Myths and trends of the Maltese communication industry

There are more mobile phone subscriptions than people living in Malta; however the mobile phone has far from killed fixed-line telephony. While mobile users may be complaining of high tariffs in Malta, they have been talking more on their mobile.

These trends emerge from a data report sheet covering the period Q1 2007 to Q1 2010 published by the Malta Communications Authority. The first edition of this sheet, which the authority said it will update regularly, provides a provisional snapshot of the emergence of the Maltese information society.

i-Tech took a closer look at these figures to check for visible trends and whether they confirm or disprove some myths about the communications sector in Malta.

In the last three years two important milestones were recorded, one for mobile telephony and the other for digital TV.

In Q3 2009, for the first time in Maltese history, there were more mobile subscriptions than people living in Malta. At the beginning of 2007 the penetration rate was just 93.2 per cent.

Digital pay TV also witnessed an important development in Q1 2008 when the number of digital subscriptions (65,868) surpassed that of analogue subscriptions (60,893) for the first time in history. Indeed the migration from analogue to digital is the most important trend observed in this particular sector over the last three years.

These digital subscriptions are shared between two technologies, namely cable TV and digital terrestrial TV (DTTV) provided by two separate providers. The number of DTTV subscriptions has increased at a faster pace than that of cable TV over the last three years. However, when you add the analogue cable and the digital cable TV subscriptions together they constitute 65 per cent of the local pay TV market.

While there were no major milestones for internet access, as the number of broadband subscriptions has surpassed that of narrowband (dial-up) before the time period under consideration, the numbers are indeed positive.

Internet access showed strong growth over the past three years, with the number of broadband subscriptions increasing significantly, from around 17 percent in Q1 2007 to 27 percent at the beginning of this year. On the other hand the narrowband dial-up internet access has died, with only a few hundred subscribers remaining.

Q1 2010 witnessed another important development as for the first time in recent years there were more ADSL subscriptions than cable internet ones (55,348 ADSL compared to 54,498 cable). Although not explained by the figures, this can be attributed to marketing efforts and the fact that a number of small ADSL-based internet service providers (ISP) folded-up and migrated their subscribers to the major ADSL ISP in Malta.

WiMax wireless broadband internet access, provided by just one provider locally, continued to increase but very slowly compared to other broadband technologies.

The most noticeable change in the figures for postal services is the slow decline in the number of letters handled each year. The number of bulk items handled is stable but there is a significant increase in the number of parcel items handled each year. This all points to one direction: people as sending less letters and mail as they use more e-mail and other online communication services, while at the same time they are buying and selling more online, thus requiring more bulk/parcel postal services.

The compilation of figures issued by the MCA is also useful to dispel or confirm some myths surrounding the local communication services.

The myth that mobile telephony has killed fixed-line telephony is false. Indeed fixed-line telephony is stable and the number of active subscriptions increased from 214,000 in Q1 2007 to 245,000 in Q1 2010. There is also an increase in number of voice calls and traffic minutes.

The myth that mobile phone tariffs in Malta are high can be only be partially supported by the figures at hand. Despite the users’ complaints, some of them published in this newspaper, the number of mobile minutes has skyrocketed between 2007 and early 2010. In Q1 2007 just under 50 million mobile minutes were registered, compared to the approximately 85 million in Q1 this year. It’s true that the number of subscriptions had increased during this time, but the 26 percent increase in subscriptions is low compared to the 70 percent increase in talk time.

According to the statistics, the average revenue per user (ARPU) of Maltese mobile phone operators was €68.26 in Q1 2010, and this fluctuated around €63 - €68 over the past three years. In contrast, European mobile operators have reported ARPUs in the range of €10 - 40€ depending on the country and the type of service (voice or data). ARPU is going down across Europe as users are using more data and making less phone calls. However one has to keep in mind not just the revenue per user but also the costs, which given Malta’s size are different from continental Europe.

The myth that people are still afraid of buying online can be dispelled by the fact that the number of bulk items handled each year has remained stable over the past three years, in the region of 5.4 million to 7.3 million each year, depending on seasonality. However there is a significant increase of parcel items handled each year, with around 13,000 in Q1 2007 going up to almost 22,000 in Q1 2010. At the same time, the amount of letters has gone progressively down from 5.7 million items to 3.6 million in the last three years.