The Maltese communications market shows signs of maturity

The Maltese communications market is mature and continues to grow and develop in key areas, building on the milestones reached in the last couple of years. The launch of new mobile operators, the rise of e-commerce and the drive towards the digitalisation of TV services are the most important trending developments and these can be observed despite claims that local communication services are not among the cheapest in the EU.

This is the picture painted by the communications market review for the period July-December 2009 published by the Malta Communication Authority.

The maturity of the Maltese communications market, exposed in recent interviews carried by i-Tech with top executives of the main communications operators, is now confirmed in figures.

The fixed-line telephony sector registered further growth in the second half of 2009, with increasing take-up and stronger traffic volumes. Indeed, fixed line subscriptions reached 244,916 in December 2009, up by approximately 1.6 percent over the previous December. Fixed line traffic volumes increased both in terms of voice calls and voice call minutes, which increased by approximately five per cent and 8.8 per cent respectively.

The most interesting thing to note here is that despite the claims of the supremacy of mobile telephony, over the years fixed-line telephone has remained strong and a new impetus was felt with the introduction of packages that encompass two, three or four different communication services, namely fixed-line telephony, mobile telephony, internet and TV, from the same company. Indeed new fixed-line telephony subscriptions as part of a four-play (four services) package doubled in this six-month period.

Mobile telephony subscriptions reached 422,083 as at the end of December 2009, representing an increase of approximately 9.5 per cent over the corresponding figure for 2008. Post-paid mobile subscriptions accounted for 18.6 per cent of the total. The increase in the number of mobile subscriptions translated into a higher mobile penetration rate for Malta, from 93.2 per cent as at the end of 2008 to 102.1 per cent at the end of 2009. This is a milestone for Malta, as the number of subscriptions surpassed that of people living in the country.

In terms of traffic (voice and SMS) increases were also registered during this period. It seems the use of SMS has recovered after the dip registered in 2008 that was the result of offers promoting voice mail.

The most important thing to note is that the entrance of new players during the year is the launch of Melita Mobile (a national mobile network operator or MNO) and other smaller mobile virtual network operators (MVNO). This has led to a record number of portings, i.e. users changing operator but keeping their mobile number. In 2009 there were 59,500 portings, or 1.7 times the number registered in the previous year. The biggest portion was done in Q1, when Melita Mobile launched, but the high volume was sustained throughout the rest of the year.

The entrance of Melita Mobile in the market has shuffled the cards a bit. Vodafone lost its position of absolute dominance of market, and its market share was down to 49.6 percent at the end of 2009. However it still generated 53.8 per cent of outgoing mobile minutes. Go Mobile was also down to 43.2 per cent compared with 45.9 per cent a year earlier. At the end of 2009, Melita Mobile accounted to 5.6 per cent of all mobile subscriptions registered at the time. Despite this number, last December Melita Mobile had admitted it had not achieved its target in terms of growth. Redtouchfone, the surviving MVNO, accounted for the remaining 1.7 per cent of market share, which was stable after a dip earlier in the year.

The new mobile operators not only brought more choice but also led to more consumer complaints. In fact the MCA revealed that during the last six months of 2009 the authority received 142 complaints on electronic communications, with these being predominantly linked to the mobile sector (54 per cent compared to 40 per cent in the previous six months). Quality of service and billing were the two issues that led to most complaints on communication services.

Pay TV subscriptions during 2009 continued to grow, reaching 139,336 as at the end of the year. In the last quarter of 2009, around 20.9 per cent of local households had the possibility to access TV broadcasts via the analogue terrestrial platform, and a further 12.8 per cent had access to TV broadcasts via the satellite platform. The households still watching analogue digital terrestrial will have to switchover to digital terrestrial by December 31 of this year, as Malta will move to exclusively digital terrestrial TV transmissions. As expected, the only decline in subscriptions was registered under the analogue cable platform, from 48,448 as at the end of 2008 to 29,100 as at the end of last year.

The next report by the MCA covering January-June 2010 will include, for the first time, HD TV subscriptions, as Melita has just commercially launched its service.

Internet subscriptions amounted to 111,543 by the end of Q4 2009, including 110,849 broadband subscriptions and 694 active dial-up subscriptions. Broadband subscriptions increased by 9.8 per cent over the corresponding figure in 2008, with the broadband penetration rate reaching 26.8 per cent, which is slight above the EU average. The biggest shift here was registered in terms of speed, with the bulk of subscriptions moving from the two to four megabit bracket in 2008 to the four to six megabit bracket by the end of 2009.

In terms of internet market shares as at the end of 2009, Melita accounted for 48.9 per cent of all broadband subscriptions, Go accounted for 44.6 per cent, Vodafone to 3.1 per cent, and the remaining 3.4 per cent were accounted for by subscribers to third party ISPs, SKYNet, and Vanilla Telecoms. Melita lost its position as the absolute market shareholder, losing ground to Go which saw a substantial increase in subscriptions thanks to the absorption of smaller ISPs in early 2009. Broadband wireless access through the WiMax technology saw a marginal increase, confirming it still has not caught up people's imagination.

In terms of e-commerce, there was a significant increase in Maltese users' willingness to buy from online retailers. The MCA's e-commerce survey published in September 2009 showed that 69.3 per cent of respondents claiming to having made regular use of the internet also reported having made an online purchase in the previous six months to September 2009, up from 50.3 per cent in September 2008 and 47.2 per cent in September 2007. Nearly 41 per cent of respondents claiming at least one online purchase in the previous six months, reported having spent between €25 and €120 on their online purchase.