20000411

Internet millions

flooding into

tiny Tuvalu

AUCKLAND: Tuvalu, the world's smallest economy, is on track to become among the richest per capita nations thanks to its Internet domain name, dot TV, Communication Minister Sam Teo said on Monday.

In a country of just 10,600 people with gross national product per capita of 400 dollars, Tuvalu is now guaranteed 50 million dollars through the sale of its Internet name to a US firm.

It is already receiving one million US dollars a quarter from its windfall.

Once Tuvalu receives the 50 million US dollars, at current rates in 12 years, a new deal will be negotiated, the minister said.

Teo said the country had already banked 15.5 million dollars in the past nine months, firmly ending speculation that the Polynesian nation was being conned.

Its annual budget seldom reaches 14 million dollars and one of its biggest export earners pulls in about 1.2 million dollars a year from renting out telephone numbers to sex-line operators.

Teo said the tiny state had so far received three quarterly payments, as well as a one-off payment 12.5 million US dollars through a call option.

"It is working according to expectations," Teo said in an interview from Funafuti.

Teo said it was "not too bad" for a country like Tuvale. "We really need the money. We have a lot of things we want to do. We want to build a decent hospital, a decent wharf.

"We've been using gravel roads all this time. It's going to cost us four or five million to do up the roads. It's money that is going to be well spent.

"All the outer islands have no electricity, there is only one island that has electricity and it is this one".

The badly needed income has not come without some sweat and tears over the "tv" suffix.

Two years ago Tuvalu licensed Toronto-based company Information.ca.Corp. to handle the name. The Canadian company's head, Jason Chapnik, promised between 60 million and 100 million dollars a year.

He failed to make the payments and a new deal was negotiated with Idealab, a Pasadena Iernet business incubator responsible for online retailer EToys.

In the rearrangement Chapnik sold half his equity, producing the 12.5 million extra payment for Tuvalu, and joined the new board.

Idealab's new start-up, called DotTV, sells electronic mail and web addresses ending in .tv instead of the ubiquitous ".com." Tuvalu owns 20 percent of DotTV.

The company told the Los Angeles Times that most of its .tv names will sell for several thousand dollars apiece, but some could go much higher.

A Tuvalu member of parliament, Koloa Talake, represents the country on the board.

"We were very, very, very poor, but now are getting some money from the marketing of assets like .tv," he told the newspaper.

"We are very lucky to strike such a deal. We will be able to build things we would otherwise not be able to build. I know there are some countries here in the South Pacific that are very jealous".

DotTV chief executive Lou Kerner told the LA Times he was confident he can succeed.

"It'zh;t recognisable two-letter symbol on the planet," Kerner said. "When you marry 'dot' with 'TV,' you become something very meaningful (on) the Internet".

Recently hailed by the US State Department for being "egalitarian, democratic and respectful of human rights," Tuvalu has a troubled future.

Global warming will lead to the rising ocean swamping its nine atolls, none of which are more than seven metres (yard) above sea-level.ÑAFP