Melita Capital plc, a Melita company, will tomorrow launch a €25 million bond issue to support further expansion of the communications group's products and services, chief executive officer Stephen Wright told The Sunday Times.
Public subscription to the bond issue opens towards the end of the month. There is an over-allotment option of a further €5 million. The five- to seven-year bonds will bear a coupon of 7.15 per cent, with interest payable every six months.
The wider expansion of all Melita's four services - TV, mobile, internet and fixed telephony - comes after the completion of an ambitious €50 million investment programme designed to develop the foundations on which Melita plans to build a platform of technologically advanced services and grow its market share.
The programme included the design and installation of a state-of-the-art Ericsson mobile network and the laying of a €10 million fibre-optic submarine cable connecting Malta to the rest of the world.
"This is an opportunity for investors to put their funds in a technology and entertainments company and to diversify their portfolio," Mr Wright said. "Investors should look at our growth track record. We are not a very large company clinging on to our market share for dear life. We are a small company that is growing. We are No. 1 in TV and internet services. We leverage our assets and our infrastructure to our advantage and to our customers' advantage."
Asked whether the economic slowdown had impacted Melita's business, Mr Wright said demand for services remained high - "customers do not switch their TVs or talk or surf less". Additionally, more customers were opting to bundle all four services with single billing taking advantage of discounts across all offerings.
Melita Mobile was launched in February, promising value and uncomplicated tariffs. Thanks to talk and data rates that were up to 30 per cent cheaper than the two competitors' prices, Melita Mobile claimed over 25,000 subscribers and five per cent market share in six months.
Mr Wright pointed out that most European operators would require up to two years to achieve that kind of market presence. Admittedly, the take-up of Melita's mobile services was "above and beyond expectations" with several thousand people signing up in the first few weeks alone.
The operation ran into teething troubles with customers complaining of poor coverage in some areas. Mr Wright explained that feedback from customers had helped the company fine-tune the operation nationwide, and measures have been taken to optimise the service. Melita Mobile is now preparing to launch a business offering for corporate customers.
More than 50 per cent of Maltese households are currently subscribed to Melita's cable internet. The company has been able to fulfil its pledge to offer better value for money and recently doubled customers' internet speeds for free. Several thousand subscribers are now enjoying speeds of up to 50 Mbp.
"Customers are getting 150 per cent more for the same price," Mr Wright explained. "We were originally buying our internet capacity from the competition and we were very restrained. Now that we have our own submarine cable, we are able to be more competitive on internet rates in all markets. The reason that cable is better from an internet point of view is that it was idealised for TV. TV carries a lot of content. Customers are demanding more speed and Melita is very well placed to provide them with that."
The wholesale and business market is where Melita intends to grow further and it is now preparing to compete for large-scale contracts. The company has just won a multi-million euro contract from Dante, an EU-funded operation, to supply the University of Malta with international bandwidth.
Mr Wright said Melita would continue to invest in new TV products - the latest premium products are accessible to even more subscribers as the migration from analogue to digital is now 62 per cent complete. Demand for top-end services like sports subscriptions was on the rise, with customers increasingly opting for exclusive Melita packages that included over 1,000 live fixtures from major European leagues throughout the new season.
In 2007, a private equity and venture capital syndicate composed of GMT Communications Partners, M/C Venture Partners and Blackrock Communications acquired the majority shareholding in Melita Cable for €165 million from its original owners Gasan Group and Liberty International. A Gasan Group subsidiary, Gee Five Ltd, retained a 12 per cent stake in Melita plc.