Dili and a Portugal Telecom-led consortium signed a 15-year concession Friday for the Lisbon-headquartered company to establish and operate the new country's telecommunications systems.

The Timorese minister for transport, communications and public works, Ovidio Amaral, described the accord as "historic", saying it would permit "fixed and mobile telephone services, Internet access, and radio and television transmissions" to every part of the country.

Prime Minister Mari Alkatiri, who also attended the signing ceremony in Dili, said the concession was "crucial" for the country, representing Portugal's largest investment in East Timor and a catalyst for further investments.

Financial figures for the deal were not made public, but Portugal Telecom's (PT) representative in Dili, Jose Rodrigues Jardim, told Lusa the investment was of "many millions of dollars".

Lisbon's ambassador, Rui Quartim Santos, said the concession would stimulate Portuguese investors, adding that "the business and economic sector had been in need of a stimulus and example".

Under the concession, the PT-led consortium, agreed to provide all 13 East Timorese districts with telecommunications services at the lowest possible tariffs within 15 months.

When the 15-year concession expires in 2017, the telecommunications system will be transferred to the government.