The parliament of São Tomé and Príncipe has approved a bill that will liberalise the country’s telecom market from December 2005. At present CST, a semi-privatised company is the sole supplier of telephone, cellphone and internet services in the archipelago.

The São Toméan government and parliament has now provided the legal framework for enhanced competition on the small telecom market in the island state. From December 2005, new national and international bidders will be welcome to challenge the monopoly of Companhia Santomense de Telecomunicações (CST).

The telecom market in São Tomé and Príncipe - an impoverished island state of only 150,000 inhabitants - is however still very small. According to the latest statistics from CST, there are only a total of 6,600 private subscribers to the company’s fixed telephone service, 2,900 cellphone subscribers and 900 internet service subscribers.

The island state however is on the doorstep of an economic boom as large quantities of offshore oil have been found. Oil companies expect that real oil production in São Tomé will start in 2007, making an economic impact on the entire population. Thus, by the end of this decade, also the archipelago’s telecom market is anticipated to have experienced a boom.

Currently, however, semi-privatised CST is the nation’s "sole supplier of fixed, national and international telephone services, internet, data communications services and hires circuits and telex," according to the company itself. CST is controlled by Portugal Telecom, holding 51 percent of its shares, and the government of São Tomé and Príncipe (49 percent).

The new telecom legislation permits CST to maintain its monopoly situation until December 2005. According to the São Tomé independent daily, ‘Téla Nón’, São Toméan members of parliament wanted to give the national telecom utility a fair chance to consolidate its position in the market and to "secure its investments made since the 1980s by modernising the telecommunications of São Tomé."

To give CST a chance to modernise, the new law assures the company’s monopoly of national and international calls from fixed telephones and cellphones until December 2005. Other parts of the company’s monopoly, for example internet services, were immediately done away with.

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