The woman at Melita’s head office reception in Mrieħel looked up expectantly when I turned up for my interview with the company CEO, Andrei Torriani. The reception was empty. No one sitting there waiting to resolve bills or generally complain. It is a positive, significant change.
Last year should have been one of Melita’s finest. It had a “double digit” number of suitors clamouring to refinance it – at very competitive rates. It had rolled out a number of innovative products, from Melita Wi-Fi and Melita Wi-Fi Travel to TV Everywhere, all of which were well received. It started the tenfold expansion of its data co-location centre in Madliena. And last but certainly not least, it started to overtake its competitors in various services.
Instead, it got bitten by the very investment that was supposed to make it more customer-friendly.
The strategy worked, and Melita is now a market leader not only in its original stronghold – TV – but also in mobile for residential contracts and broadband. It is even increasing its fixed line subscriber base in the business sector
“We made a massive investment in Customer Relation Management and billing, to upgrade our platform and make it more IP centric. We now have the most advanced CRM and billing capabilities in Malta, not only in the telecoms space but generally in any industry. It allows us to be a lot more efficient in servicing the customer,” Mr Torriani said.
Unfortunately the roll-out did not go as planned and there were considerable complaints. The company bit the bullet and acknowledged its problems, offering a stream of free services to its customers as compensation for their loyalty. The strategy worked, and Melita is now a market leader not only in its original stronghold – TV – but also in mobile for residential contracts and broadband. It is even increasing its fixed line subscriber base in the business sector, he said.
“We are now the fastest growing telecommunications operator in Malta in all key performance indicators like revenue, earnings, customer numbers, households and businesses we serve. We are going in one direction while the other operators are going the other way,” he said.
The new CRM system has given Melita the ability to offer self-care solutions, as well as to monitor problems and their resolution.
“The MyMelita app we developed has been quite successful with over 11,000 downloads in a very short time. It allows customers to view and pay their bills, communicate with our contact centre, monitor data consumption, manage Melita Wi-Fi devices, locate the closest point of sale, top up their prepaid lines and so on.
“If online banking were as simple as what we are offering our customers, everyone would use it! It is quite unique in the market; Vodafone has its own app which is more focused on prepaid services,” he said.
Melita – like all operators in Malta and overseas – had to decide where to invest for the future.
Although it bid for premium sports, it did so “pragmatically”, not really willing to go for rival Go’s jugular. It also decided not to get into a race with Vodafone for 4G – preferring to wait for advanced technology – and it focused instead on Wi-Fi, seeing this as the area with most growth.
“All our investments technology-wise have been oriented towards the convergence between fixed and mobile broadband,” he explained.
Opting for Wi-Fi was a quick win: in Europe 50 per cent of data usage is usually in one per cent of the network, so Melita was able to roll-out 45,000 indoor hotspots and 20 outdoor zones to offer a seamless Wi-Fi service along key areas like the Sliema/St Julian’s promenade.
And unlike the throttled data available from public Wi-Fi hotspots, Melita Wi-Fi is a next-generation service offering speeds on a par with its competitors’ mobile speeds.
“Recent tests show 3G only gets around 16 Mbps whereas we offer 100Mbps outdoors. Speeds are mostly limited by the devices as we can deliver up to 100 Mbps!”
Where both 4G and Wi-Fi are available, he believes the latter wins hands down for a number of reasons: all smart devices, old and new, can use Wi-Fi; Melita offers 10GB of data so there is no bill shock; and it can be used on multiple devices.
“This is why we were recently awarded the Best Buy Award for broadband and for wireless broadband, an award which is not solicited but is based on research,” he said.
Melita has also set itself apart from its competitors by accepting that it does not have to be the preferred supplier for all the four services – TV, fixed line, mobile and internet. This means customers can use a rival for other services but still use Melita Wi-Fi, for example.
“Our emphasis is not on getting people to bundle. Of course, we want their business and will keep trying to get all of it, but we prefer to offer an ecosystem which offers all the services from within it.
“For example, apart from TV Everywhere, which is growing considerably, we have video on demand offering thousands of films and series’ episodes at any time,” he said.
There was a time when operators said that wireless was the future, but now these very operators are the ones buying up cable operators
In the meantime, Melita is already planning the upgrade to an even more advanced Wi-Fi system, known as AC Wi-Fi, which will offer speeds of up to 1 Gigabit per second. Melita has also started rolling out 42Mbps speeds on its 3G network starting from busy localities such as Valletta, Sliema, Paceville and other areas. But does this mean that 4G has been ruled out?
““We will definitely offer 4G in the future as we appreciate that LTE has a role to play especially in providing wireless broadband in areas where data usage is not concentrated. But we are not interested in either launching a standalone 4G network based on the current LTE version that our competitors are using.
“We are eyeing the most advanced 4G standards available, the so-called LTE-A and LTE-U . Network vendors will also offer convergence between Wi-Fi and mobile, so the customer will be able to roam between the two networks transparently.
“At the moment, the switch from 4G to Wi-Fi is more manual but more advanced solutions from vendors will let the network do the thinking for you and provide the optimal experience,” he said.
“Standards for it are being finalised as we speak by the relevant authorisation body, and all major vendors will be rolling this out in the near future. This will keep us in the lead for wireless high speed data in Malta.”
Gozo has also been given attention. Historically, Melita’s mobile and Wi-Fi coverage there lagged that of its competitors but Melita Wi-Fi has now been installed in Victoria, Mġarr Harbour, Xlendi and Marsalforn bays and the mobile service is “at least on par” with its competitors.
The positive KPIs are not going unnoticed by the company’s shareholders, GMT Communications Partners (UK) and MC Ventures (US), which bought the majority shareholding seven years ago. Chairman Joe Gasan had said during an interview with Times of Malta in 2013 that, when it made the acquisition in 2007, it was planning to sell after eight or nine years. Mr Torriani would not be drawn on time frames.
“It is wrong to think that private equity always wants a quick flip around, cutting costs and then selling. A large portion of private equity takes a long-term view and really looks at the potential for a business. We are very comfortable with our shareholders. They have to this day not taken any money out of the company, unlike the shareholders of both our rivals. They have taken a different tack, encouraging the best management practices and supporting investment, trying to grow the business.
“Of course, they will take some money out at some point; they are investors in business to make money. I cannot give you a time frame though and there are multiple ways in which this could happen.
“The reality is that we have been an international trendsetter, particularly in the cable industry. Cisco even prepared a corporate video about the solutions they sold to us but also about what we are doing here. And I have made numerous presentations overseas about our business model.
“There was a time when operators said that wireless was the future, but now these very operators are the ones buying up cable operators. We are the test bed for first tier technology. It has been good for Malta, for Melita, for its shareholders and for the customers.”