Rates in Malta above EU average

Maltese consumers are paying much higher rates than their European counterparts when using mobile phones, according to a report published in Brussels yesterday.

The 2009 progress report on the Single European Electronic Communications Market reveals that Maltese consumers are paying an average of 24c per minute for speaking on their mobile phones compared to the EU average of 13c per minute.

An EU official said the rates for mobile phone calls in Malta were by far the highest in the EU and the European Commission had already signalled this to the Maltese authorities "on various occasions".

While not contesting the figures, the Malta Communications Authority felt it had to point out that the rates of mobile phone calls dropped in 2009 with the emergence of Melita as a third player in the field.

Though admitting the decrease still put Malta's rates above the EU average registered in 2008, the MCA said that, according to its calculations, the average price per minute dropped from 24c in 2008 to about 17c last year.

The MCA also pointed out that European rules precluded it from intervening directly in the market at a retail level. It did not refer to its decision on mobile termination rates (MTRs), wholesale charges operators make to connect calls to each others' networks.

According to the Commission, the main reason behind Malta's high mobile call rates seemed to be the level of MTRs set by the regulator. These charges are much higher than the EU average and are finally paid by the consumers.

Although the Commission had advised the MCA to lower such rates, it had decided otherwise.

According to the Commission's report, the MCA proposed to continue to set symmetric MTRs and introduce a glide path linked to the change in the average MTRs adopted in the EU27. However, it was also proposed that the change to the MTRs in Malta could not exceed an increase or a decrease of 10 per cent per annum. Based on this price control mechanism, the previous rate of 9.62c was cut to 8.66c with effect from June 15, 2009 until June 15, 2010, which was still higher than the EU average.

The EU report quotes an MCA survey conducted in June 2009 indicating that a large majority of telephony consumers did not know how much it cost to make a fixed or mobile call.

According to the survey, 79 per cent of fixed line customers do not know how much it costs to make an off-net fixed call. In addition, 75 per cent of mobile phone pre-paid customers are unaware of the costs to make a minute's call from a mobile phone (74 per cent for post-paid customers).

Despite the price issue, mobile penetration in Malta is still on the increase, reaching 101 per cent last October, up from 94.5 per cent a few months earlier. Only France and Slovakia have a lower penetration rate when compared to Malta.

With regard to other components of communication in Malta, the EU report shows the island last year managed to increase its broadband penetration rate to 26.8 per cent, above the EU average of 24.8 per cent.

Fixed telephony continues to be the most commonly used form of communication on the island. By last July, Go still had the lion's share of the fixed line market at 78.4 per cent but this is declining. It was 82.6 per cent just six months earlier.