'More telecoms competition vital for Malta'

The European Commission yesterday acknowledged Malta's continued progress in the telecoms sector last year but noted that both Maltacom (now Go) and Melita Cable are still very dominant in certain areas of the market, particularly the fixed line and broadband services sector.

According to the 13th report of the Single European Telecoms Market, more competition in Malta will be beneficial to consumers.

In the fixed market segment, "there is certainly room for more competition as the incumbent, Maltacom, continues to be dominant with a 98 per cent market share." The same comments were made on the broadband sector with regard to Melita Cable.

"While cable broadband is widespread, the incumbent's (Melita Cable) DSL still accounts for 55.5 per cent of all retail broadband lines. The ISP subsidiary of the fixed incumbent (Maltacom) strengthened its position on the retail broadband market for the fourth consecutive year to reach a market share of 41 per cent," it said.

According to the Commission, this situation may not be beneficial to consumers particularly when it comes to prices.

The report states that alternative internet service providers consolidated last year but their combined market share was quickly shrinking from 21 per cent of all broadband connections to only 14 per cent, mainly to the benefit of the fixed-line incumbent (Maltacom).

Following some decrease in prices, broadband penetration last year continued to rise, reaching 17 per cent. However, this is still lower than the EU average, which last year hit 20 per cent.

Progress was reported in the mobile market sector with penetration reaching 91 per cent of the population. Although high, it is still much lower than the EU average which, in 2007, reached 112 per cent.

The Commission said that the entrance in the market of a third operator should improve the situation.

"Consumers' choice of mobile operators is set to improve following the allocation of the third 3G licence. This may have a positive effect on prices - still among the highest in the EU - and penetration, which grew substantially but, at 91 per cent, remains below the EU average."

According to Brussels, significant progress was made in mobile number portability as portings more than tripled in 2007, reaching 20,000.

The Commission commented also on the regulatory aspect of Malta's telecoms market, the responsibility of the Malta Communications Authority, and said that there remain some uncertainties.

"Malta has not yet completed the analysis of the broadband market, which is causing some uncertainty in the sector. In addition, lengthy appeal procedures continued to be one of the major obstacles to the effectiveness of the regulatory framework. It is not yet clear whether the recent reform of the appeals system has significantly improved the situation."

On a general EU level, the Commission report states that last year Denmark, Finland, the Netherlands and Sweden became world leaders in broadband deployment with penetration rates over 30 per cent at the end of the year.

These EU countries, together with the United Kingdom, Belgium, Luxembourg and France, all had broadband penetration rates higher than the US (22.1 per cent) last July.

Nineteen million broadband lines were added in the EU in 2007, the equivalent of more than 50,000 households every day.

The broadband sector generated estimated revenues of €62 billion and Europe's overall penetration reached 20 per cent.