A historical view of the mobile telephony sector suggests that Malta’s robust regulatory oversight and infrastructure-based competition have determined the story of outcomes that we are observing today. As already highlighted in a preceding contribution, the sector has seen deregulation in 2012, shortly after the Malta Communications Authority’s analysis of competition revealed the onset of improved competition dynamics with the arrival of a third network operator.

Since then, market outcomes proved consistent with the MCA’s expectations of a competitive market, hinging on more choice and improved quality.

Price competition has also evolved in the right direction, with an overall downward evolution observed in recent years.

The consumer landscape has also transformed rapidly, with demand for broadband access strengthening and voice usage shifting markedly from fixed to mobile. Mobile keeps consolidating its position as the preferred choice for voice communication, with service providers reporting 876 million mobile voice call minutes in 2017, almost double the volume reported for fixed.

Since 2014, year-on-year growth in mobile voice minute volumes ranged between five to nine per cent. One of the main factors driving these trends is the decline in the overall rate per minute of voice communications, which is arrived at by dividing voice-related revenues reported by operators for a particular period with minute volumes.

Comparing the years 2014 and 2017, the average rate per minute of voice communication was down by almost 26 per cent.

However, the manner in which average calling rates have been changing varies, depending on the type of plan that is purchased. For example, while the rate per minute of mobile communication for a local call averaged €0.07 in 2017, outside bundle call rates during the same year ranged between €0.10 per minute in a couple of instances to the more common applicable rate €0.25 per minute.

For pre-paid, the average rate charged by local service providers in 2017 stood at €0.21 per minute.

This means that the overall drop observed in the average rate per minute of mobile voice communication has been most affected by the minute allowances that are available in the heavily promoted contract-based plans, particularly the unlimited minutes for on-net calling.

Higher mobile broadband penetration is linked to the rising popularity of voice services

Mobile also continues to see strong growth in data-capable connections and usage.

Local data volumes in MB soared by 40 per cent year-on-year since 2014, with each mobile broadband user reportedly consuming 14GB of data on average in 2017. To a certain extent this change comes as no surprise, given the growing mobility of people and their stronger attachment to Internet connectivity.

Also, data allowances got bigger over the years, as has been particularly the case with flat-rate monthly tariff plans. The bigger data allowances brought down the average rate per MB, from €0.011 in 2014 to €0.007 in 2017.

Here again, developments need to be seen in proper context, considering that not all end-users are subscribed to the same plan and that therefore some of these end up better off than others in terms of the rates they pay per unit consumed. Moreover, one cannot ignore the fact that entry-level mobile access fees have gone up over the years, alongside with the improved allowances.

This raises the question as to whether some end-users may be short-changed, in the sense of having to pay for units of minute and data volumes that are not effectively consumed.

The market can however self-regulate when it comes to such concerns, given that end-users can switch easily between different operators when selecting the plan that best fits their own requirements. Consumers may also opt for multiple subscriptions, possibly to avail of the cheaper on-net calling.

Higher mobile broadband penetration is also linked to the rising popularity of voice and messaging services available Over-The-Top (OTT). In fact, successive surveys carried out by the MCA demonstrate that usage of OTT-based services has been on the rise for a number of years. OTT-based activity has mainly contributed to the decline observed in mobile messaging volumes, whilst mobile voice services have largely kept to their growth trajectory.

A recent development in the OTT domain is the availability of zero-rated offers, whereby end-users are given the possibility to access mobile-based broadband applications without eating in their mobile data allowances.

This practice is widely in use abroad and is set to rise in popularity in Malta as well.

Going forward, current trends in consumption and pricing for mobile are anticipated to persist over the next months. This year’s award by the MCA of licences in the 800MHz and 2600MHz bands should enable local mobile network operators to provide a better service at a more competitive price.

On their part, consumers are expected to keep on with their quest for faster and better services, with mobile data anticipated to be the main price-triggering consideration for migration to contract-based plans.

Activity per user 2014 2015 2016 2017
Voice minutes 1,304 1,389 1,414 1,472
SMSs 924 821 701 559
Data (MB) 3,180 4,581 6,243 8,231
Mobile minute volumes 2014 2015 2016 2017
Million 719 766 808 876
Average year-on-year growth 9.5 per cent 6.6 per cent 5.4 per cent 8.4 per cent
Mobile data volumes* 2014 2015 2016 2017
Million MB 1,754 2,528 3,568 4,898
Average year-on-year growth 90.6 per cent 44.1 per cent 41.1 per cent 37.3 per cent

* The figures represent the data usage of local subscribers while accessing mobile broadband services locally and while roaming.

Kevin Caruana and Roderick Gusman are senior managers at the Malta Communications Authority.

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