Melita to inject €4.5m in mobile in bid to build on market share

Melita chief executive officer Andrei Torriani: “The competition has a good set of services but it is defending the status quo in market share with higher pricing and technologies which are not being upgraded to a level being pursued by Melita.” Photo: Darrin Zammit Lupi

Melita chief executive officer Andrei Torriani: “The competition has a good set of services but it is defending the status quo in market share with higher pricing and technologies which are not being upgraded to a level being pursued by Melita.” Photo: Darrin Zammit Lupi

Melita’s planned €4.5 million investment in its mobile operation will be channelled towards further improving coverage as the operator seeks to build on its eight to 10 per cent market share at the end of 2010, chief executive Andrei Torriani told The Times Business.

Last month, the communications group announced its shareholders had made the significant cash injection for the continued operation and development of Melita Mobile, the fastest growing local operator.

This new investment in mobile is a significant increase from the €2 million originally earmarked for 2011 and 2012 in an announcement last year.

Launched in February 2009 promising a “cheaper, simpler, better” service, Melita Mobile has been credited with driving down local mobile rates, including voice and data charges, since its arrival on the market. The operator was also cited by the EU for its work to bring down the cost of mobile calls.

Now the operator was working harder to fulfil the ‘better’ part of its brand promise.

“Customers have found our mobile offering to be good value for money, and the quality to have improved significantly over the past year,” Mr Torriani said.

“Our own measurements show we have comparable coverage to our competitors, both in terms of voice and data on the outdoor and we have made great progress on the indoor. The larger players (Vodafone and Go) had programmes of 10 years to do what we have done in 18 months.”

Some of this investment has also been set aside for acquiring rights of use of the 900 MHz and 1800 MHz bands; Melita participated in the Malta Communications Authority submission stage earlier this month.

Mr Torriani said Melita was “fairly confident” – given the focused effort and submission made to the MCA – that it would be successful in acquiring the rights to use these frequencies. The development would pave the way for improved coverage for the operator and level the playing field with the competition.

“We definitely see continued opportunity for us in mobile telephony,” Mr Torriani pointed out. “It’s one that will benefit all Maltese consumers, businesses and our shareholders.”

Mobile communications was the biggest share in the €250 million Maltese telecommunications market, he added, and Melita would continue to find growth given its cost-competitive product positioning, leading to increasing numbers of customers, traffic and business.

Melita’s Freedom Pack, a €12.99 bundle of mobile credit and fixed telephony, had been hugely successful over the Christmas period. Mr Torriani said the cost of Maltese fixed telephony had been driven down significantly over the last two months thanks to the Freedom Pack particularly as there was nothing which “came close to the product in terms of value on the local market”.

“Over the last few years, Melita has ignited an improvement not only in the pricing and quality of mobile and fixed telephony services, but also in the delivery of broadband and dedicated services, thanks to our investment in the fibre-optic cable between Malta and Sicily. We are fast developing recognition for having the best technology and value combinations in the services we offer based on the latest technologies.

“The competition has a good set of services but it is defending the status quo in market share with higher pricing and using technologies which are not being upgraded to a level being pursued by Melita.”

With its advanced network’s considerable capacities for voice and data services, Melita was able to channel all mobile and fixed telephony traffic through the same IP-based infrastructure keeping the cost base fairly flat. Over the past few months, Melita had also been in communication with European regulators over what it deemed unnecessarily high termination rates for calls.

“We do not see why the termination rates which operators charge each other have to be any higher on mobile than fixed,” Mr Torriani explained. “When a mobile operator sends a call to another in Malta or in Europe, the operators receive a significant amount of money that is higher than what a fixed call would cost a consumer. This is why calls to mobile networks are so much more expensive – but we do not see any reason for the continued higher termination costs charged by mobile operators to each other.”

Mr Torriani said the European Union’s regulatory commission for telecoms had indicated its goal was to have equal mobile and fixed termination rates across Europe. If achieved, the objective would have significant impact on local competition and on pan-European roaming rates.

The chief executive believed the time would come when there would be a unified telecommunications cost across Europe so there was no disadvantage for small players like Melita against giants like Vodafone, Orange, or Telefonica.

Mr Torriani was asked why Melita, for all its technological strides in telephony, internet and TV, was possibly the second most vilified company in Malta.

“Historically we have not been humble enough,” Mr Torriani replied. “The historical perspective on Melita is grounded in the fact we were once a cable TV monopoly with poor customer care – and to a large degree the perception was deserved. But we have been changing rapidly – over the past six months we have focused our efforts on improving our call centre agents’ response times: right now 85 to 90 per cent of all calls are handled within one minute and our ‘first call resolution’ rate is above 75 per cent. On a benchmark basis, that is now as good, or better, than our competitors and any European telecom provider.”

The chief executive admitted he took very candid opinions from numerous people over the last year on their Melita customer care experiences. Teams were striving to make changes to ensure customer experience improvements were being made.

He admitted training and updating young call centre agents on all Melita’s products and services – including 150 TV channels, several handset models and settings, mobile service and product offerings – was challenging. Staff, he said, had been rising to the challenge to produce a Melita “that is evolving away from its historical monopoly-mindset positioning to a dynamic and responsive full service telecom provider”.

Mr Torriani was also asked about disconnection policies which had drawn furious complaints from consumers, particularly when it involved requests for death certificates and other official documents. He defended a policy of verification of identity modelled on that of telecoms players across Europe which was introduced at the beginning of last year.

“Two years ago there was no policy, and consumers could call in and disconnect services.” Mr Torriani explained. “Under EU laws, when we sell a service to someone and they sign for it, we and the consumer have obligations that are contractual. Changes to a service need to be communicated and verified as being from the person in the contract. Imagine the problems caused by children or separated spouses initiating actions without the consent of those having the service. We put many resources behind implementing this policy, in collaboration with the regulator, to ensure everyone’s rights are protected and requests are dealt with in an expedient, well communicated process.”

The MCA had tracked the situation when complaints began to be registered. Melita had recently been informed by the regulator that complaints had dwindled to the point it was satisfied and no further actions needed to be taken.


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