Bid for third mobile phone operator under study

Competition in the mobile telephony market could increase further if the Malta Communications Authority grants a licence to a third mobile operator.

Presenting the authority's annual report during a press conference yesterday, MCA chairman Joseph V. Tabone said, when asked whether there was room for other mobile operators in the local market, that a third licence may be issued in the coming months. An application for such a licence is still in the process of due diligence.

Another option is the entrance of mobile virtual network operators into the market. Such operators will offer mobile telephone services without the need of implementing their own infrastructure but instead will buy wholesale services from existing network operators.

"The market will determine whether there is space for a new operator in the long term," Mr Tabone said.

In 2006, the sector continued to expand as mobile phone usage had seen a jump of almost 23,000 new subscribers over the previous year to reach an 86 per cent penetration rate. SMS usage registered a substantial increase over the previous year to reach half a billion SMSs. In other words, every mobile phone owner sends and receives an average 89 SMSs a month.

Mr Tabone said 2006 was a landmark year in other communications sectors such as local fixed telephony and television rights transmission networks.

Broadband penetration increased and VoIP continued to play a pivotal role in the market for international fixed minutes.

Last year also saw a spate of innovative services being introduced including bundled offers like, for example, a single subscription for TV, internet and telephone services. This had happened as a result of interconnection agreements reached between operators following the MCA's intervention.

Since it was ruled, in May last year, that people may switch between telephone operators keeping the same number, some 15,000 subscribers had taken up the option.

A survey on e-commerce revealed that 27 per cent of the population shop online and 55 per cent of these do so on a regular basis.

In the postal sector, progress had been made as next-day delivery had reached more than 92 per cent.

Two major factors dominating the MCA's activity in the period under consideration were the market reviews and the relocation to new offices at the Valletta Waterfront, Mr Tabone said, adding that there are 18 designated markets to be analysed regularly. Such market reviews measure competition in a sector that has traditionally consisted of a triad of monopolies.

Through liberalisation of the sector, consumers had obtained cheaper prices. Thanks to competition, the sector's total turnover had increased drastically over the past seven years from approximately Lm80 million in 2000 to Lm120 million worth of economic activity - about five per cent of GDP - last year.

Mr Tabone said the MCA's primary objective was the promotion of competition, ensuring sustainability of the market and maximising consumer welfare.

He said electronic communications in particular were one of the major underpinnings of today's economic and social development.

A copy of the MCA's annual report 2006 can be downloaded from the authority's website www.mca.org.mt.