Maltacom's tariff rebalancing exercise
The article titled "Assessing Maltacom's investment potential" (October 23) lays the blame at the door of the Malta Communications Authority (MCA) for Maltacom's inability to compete. A similar statement had also appeared in a feature interview with...
The article titled "Assessing Maltacom's investment potential" (October 23) lays the blame at the door of the Malta Communications Authority (MCA) for Maltacom's inability to compete. A similar statement had also appeared in a feature interview with Joe Bugeja, Maltacom's group technical director (The Sunday Times, September 28).
The MCA's shortcoming, it is alleged, is "that Maltacom was not allowed to balance its tariff structure". This is a distortion of what has in effect happened. The purpose of this letter is to set the record straight.
Tariff rebalancing is a structured process involving the alignment of retail prices for the various telecommunications services with the underlying cost of provision. In effect, the MCA has been urging Maltacom to balance its tariffs - this is one of the corner stones of sector liberalisation.
It is intended to ensure that one service is not subsidising another and, thus, hampering competition. In this case, the rebalancing is intended to ensure that the international tariffs are not subsidising local line rentals or telephone calls.
In the early part of this year, Maltacom submitted a proposal to the MCA, the terms of which were not acceptable. This was presented to us on a take-it-or-leave-it basis, with the company refusing to meet to discuss details of its proposal, let alone to justify it.
Under the circumstances, the MCA had no option but to turn down this proposal. Maltacom subsequently appealed from the MCA's decision, which the Telecommunications Appeals Board did not uphold.
Since May of this year, a new chairman at the helm of Maltacom has brought about a refreshing change of attitude in the company's dealings with the regulator.
Tariff rebalancing is back on the agenda and staff from our respective organisations are now working closely to agree on a suitable model and its earliest implementation.
Editorial note: The article in question was based on a review by a firm of stockbrokers of Maltacom's half year financial results.