Maltacom still making competition difficult

The European Commission believes Maltacom is still making the life of its competitors almost impossible, at least in the fixed telephony market.

An analysis by the Commission of the telecoms market last year also highlights the need for the national regulator, the Malta Communications Authority, to be given more authority and to act faster.

Commenting on the fixed line market, not the most prosperous business sector in today's telecoms industry, the Commission said Maltacom has maintained its dominant position in local access, local calls and fixed-to-mobile calls, with market shares in terms of revenue close to 100 per cent.

The Commission, however, states that there might be some regulatory issues related to this sector. Despite an MCA decision in December 2005 reducing the average call termination rate of Maltacom by 33 per cent, until last October the rate for call termination of €0.019 was still among the highest in the EU and twice as high as the EU average.

"Combined with the relatively low retail charges of Maltacom, it is difficult for any prospective newcomer to compete," the Commission said.

Brussels also levelled some criticism at the regulator, stating that the practical application of remedies and market review delays appear to hinder market developments.

"Malta has not finalised the first round of market analysis and has been rather slow to adopt final measures on the markets analysed," it said.

According to the Commission, the MCA also needs to have more teeth, as it seems to have limited sanctioning powers in access and interconnection related issues. "The law establishes limits for financial penalties and these are at a relatively low level in certain serious instances of non-compliance," it said.

The Commission also criticised the appeals process, calling it "a worry".

"The duration of the appeals against MCA decisions is seen as a serious problem by stakeholders."

According to the report, a number of appeals are awaiting final decision by the Appeals Board and these include cases that have been pending for over two years.

On a positive note, the Commission comments that Malta posted rather good broadband penetration rates last year, although the growth rate decreased and the incumbent strengthened its retail market position.

While fixed and mobile communication users still have a limited choice of operators, one of the mobile operators launched 3G services. The Commission said that technological developments and convergence have brought a number of innovative services to the market.