Maltanet - the power of two

Merging the businesses of maltanet and Datastream has been less of a headache than it potentially could have been, according to chief executive officer Keith Fearne.

Speaking to The Sunday Times last week ahead of the announcement on Friday that the merger, which was filed last August, is "on track" and set to be complete by the end of the year, Mr Fearne said there was not much duplication between the two Maltacom subsidiaries.

Both are growth businesses within the group with 2004 results showing revenues of around Lm4 million, on an asset base of close to Lm2.5 million. Both are profitable, showing double digit growth and this, according to Mr Fearne, is set to continue.

Speaking on the new merged company's mission and philosophy, he said: "Our mission today is to be the IP (Internet protocol) and broadband arm of Maltacom. Our main philosophy is to be best at everything we do.

"We are focused on the markets we think we can be best in. We insist on having a culture of excellence and we have done a lot to insist on the need to continually do better."

The decision to adopt the maltanet logo, incorporating elements of Datastream, followed intensive market research and even some focus groups. The swirl has attracted a lot of attention, with some associating it with the power of two.

Broadband is not just Internet connectivity, but will soon be able to deliver a complete package of voice, data and video connectivity, he said, bringing together communications, education, entertainment and e-services in a convenient package.

Broadband Internet connections have recently been upgraded to 2 MB for both home and business users, with the speed of that connectivity going up in the coming years. "Now the broadband Internet revolution we envisaged a few years back is really starting to happen," Mr Fearne observed.

The maltanet offer is about quality, he insisted. "We always want to be associated with quality and will do our utmost to ensure the level of quality is in this high bracket. At the same time, we are offering an affordable product. The days of dial-up are limited.

"We offer quality in the product and quality in the delivery. Every month we need to re-sell the product. Customer contact is important, and we are taking the customer very seriously. We are very proactive in HR and customer care and even won the ETC's Performance in Management Satisfaction Award, which we are very proud of.

Innovation is seen as the key to enable maltanet to take the lead. "We carry out a lot of research and development internally. We were the first to offer a 2 MB connection, and an always on product for under Lm10 a month."

Last month, he recalled, maltanet celebrated its 10th anniversary. It was set up as the Internet service provider (ISP) of the then Telemalta, with private investors. These were later bought out so that Maltacom took over full control of maltanet.

In 2000 the regulatory framework changed and the company was bound to separate its wholesale and retail operations.

So Datastream was set up to handle Internet bandwidth and connectivity at the wholesale level. In November, 2004, following Malta's entry in the EU and the adoption of EU legislation, Maltacom was no longer obliged to maintain two separate subsidiaries. So last August, it filed for the merger.

There was not much fat to cut in the merged company for the total staff count is about 110. The merged Maltanet is now operating under one roof from its premises at the Dolphin Centre in Balzan.

The new merged company is "more compact" with the few repeat set-ups, like customer care, integrated under one roof. The two customer care teams have been brought together and the merged company currently employs almost 40 in this area.

"Maltanet can therefore offer a better service and even extend the hours its customer service people are available to give the customer a better service," Mr Fearne said.

"These are divided among the front office, where a growing amount of people go personally to pay their connection subscription; the call centre, which tackles technical problems, like support calls and problems with settings, or passwords, this support is given at no cost; and field support. We are now looking at further areas of synergy."

A lot of the broadband access equipment is located at Maltacom's exchanges, with main routing equipment located at the Birkirkara exchange. Some equipment is at maltanet's premises and there is equipment at other locations for disaster recovery purposes.

There was quite a distinction between the two subsidiaries, with both having business customers at different levels. Datastream also had several large corporate IP and Internet customers, which Mr Fearne considers very important. "We intend to grow this, investing and supporting the idea of a knowledge economy."

Maltanet still has a clear legal obligation to sell broadband Internet wholesale to the local ISPs, ensuring there is a level playing field. This EU-based regulatory framework is quite well established. "We will abide religiously by this. We intend to play fairly and by the rules."

With 10 per cent of market penetration for broadband Internet connections, Malta is at the EU25 average. The Scandinavians are way above at 25 per cent, so Mr Fearne sees scope for further growth and higher usage.

Apart from driving up traffic through Voice over IP (VoIP), he said customers could now watch TV, download music and browse the Internet on their computer.

He mentioned research, which showed that TV audiences are starting to shift to watching TV on their computers and there is also a trend to browse the Internet, chatting on-line, while watching TV.

Maltanet's Internet portal, di-ve.com, will be six years old in February. "It was an experiment to see where Internet content would go," Mr Fearne said. "It is going from strength to strength. Di-ve.com is maltanet's Internet eyeballs.

"Surveys continue to show that di-ve.com is Malta's favourite Website. This is because of its content, breaking news and its interaction with its users. If some incident occurs, we receive immediate feedback and a gallery can be put up in minutes.

"There is a feeling of community not just from the Maltese diaspora but also from ex-pats living and working in European capitals like Brussels. Di-ve.com is a very important asset and we intend to continue to leverage it."

A new service that is in demand is the co-location facilities. A large area in the premises in a special, controlled environment is 'rented' out so that businesses with mission critical computer equipment can take up space there. Maltanet's premises, he said, are ideal because it is also closest to the broadband Internet source, reducing the distance between the points.

Apart from local customers, this service has also attracted customers in the online gaming industry, some of whom have already set up shop in Malta. Maltanet has already attracted some 10 of these customers. "We are happy with the feedback so far," he noted.

Maltanet sees so much potential that it recently took a stand at a European iGaming conference in Nice, where even more interest was generated.

This is also in line with Government policy and the Lottery and Gaming legislation has ensured that Malta has a unique selling proposition. "We are not sure how long it will take for other jurisdictions to catch up but maltanet is doing what it can to exploit this time window."

Looking to the future, Mr Fearne said the focus is on taking broadband into every home in Malta and Gozo. "We are offering a triple play environment, with voice, video and Internet connectivity. On top of this is mobility about the house. We are seeing a lot of multiple users in the same house.

"Price has always been important for maltanet. Charging under Lm10 to be always on was a breakthrough. We are in line with the rest of Europe in terms of pricing."

Mr Fearne looks forward to an exciting future. "We are full of energy. We have a strong, young team and we have worked hard on the HR element. This was taken as a challenge and an opportunity - and we are already seeing results."