Portugal's membership in the EU was beneficial for the country's infrastructure . This was so not only because of the economic improvement due to European integration, but also because the country received support in financing its infrastructure projects from the union's funds. The greatest portions of these funds were raised through the European Regional Development Fund. Between 1987 and 1998, Portugal received approximately US$24 billion in development funds from the EU. Economic growth over the 1990s has been accompanied by some ambitious infrastructure improvements, most notably by the completion of an extensive system of modern highways.
Additional infrastructure projects are expected to be launched between 2001 and 2005, including additional roads, dams and ports, a new international airport (to be built at Ota, north of Lisbon), a new metro (subway) system at Oporto, modernization of the country's railroad system, and an upgrade of the natural gas pipeline system. As a result, the country has a well-developed transportation network with 59,110 kilometers (37,000 miles) of paved roads, including 797 kilometers (498 miles) of expressways, 2,850 kilometers (1,780 miles) of railroads, and some 820 kilometers (513 miles) of navigable inland waterways (of relatively little importance to the national economy). Once a great maritime nation, Portugal has many ports and harbors in Aveiro, Funchal (the Madeira Islands), Horta (the Azores), Leixoes, Lisbon, Porto, Ponta Delgada (Azores), Praia da Vitoria (Azores), Setubal, and Viana do Castelo. The country also runs a sizable merchant fleet of 151 ships totaling 1,061,267 dead-weight tons (DWT). Portugal is served by nearly 40 airports and by its major national airline, TAP.
The energy industry is largely state-controlled, but energy output in Portugal is still quite low. Its dependence on foreign energy sources is thus correspondingly high. No oil or natural gas has been exploited in the country, known reserves of coal are limited (only about 30 million tons), and there are no nuclear power facilities. With financing from the EU, Portugal allocated Esc470 billion to the construction of a natural gas network to connect with the pipeline from Algeria to Europe, which opened in November 1996. The country expects the connection to the pipeline to support one-tenth of its energy
|Country||Newspapers||Radios||TV Sets a||Cable subscribers a||Mobile Phones a||Fax Machines a||Personal Computers a||Internet Hosts b||Internet Users b|
|a Data are from International Telecommunication Union, World Telecommunication Development Report 1999 and are per 1,000 people.|
|b Data are from the Internet Software Consortium ( http://www.isc.org ) and are per 10,000 people.|
|SOURCE: World Bank. World Development Indicators 2000.|
needs. In 1998, electricity was generated mostly by thermal plants, using fossil fuel (63.14 percent), hydropower (33.46 percent), and other (not nuclear) sources (3.4 percent). The country is a major net importer of energy.
The Portuguese energy market in the 1990s was served by 4 government-controlled companies: the partly privatized oil company Petrogal, the partly privatized electricity utility Electricidade de Portugal (EDP), and the 2 gas companies, Transgas (operating the new natural gas pipeline) and Gas de Portugal (GdP). In 1999, the government created a new state-controlled holding company, Gas e Petroleos de Portugal (Galp) by merging Petrogal with the 2 gas companies. This process was aimed at developing an energy group that would be able to compete effectively with larger Western European utility companies in the increasingly liberalized market.
In telecommunications, Portugal is a small market lacking a culture that is particularly technology-oriented. Furthermore, Portugal has a relatively low saturation in terms of consumer telecom services compared with other, more developed EU countries. In 1996, 3.72 million fixed telephone lines were in use, and there were 887,216 mobile phone subscribers in 1999. For comparison, these statistics are quite lower than in Scandinavia, but still higher than in Germany. Portugal joined Finland and Venezuela as one of the only countries where, for various reasons, mobile phone penetration has overgrown the fixed phone market. About 23 percent of Portuguese homes had cable TV in 2000. Although 20 Internet service providers operated in 1999, the Portuguese still lagged well behind most other Europeans in using the Internet. Business and consumer broadband and data faster-access Internet services, popular elsewhere in Europe, are still almost non-existent.
The legacy of the decades-long Portuguese dictatorship with its nationalistic, isolationist economic policies, combined with its comparatively late entry into the EU, has resulted in Portugal's reputation as the EU's telecommunications laggard. The country started implementing the EU services directives to harmonize its telecommunications industry with the markets of its larger, more developed neighbors for the first time in the early 1990s. Portugal liberalized its basic telecommunications services in January 2000, becoming the second-to-last EU member to open its market to foreign competition, and its regulatory regime was set to manage the transition period to free competition. By early 2001, the state-run Portugal Telecom (PT) had kept its monopoly control on traditional segments such as fixed telephony, leased lines, and multi-channel television. The cable television market is still dominated by the PT's cable division (under the brand names of PT, Multimedia, and TV Cabo), which operates a nationwide fiber optic cable network covering nearly 95 percent of the consumer base.
However, PT faces robust competition in newer telecom services in the liberalized market environment. While PT's basic fixed line telephone market is considered rather dysfunctional, under-developed, and shrinking, its strongest competitive advantage is TMN, its mobile service operator and only serious business presence in non-traditional markets. Competition in new service segments started gaining ground when the second mobile phone operator, using the European GSM system, was launched in 1992. The liberalization of the data services market in 1994 led to several new data service entrants. Competition in non-traditional services has forced PT to reinvigorate its efforts to secure its thinning margin of leadership in market share in these segments. In January 2000, with the entry of 8 new basic services operators, competition entered the traditional market.
In 2000, the government filed for EU approval to privatize a 34 percent stake in the TAP airline, demonstrating its intention to sell it to Swissair. Other deals in the government's ambitious infrastructure privatization program include a 20 percent share in the state electricity giant EDP and the last 10 percent of state-owned stake in national telecommunications company PT, which was sold to foreign investors in 2000. In 2001, the privatization of the state's remaining 15 percent stake in the expressway operator holding, Brisa, is expected, as well as the partial privatization of the energy holding company Galp, one-third of which has already been bought by the Italian energy group ENI. However, the government's handling of the TAP, EDP, and Galp privatizations has turned highly controversial, and political and legal inquiries into the matter could delay further privatization steps.