Information and Communication Technology in the … · The word atoll comes from the Maldivian...

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. Formatting and coverdesign was done by Nathalie Rollet. The report is based on research carried out from28 May - 3 June 2003 as well as articles and reports noted in the document. Theassistance of the Ministry of Communication, Science and Technology and MohamedAmir and Zulaikha Ibrahim was indispensable. Equally, the report would not havebeen 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 ...........................................................................4

2.3 Economy .............................................................................5

2.4 Quality of Life ......................................................................6

2.5 Government ........................................................................6

3. Pervaisveness ...................................................................... 8

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

3.2 Computers and Internet ...................................................... 10

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 ....................................................................... 19

5.1 International and domestic backbone.................................... 19

5.2 Exchange points ................................................................. 20

5.3 User access methods .......................................................... 20

6. Market ............................................................................... 23

6.1 Overview .......................................................................... 23

6.2 Fixed ................................................................................ 26

6.3 Mobile............................................................................... 26

6.4 Internet ............................................................................ 26

7. Information Society ........................................................... 29

7.1 Economic impact ................................................................ 29

7.2 Employment impact ............................................................ 31

7.3 Social impact ..................................................................... 31

7.4 E-Government ................................................................... 34

7.5 Education .......................................................................... 35

8. Conclusions ....................................................................... 44

8.1 A successful SIDS .............................................................. 44

8.2 Assessing the Maldives ....................................................... 45

8.3 Recommendations .............................................................. 49

Annex 1: Meeting schedule ..................................................... 55

Annex 2: Acronyms ................................................................. 56

Annex 3: ICT statistics ............................................................ 57

Annex 4: Bibliography ............................................................. 58

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].

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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.

4


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

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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

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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


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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.

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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


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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].

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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

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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

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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

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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].

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