Further to the publication of the 13th implementation report by the European Commission, I refer to the article entitled More Telecoms Competition Vital For Malta (March 20) and would like to comment as follows:
The article reports on the European Commission's comments on competition in the Maltese electronic communications sector. With regards to the fixed telephony sector it states that "there is certainly room for more competition as the incumbent, Maltacom, continues to be dominant with a 98 per cent market share".
In the interest of viewing this quote in the right perspective, it needs to be noted that since liberalisation of the fixed telephony sector in 2003, three new service providers, namely Melita Cable, Sky and Vodafone are offering fixed telephony services in competition with Go. This means that Maltese consumers have a choice of three different networks when it comes to fixed telephony. Network based competition is acknowledged to be more robust and enduring than service based competition, which is generally the case in other member states.
The figure cited by the Commission relates to market share on the basis of revenue as at December 2006. A comparable figure for 2007 is not yet available, however, when measured on the basis of subscribers, Go's market share as at end September 2007 stood at 88 per cent. This shows that competition is working.
Our trend line in this area is consistent with those of other developed countries following liberalisation. The trend follows a different line for lesser developed countries who have liberalised the sector and where fixed penetration was more modest at time of liberalisation.
With regards to the mobile telephony sector, the EU report states that Malta's penetration rate of 91 per cent is one of the lowest in the EU member states. We at MCA are of the view that this is quite respectable. A figure above the Maltese penetration rate is generally indicative of subscribers having two or more SIM cards or the use of SIM cards in equipment.
The report also refers to the broadband market and comments that the current situation where the market is characterised by two large players and a number of alternative service providers which are fast losing market share "may not be beneficial to consumers particularly when it comes to prices". In this regard, it is pertinent to note that in December 2006, the MCA wanted to impose the same access obligations on Melita as those prevailing on Go (Maltacom). We felt that this would be best for consumers and for broadband retail prices in Malta as it would ensure that the alternative service providers would be able to gain access to either Go or Melita's network thus strengthening competition. The Commission disagreed with the MCA on the grounds, among others, that the level of retail broadband prices in Malta did not appear to be particularly high.
The report also goes on to say that there may be some uncertainty in this market as the MCA has not yet concluded the analysis of the broadband market.
This delay is a consequence of the disagreement between the MCA and the Commission referred to above. The MCA will be concluding its analysis of this market, which has proven to be particularly complex, by the end of this quarter.
With regards to the Maltese broadband penetration rate, the report quotes a figure of 16.9 per cent as at the end of 2007 and remarks that this is below the EU average. For the sake of accuracy, we wish to clarify that the figure reported by the Commission excludes Melita Cable's 128kbps connections, which were upgraded to 2Mbps in November 2007. When one includes these connections the penetration rate as at end December 2007 grows to 20.42 per cent and is, therefore, just above the EU average. This figure is expected to increase significantly following the implementation of the Blueskies initiative.
The purpose of this letter is to more accurately reflect the telecoms sector state of play in Malta at this particular point in time and the MCA's factual assessment of aspects of this as against conclusions in the report. In summing up we can boldly state that this sector has come a long way since full liberalisation five years ago in terms of competition, service offerings, quality, accessibility and prices.
This is not to imply that having achieved this, the Authority will be resting on its laurels. We remain committed to creating the conditions for change, a climate conducive for sector investment, and the continued provision of state-of-the-art services that reflect best value for money for consumers and business alike.