OFC asked to look into bandwidth accord with ISPs

The Office for Fair Competition has been asked to intervene after Vodafone Malta claimed that a recent DataStream agreement with a number of Internet Service Providers was a breach of competition rules.

Sources close to the industry told The Times that Vodafone was incensed after learning that the broadband services provider, DataStream, an offshoot of Maltacom, had signed a four-year agreement with eight of the 17 ISPs for the provision of bandwidth services.

The OFC has been asked to investigate whether the agreement was legal and if it breached competition regulations. The Malta Communications Authority has also been brought into the issue.

Vodafone started laying a high-capacity fibre optic cable between Malta and Sicily last May, providing a second international communications gateway.

The €10 million investment, which is expected be up and running next month, will enhance the country's international telecommunications infrastructure.

Vodafone's new international gateway will have an initial capacity of 2.5 Gbits per second, split between voice and IP data. The cable will have the potential to increase the capacity to over one Tbit per second.

Speaking during a ceremony that day, Prime Minister Lawrence Gonzi said he was keen to see prices being slashed because of competition, since this would be to the benefit of the customer.

Sources told The Times that DataStream had served the ISPs with an attractive offer to draw them into the agreement, through which the ISPs obtained a bandwidth of 90 megabits, plus an additional 65 MB "promotional bandwidth".

DataStream chief executive Godfrey Vella would not be drawn into giving the details of the agreement, saying this was commercially sensitive.

"All we can say is that the ISPs are independent parties and we didn't force anybody to sign any agreement that they didn't want to sign. Our aim ultimately is to improve both quality and price to the consumer," Mr Vella said.

Besides, he added, the agreement did not prohibit any of the ISPs from purchasing bandwidth from another operator.

Mr Vella said the bandwidth available to Malta had exploded from 8 MB to 622 MB.

But one industry source said the agreement would probably translate into better connection and speed rather than more attractive prices for the consumer.