Quite by coincidence - certainly not by design - Malcolm J. Naudi spoke to the top executives of the two mobile telephony operators, Vodafone and Go Mobile, within two days of each other earlier this month. Maltacom chairman Sonny Portelli (left) talked on Go Mobile's fifth anniversary and his vision for the Maltacom subsidiary.

Although the Maltacom chairman denies it, there is something emotional about Go Mobile, the Maltacom Group's mobile subsidiary which celebrates its fifth anniversary of operations this week.

"I am quite enthusiastic about Go Mobile," he confided. "It is fresh. It has been a raging success. I am very fond of it - because it delivers an excellent bottom line."

What has been so surprising about this para-statal subsidiary is that it came out of nowhere. "Five years down the road, it is very profitable (and) extremely well run, with an excellent management team, who lead some really fine people."

The past five years have seen a consistent growth curve, turning a profit within 17 months of operation. "In 2004 we earned just over Lm4 million in profits," Mr Portelli recalled. "By the end of 2005 we will be in an even better position."

Despite investing over US$55 million (Lm20 million) in state-of-the-art GSM, GPRS and Wi-Fi infrastructure, he says Go Mobile has been very judicious where and how it invested. "However, this is a very dynamic environment and, as the Americans say, you have to keep ahead of the curve. We are already planning for what we have to do next year."

The big story in 2006, according to Mr Portelli, is 3G. "The Malta Communications Authority licence was awarded with a two-year timeframe. We will not wait until the summer of 2007 to introduce 3G. Christmas 2006 would be a logical date to look out for the introduction of this service.

"We are going to be out there when we have to be out there and not a day later. The process has started and we are already in the physical run-up to the launch. The building that is to be the home of 3G is being built next to our Marsa head office.

"Vodafone are not going to allow us to have an easy time. A big contribution to our success is the strength of our competitors.

"Go Mobile realises that Vodafone is a global player. I make no bones about the fact that Vodafone is the largest in the business.

"From the word go, we were competing in the premier league of mobile telephone companies against the champions of the world. This is why we are so delighted with our results because we achieved (them) against the best possible opposition we could have.

"3G is one of the innovations you can expect from Go Mobile in the next 12 months, but there are also imponderables. Throughout the world of telecoms, there are still a lot of questions on the technology.

"The market seems to want it. Penetration is constantly on the increase and 3G will bring to the fore a whole new range of services, including TV on the phone. There is also the natural cycle of people changing their handsets that has to be kept in mind in introducing 3G locally.

"Whoever will be talking about this company in five years' time will be mentioning things we have not even dreamed of, the rate of development is so rapid. We take it for granted that Vodafone is going to be our competition for the foreseeable future. So, we have to be at our wits' end to compete and keep ourselves as sharp as we possibly can be."

Mr Portelli said it has been the consumer who has benefited most from this competition in mobile telephony. "Monopolies, especially in telecoms, are bad for the country because they stifle development, (foster a) complacent environment and therefore are bad for the consumer.

"Thanks to competition, the product got better and prices got keener. Competition makes for progress, going for the competitive edge, improving effort. Everyone is a winner. Five years ago it cost 45c a minute for a mobile call. Today it is 12c a minute or less.

While the price of calls came down, Mr Portelli said everything else went up, with a much wider offer of service. "You can send a photo to your grandchild; use MMS and SMS - the Maltese are the largest users of text messages in the world. That is thanks to mobile telephony.

"You can get football results in real time; lotto results; and while roaming abroad in over 155 countries you can ask your wife what size she wears and the colour she prefers. The mobile is ubiquitous. It is everywhere."

It was not only the locals who are benefiting from this advanced technology. Mr Portelli said with over one million tourists visiting the island every year, most of them having a mobile device, it was thanks to the infrastructure put in by the two mobile companies that they could communicate with their countries of origin.

"Without a mobile most people would be totally lost. There is also the peace of mind aspect."

Mobile rates will be those the market will accept, he said. "In any business, your rates have to represent value and are those seen to be affordable by the market. Considering the high level of our investment, we have to make sure the rates are affordable to the largest chunk of the market."

The latest innovation is Talk4less, an offer through which pre-paid customers can talk to other Go Mobile customers for up to an hour and pay only for the first minute between 8 p.m. and 8 a.m. during the week and all day on the weekend. Standard off-peak rates apply for the first minute, so Ready to Go and Ready to Go Club customers pay 12c for calls up to 60 minutes. Calls under a minute will continue to be charged on a per second basis.

"We are also concentrating on services not using mobile telephony directly: Wi-Fi and GPRS. We have seen a healthy growth in this area and see huge potential. This is where we are heading in the future - using a device, mobile or otherwise, like a laptop, without a SIM card."

Go Mobile has also obtained a Broadband Wireless Access (BWA) licence. "We are actively working on BWA and will not miss the deadline," Mr Portelli said. "So far, with our other projects, we have made it well before the imposed deadline. We were pioneers in Wi-Fi and GPRS."

Asked about how Go Mobile is to be affected by privatisation, he said: "We have a strategy and a vision. It is in step with what is everywhere in the telecoms world. It is our duty to drive the company independently of the privatisation process. This is merely the divestment by Government of its shareholding.

"The new, controlling shareholder will, I am sure, seek to continue to drive the company in a way that will ensure the continued growth and the returns from his considerable investment, which is exactly what we are doing today."

Go Mobile has been coping regularly with spikes in demand: on New Year's eve, elections and whenever there is a calamity, like flooding. "By and large, our system continues to function despite huge demand on our resources," Mr Portelli pointed out. "This proves the reliability of Go Mobile. Considering we have such an indigenous base, we are world class."

The search for a new chief executive officer is still on. "Although you have to take for granted that, in any environment, particularly telecoms, job mobility is a fact of life, when you lose some really good people, you are quite sore," he said. "As you can imagine, good people do not grow on trees and a rarer breed is outstanding CEOs.

"The appointment of our former CEO, Professor Juanito Camilleri, proved to be an excellent decision and I want to be sure that his successor will be just as successful. We are not sleeping on it but these things take time. Privatisation does not come into it at all."

Go Mobile employs 220, mainly at head office in Marsa, and it operates seven outlets. "The name of the game is distribution. Retail outlets, which are more important for Go Mobile's brand image, are part of our distributor network.

"We have excellent relations with the distributors and we are constantly evaluating to improve our relations. Our customer service agents go around to bring them up to speed on new developments. They listen to the most important people in our lives - our clients and, like everybody else is a selling environment, our distributors."

Go Mobile has 50 preferred dealers from where its offers are available. MyGo top-ups are constantly on the increase year after year, with 70% of top-ups done by card. There is now also the SMS bank system, which Mr Portelli said is convenient for roaming.

"Our target next year is increased market share," he said, so it's going to be fun. That is our number one objective for next year."

Go Mobile defines mobile subscribers, as the Malta Communications Authority does: the number of people who are active on the network and using our services regularly in the past three months. The figure for Go Mobile is currently in excess of 155,000 customers, which to them is a bit more that 48 per cent of the market.

Go Mobile chronology

June 2, 1999 - MobIsle Communications Ltd set up

May 2000 - Go Mobile brand name launched

September 19, 2000 - Go Mobile granted licence by the telecommunications regulator

December 1, 2000 - Go Mobile officially launches services

January 2001 - In less than a month, Go Mobile's subscribers surpasses the 20,000 mark

June 2001 - Go Mobile becomes first local mobile operator to launch GPRS

November 2002 - Subscriber base surpasses the 100,000 figure

December 2002 - Go Mobile launches its MMS brand, Go Live!

April 2003 - Go Mobile becomes the first local operator to launch Wi-Fi

December 2003 - Number of subscribers increases to 125,000.

November 2005 - Subscriber base in excess of 155,000.

Convergence is key for Maltacom

The key word in the telecoms business today is convergence, according to Mr Portelli. "Convergence is the future. This is not true only of Maltacom but of all telephone companies."

The main technology that is driving telecoms is Internet protocol (IP), he explained. "If you look at the other areas of the group and see the effect of IP on fixed line telephony, VoIP has taken huge chunks of the business and will continue to do so."

Maltacom, he pointed out, has already invested heavily in IP technology. "As we talk, our people are commissioning IP-empowered soft switches - the new (telephone) exchanges. These are the platform on which we will be developing our IP future.

"As soon as these are fully commissioned, around the middle of next year, Maltacom will immediately embark on end-to-end IP solutions and, at that point, it will not be just VoIP but 'everything on IP'.

"Even when I look at 3G, not so far down the line, there will also be VoIP on 3G. That is Maltacom's advantage because we have the possibility of a vertically integrated IP environment while, until now, none of the indigenous incumbents have or are likely to have."

According to Mr Portelli, the infrastructure is "total" and "capable of multitasking, flexible and capable of whatever is possible in the telecoms environment for the foreseeable future.

"So, in a nutshell, I see tomorrow's Maltacom as a fully converged group drive by IP-empowered technology, managed by ICT specialists, delivering the highest standards of service and very affordable rates. This is my vision of the Maltacom Group in the next few years."

This is the vision of any telecoms executive, he stressed, whether the conversation was in Malta or anywhere else. "That is why privatisation for me has no surprises because whoever is going to step in the government's shoes is going to talk to you in exactly the same language. The only question mark in my mind is the timeframes and I have a hunch they may be shorter than mine.

"Niches will continue to have a place in our churches and cathedrals but in the telecoms environment they only have a past. We are following the strategy of convergence in a unipolar group."