Decision on phone tariff rebalancing in January

The Malta Communications Authority is expected to decide on the controversial Maltacom tariff rebalancing issue by the end of January.

MCA chairman Joseph Tabone would not however give any indication whether Maltacom's fresh proposals - to raise its fixed telephony rates and slash its international rates by half - would be given the green light.

The authority yesterday launched its annual report and financial statements for 2003 during a news conference at the SAS Radisson, giving a rather rosy picture of the telecommunications sector.

Maltacom submitted an application for tariff rebalancing in November 2002 but the proposal was given the thumbs down by the MCA in February.

A couple of months ago it submitted fresh proposals, this time suggesting a reduction in its international rates by an average of 47 per cent, offset by a hefty increase in its local call rate.

Maltacom is also proposing that the rental rate for fixed lines would go up from Lm24 to Lm30 per year in residential cases and from Lm52 to Lm72 for business.

Last May, the MCA published a consultation paper proposing the establishment of a price control mechanism on Maltacom's fixed telephony retail tariffs.

A joint steering group, consisting of MCA and Maltacom officials, was set up to moot options for rebalancing Maltacom's retail tariffs over a three-year period.

A consultation period over the fresh proposal came to an end this week, with two interested parties making their views known, Mr Tabone explained.

The figures given in the annual report reflect a thriving sector.

Mobile subscribers in September this year total 280,847, an increase of 10.6 per cent from September last year. The number of SMSs sent in the quarter ending September 30 reached a staggering 94 million, while internet subscriptions increased from 25,000 to 72,962.

When comparing the household internet access penetration in EU accession countries, Malta ranks third, behind Slovenia and Cyprus respectively.

Malta's broadband subscribers have been increasing faster than the dial-up subscribers. In fact, while broadband subscribers increased by 83 per cent in 2002, dial-up subscribers grew by 14.5 per cent.

Competition has paid off as mobile rates have been slashed substantially, Mr Tabone said.

Comparisons with other EU acceding countries show that Malta is one of the only two countries that did not experience a drop in fixed line subscriptions, therefore showing that, so far, the take-up of mobile phone lines has not yet replaced fixed lines.

With the coming into force of the Postal Services Act in June this year, the MCA also became responsible for regulating the postal services sector. The MCA, in conjunction with the Ministry for Transport and Communications, is currently working on the formulation of a licensing framework.

Mr Tabone said that the liberalisation of the international gateway services created a competitive market for international voice and IP services. Suffice it to say that between July and September this year, the number of international calls made through Voice over Internet Protocol (VoIP), totalled four million minutes.

Vodafone has declared its interest in providing international telecommunication services between Malta and other countries.

The project will increase data bandwidth availability and international voice and data capacity thanks to a high-capacity fibre-optic link that is expected to be operational by next summer.

The MCA's chief technical officer, Colin Camilleri, said the authority had audited 50 mobile phone base station sites and all were within the accepted limits. On a negative note, he said there still has not been any market pull for third generation mobile telephony services and discussions are currently being held with the players to see how best to entice business.

MCA income from telecommunications licensing amounted to Lm1.88 million, all of which is being transferred to the government. Contributions amounting to Lm410,522 receivable from the government were allocated against expenditure which amounted to Lm517,954. This resulted in a deficit for the year ending September 30 of Lm98,885. This deficit has been deducted from the general fund which was, in turn, left with a deficit of Lm46,488.