Annex 4 DATA TRANSMISSION SERVICES IN THE REPUBLIC OF PANAMA: THERE ARE VARIOUS SERVICE PROVIDERS Indicator Total telex subscriber lines N/R/K Private leased circuits *3 816 *4 362 *(E)8 000 N/A N/A 230 Total number of public data network subscribers N/R/K **146 **2 600 N/A N/A N/A Data modems in operation N/R/K N/R/K N/A N/A N/A * Includes analogue FEs, TDM, frame relay, IBS, international frame relay ** Includes X.25 subscribers only N/R/K (E) N/A No records kept Estimate Not available Source: Ente Regulador de los Servicios Públicos

15 Annex 5 TELECOMMUNICATION SECTOR PERSONNEL IN THE REPUBLIC OF PANAMA: Indicator (E) Total telecommunication services full-time personnel (E) Estimate Source: Ente Regulador de los Servicios Públicos

16 Annex 6 BASIC TELEPHONY QUALITY OF SERVICE IN THE REPUBLIC OF PANAMA: THERE IS ONLY ONE SERVICE PROVIDER Indicator % of faults rectified within 48 hours 66.0% 86.0% 98.0% 99.8% 97.5% 86.1% Total number of main line faults per year Faults per 100 main lines per year Number of complaints per customer invoices % of operator-assisted calls answered within 10 seconds - national direct line % of operator-assisted calls answered within 10 seconds - international direct line (E) N/A N/A N/A N/A N/A N/A (E) N/A Estimate Not available Source: Ente Regulador de los Servicios Públicos

17 Annex 7 INTERNET SERVICES IN THE REPUBLIC OF PANAMA: THERE ARE TEN MAIN SERVICE PROVIDERS Indicator Internet subscribers Annual index of Internet subscribers per 100 inhabitants Internet subscribers - switched mode Internet subscribers - leased line Internet international bandwidth (Mbps) Outgoing international bandwidth for Internet (Mbps) Incoming international bandwidth for Internet (Mbps) Source: Ente Regulador de los Servicios Públicos 14/8 14/8 330/330 16/8 16/8 16/

18 Graph 1 TOTAL GDP AND GVA FOR COMMUNICATIONS IN THE REPUBLIC OF PANAMA: TO Percentage variation Percentage variation Years GVA for communications TOTAL GDP

19 Annex 8 Years TOTAL GROSS DOMESTIC PRODUCT, GROSS VALUE ADDED FOR COMMUNICATIONS AND PERCENTAGE VARIATIONS IN THE REPUBLIC OF PANAMA AT 1996 PRICES: Total gross domestic product (thousands of Balboas) Gross value added for communications Percentage contribution % Percentage variation Total Communications % % % % % % % Source: Dirección de Estadística y Censo Contraloría General de la República de Panamá

20 Graph 2 INTERNET CUSTOMERS PER YEAR IN THE REPUBLIC OF PANAMA Number of customers Num ber of cust omer s Years

21 Annex 9 NUMBER OF CUSTOMERS FOR INTERNET SERVICE FACILITIES PER COMPANY IN THE REPUBLIC OF PANAMA: Company ) Ayayai ) BSC ) CWP ) Advanced 1 1 5) Cable Onda ) Cerco Wireless ) Chiriqui Punto Com ) Convergence 407 9) Fast Bee ) Global Telecom 95 11) IFX Networks ) Information Highway ) Interdonet, Inc ) Internet Data 60 15) Internet Panama ) Net2net, Corp ) PSINET Panama ) Ulatec, S.A ) Telecarrier ) Liberty Technology ) Uunet Internt ) Optynex Telecom. 49 TOTAL Graph data Years Number of customers Source: Ente Regulador de los Servicios Públicos

22 Annex 10 POPULATION BY GENDER, ACCORDING TO AGE GROUP AND SPECIFIC AGE, IN THE REPUBLIC OF PANAMA PER PROVINCE CENSUS 2000 Age (years) Population Total Men Women Masculinity ratio (males per 100 females) Total and over Undeclared Average age Source: Dirección de Estadística y Censo Contraloría General de la República de Panamá