Maltapost has an essential role to play in promoting e-commerce, especially for local companies selling to local customers – and its rates for bulky mail could be a deterrent, the executive chairman of the Malta Communications Authority, Edward Woods, has warned.

He has a clear vision: to increase e-commerce in Malta, where only one in five businesses sells over the internet.

“Yes, 78 per cent purchase over the internet, up eight per cent over two years. What I am worried about is that the Maltese purchase from abroad and not the local market. Why should I have to pay so much to have bulky mail delivered? And why should the process be so cumbersome?

“They [Maltapost] are working on this very seriously, introducing lockers which are accessible 24/7, a network which they plan to enlarge. But it takes time. The trick is to move as fast as you can,” he said.

“For those retailers that handle delivery themselves, it is not an issue, but for those who rely on normal mail, that is where Maltapost comes into play. It has an essential role in promoting e-commerce. It knows it and we make it very, very clear that unless they pull up their socks, they will end up as a nonentity. Local mail volumes are down and falling.”

Dr Woods explained that the high cost of delivery is not a problem unique to Malta, as e-commerce tends to favour the country where the order is originating. So a British retailer would offer favourable arrangements to get merchandise delivered in the UK, for example.

However, when the order is cross-border, the cost of that delivery involves the postal entities in both the dispatching and the receiving country, something which could in some cases be negotiated on a bilateral basis – which is much harder for Malta to do than, for example, China.

Another aspect that he stressed was the use of mobile as he fervently believes that e-commerce of the future will no longer be over the internet.

“Our survey found that 59 per cent access internet via mobile phone but when you analyse by age, it is almost 100 per cent. So we do expect that rate to go up and up.”

He also mentioned payment portals and an online presence as limiting factors, which is one reason that the MCA is trying to encourage retailers to treat their websites as virtual shops.

“If you went into a shop, you would be obliged by law to display the price. It should be the same online. I would like to see a portal with all the information there! If you sell shoes, I want to see the styles, the sizes, the colours, and the prices! Why should I have to come to your shop to find out the price? I would buy so much more if the information were already available,” he said.

Forget the hopeless bureaucracy... The point is that our bite is much stronger as we are there from ex ante to ex post and the powers we have regarding fines for contracts really make things change for the better

Dr Woods, who first joined the MCA on a part-time basis nearly four years ago, was clearly frustrated by his inability to do anything about this. For many years, the MCA’s hands were tied by its role as a pure regulator of the postal and telecommunications sector, but in 2014, the law was amended giving it more of an enabler’s role.

In fact, the MCA is tapping into €400,000 through an EU project which will help to create a platform for Maltese craftsmen who want to sell abroad, hoping to foster collaboration between entities that might be too small to do it on their own.

The MCA, which has 71 employees, is also working with government agency Mimcol to find a networking location where a tech society could take seed – with Dr Woods saying that he hoped to announce something “in the months to come”. The MCA also set up a two-person unit three years ago dealing with innovation and research, as he believes that the authority also has a remit to futureproof the sectors, ensuring the economy is not stifled by lack of infrastructure – whatever that might look like in the decades to come.

However, there is another role that he thinks the MCA should adopt: consumer protection – which will bring it head to head with the Malta Competition and Consumer Affairs Authority.

He argued that the MCA was able to impose hefty fines on service providers – with regular €10,000 for breaches of contract – which “really bite”.

“We have felt on a number of occasions that we are the right authority to deal with certain aspects involving the consumer. As it is, we are very limited as to what we can do for them when it comes to service standards, and are only involved when there is a breach of contract.

“The consumer comes to us and we send them to the relevant authority – the MCCAA – which comes back to us for our opinion, which we send back to it, which then decides.

“Forget the hopeless bureaucracy... The point is that our bite is much stronger as we are there from ex ante to ex post and the powers we have regarding fines for contracts really make things change for the better.

“I believe in my personal opinion that communications, which is so important, should be dealt with by one regulator and authority, just as financial services is.

“It would be very simple to change the legislation. If necessary we could have joint jurisdiction with the Malta Competition and Consumer Affairs Authority.”

Who will pay for roaming?

The EU announced a week ago that roaming fees should be history by mid-June, thanks to a steep drop in maximum wholesale roaming prices – the charges telecom operators pay each other when their customers use their mobile phones abroad.

Although the deal still needs to be confirmed by the full European Parliament and member states, there are still hurdles, the main one being who will foot the bill as telecom operators still need to pay each other to keep their customers connected abroad.

For Maltese operators, the quandary is compounded by the loss of revenue from roaming, with consumers worried that they could try to raise local rates to make up for this.

MCA chairman Edward Woods said that whether they have to raise local tariffs depends on what arrangement they can reach with the provider of the country where the client is calling from.

“Vodafone has no problem as it has a network across Europe so what they lose on one side, they would gain on the other. GO has also got agreements with some of the best operators in countries across Europe, and can agree on a rate so that they do not lose out locally. Melita is going to solve the matter in a different way – but I will leave it up to them to reveal how,” he said.

One of the unintended consequences of roaming could have been for consumers to buy a service from the provider in another country where rates were lower than Malta’s – but this has been curtailed through the so-called ‘fair use’ policy.

“The Nordic countries have very well priced tariffs. So strictly speaking you could apply for a mobile in Finland, paying the Finnish tariff, which is a pittance, and use it in Malta as there would be no roaming fees.

“That would kill local operators, which is certainly not something we want! So there are safeguards built in, restricting your use of that tariff to 90 days, for example, and once that period is up, you would need to pay the local rates.

“We need to keep the operators we have and we need to make them stronger. Vodafone is stronger in mobile, GO in mobile and broadband, and Melita is very strong in broadband and television. So we don’t really have three operators strong in all the sectors. We don’t want more operators – but we certainly do not want fewer,” he said.

It is not all doom and gloom for operators though, as all three bid for channels in the 800MHz spectrum, which was only freed up less than a year ago after diplomatic efforts to oust foreign operators using it illegally.

The spectrum will be in demand as it is a very strong signal – reaching much further, including through thick walls. It will also generate considerable revenue for the government.

Dr Woods said that following receipt of the three bids a few weeks ago, it was now a question of allocating the six channels on this frequency – one of which has legacy issues that will need to be solved.

“This will be – relatively speaking – the least popular one as it involves some outlay and some months’ delay! But we hope that the parties will agree between them on who will have which channels. If not, we will have to auction them off but I am confident that we will not have to resort to this,” he said.