Three-year price cap proposed for fixed line calls

A consultation paper published yesterday by the Malta Communications Authority proposes the establishment of a price control mechanism on Maltacom's fixed telephony services retail tariffs.

The proposed price cap mechanism, which would cover a period of three years, would control the tariffs that Maltacom charges for connecting customers to its network, retail line rentals and for local and international calls over the fixed network.

The consultation paper also details the principles underpinning the MCA's proposed strategy for Maltacom's rebalancing of its tariffs towards the underlying cost of provision.

MCA chairman Joseph V. Tabone said price control was an important mechanism in ensuring consumer protection.

Equally important was the process of tariff rebalancing which was a critical element in securing efficient market entry for new operators and the continued sustainability of Maltacom plc., he said.

Mr Tabone said it was vitally important to consider the views of all interested parties on such an important matter, which touches all consumers, before reaching any decisions.

He said the authority wanted to examine all aspects of price control including the need for continuing control, the scope, form, level and duration of any such control.

In effect, the proposals outlined in the consultation paper would require Maltacom to potentially reduce its retail prices in real terms for a pre-established basket of services over the price control period.

The MCA said that this could afford significant benefits to the Maltese economy in general through reductions in the overall cost of fixed telephony services, increasing national competitiveness and limiting inflationary effects in the process.

The document may be viewed on MCA's website www.mca.org.mt. Copies may be obtained free of charge from the authority's offices in Tower Road, Sliema.