The announcement of a possible merger between Melita and Vodafone has raised considerable interest in Malta.

In fact, the Office for Competition recently announced it will conduct a thorough analysis of the transaction – a move that was widely anticipated.

Let me outline in simple terms why I believe this transaction will benefit Malta.

Firstly, there is a burgeoning demand for high-speed internet in our homes, offices and while we are on the move. To an increasing number of us, access to social media, business documents, information and e-commerce is vital. In the near future, almost anything imaginable will be digitally connected, requiring very reliable and fast data connectivity.

It is therefore crucial that Malta secures the considerable investment needed for next generation networks and digital infrastructure such as nationwide Gigabit-capable broadband and 5G. Such investment underpins the prosperity of businesses and the economy of the country as a whole.

In any country, the high cost of infrastructure means operators must be of sufficient scale to be able to invest in networks and services of the future.

In smaller countries like Malta, with a population of under half a million, this situation is more acute. Companies willing to invest in building Malta’s digital infrastructure must be able to make a fair return, or our island will be increasingly set adrift from the technology and services available on the European mainland.

I strongly believe that the merger of Melita and Vodafone will ensure that Malta benefits from this critical future investment. The combined business will have the scale to make these significant investments.

Secondly, there has been a lack of real competition in the converged market (i.e., ‘quad play’ bundles comprising TV, telephone, internet and mobile services) for far too long.

In the business community, the lack of competition for converged services is singularly evident and further thrown into relief by the rapidly accelerating demand for such bundled offers. The number of bundled telecoms services sold on the island increased by 72 per cent between 2012 and 2016, according to the Malta Communications Authority.

Presently, 78.7 per cent of broadband connections and 68.4 per cent of fixed lines are now sold in a bundle. GO has built up a clear position of strength in convergence, with the ability to provide the full portfolio of bundled services.

Thanks to its legacy infrastructure inheritance from Maltacom, it has been able to create a strong fixed and 4G mobile network today.

It dominates the Enterprise market, having made various acquisitions, such as BMIT.

Malta depends on real competition in the converged market and this can only be created by bringing together Melita’s expertise in fixed and internet services with Vodafone’s strength in mobile.

Enhanced competition will, in turn, foster innovation and the development of exciting new services.

I would also like to address the concern that the proposed merger will reduce competition in the mobile sector if the number of operators goes down from three to two.

This supposition ignores the increased competition the mobile industry has faced over the last few years from the arrival of free messaging and voice services like WhatsApp, Facebook and a host of other similar platforms.

Mobile competition is only likely to intensify in the years ahead.

Regarding the potential impact of the merger on pricing, it is worth noting that TV, fixed telephony and fixed internet services in Malta have, for many years, been two-player markets.

Despite this, price levels in Malta are very much on a par with European levels and there has been considerable innovation in the networks.

Indeed, the European Commission’s 2016 Digital Economy and Society Index ranked Malta at the very top amongst EU countries in terms of coverage of both copper and next generation cable and fibre broadband services.

As evidenced above, this merger will therefore increase sustainable competition, not reduce it.

It is the best chance to ensure that in Malta, there is continued investment in technology which underpins any modern digital economy.

Harald Rösch is CEO of Melita.