Telecoms industry burgeons

The electronic communications market had a turnover of nearly Lm100 million last year, making up just over five per cent of the Gross Domestic Product, statistics released by the Malta Communications Authority have shown.

The average Maltese spends two days a year on the phone, sends 90 text messages a month and nearly a quarter subscribe to the internet.

Statistics released during a news conference to unveil the MCA's annual and market review reports show that the communications industry remains one of the economy's most profitable.

MCA senior market analyst Simon Mizzi provided a comprehensive overview of developments of the electronic communications sector in terms of subscribers, usage levels, tariffs and revenues, including comparisons with other EU members.

The figures show that fixed telephony has been affected by higher mobile substitution, especially text messages and alternatives like Voice over Internet Protocol (VoIP).

The past year has seen significant reductions in local tariffs as well as a surge in the number of electronic communications services.

Mobile phone subscribers are fast approaching the 300,000 mark, registering a growth rate of 2.4 per cent. Even more encouraging was the 17.4 per cent growth in internet subscriptions, which at end September 2004 reached 85,652, of which 37.6 per cent are broadband connections.

Mr Mizzi explained that the introduction of a second international gateway had resulted in price drops in bandwidth rates for internet service providers as well as improvements in the quality of service for end users.

Considering that VoIP is a relatively new service on the market, it has certainly made its mark, reaching 8.8 million minutes in the third quarter in 2004 alone - an increase of 72 per cent since September 2003. VoIP currently has half the market share of international traffic.

However, Maltacom's tariff rebalancing exercise resulted in a substantial decrease in international call tariffs and a minimal increase in tariffs charged for local calls.

Compared with the third quarter of 2003, subscribers spent 60 million fewer minutes (28 per cent down) on a fixed line. On the other hand, mobile-to-mobile minutes grew by almost five million minutes in the third quarter of 2004.

At the end of September, the number of cable TV subscribers stood at 102,515, up by 3.6 per cent on the previous year.

Malta is well ahead of other EU countries in terms of text message usage; each subscriber sends about 90 SMSs a month, a 19.5 per cent increase over the same quarter in 2003. Together with Denmark and Poland, Malta had the lowest available SMS tariff in 2003.

Malta's accession to the EU resulted in the implementation of the new EU electronic communications regulatory framework. Consequently, in September, a new legislative framework was brought into force, aimed at promoting competition while ensuring technology neutrality in regulation and introducing new rules regarding the management of radio spectrum.

MCA chairman Joseph Tabone said the investment in communication, coupled with price improvements brought about by competition, had boosted the market in recent years.

Communications regulation had also created the initiative for investment, he said.

Asked about the advent of terrestrial digital TV, Mr Tabone said the consultation process had been carried out and a call for expressions of interest would be issued next month. The MCA hopes to award the frequency by mid-May.

Multiplus, a licensed telecoms operator, has already announced it is geared up to enter the digital field.