Telecommunications market opened up

With the last bastion of monopoly in the telecommunications sector dismantled yesterday, a senior spokesman for the telecoms regulator said "there are strong indications that a number of organisations are interested in providing a broad range of electronic communications services now that the market has been thrown open".

The Malta Communications Authority spokesman said all remaining telecommunications services were fully liberalised as of yesterday: "With effect from June 2, 2001 the cable television services market was liberalised while the mobile market was partially liberalised with the granting of a licence to Go Mobile in September, 2000. The services that were liberalised from January 1, 2003 include fixed and mobile telephony services, paging services and international gateway services".

The spokesman said there were bound to be considerable benefits accruing to consumers including greater choice of service providers and operators, improved customer service and support, better value for money for consumers, one stop shopping and enhanced quality of service.

Such advantages were seen when telecoms markets were liberalised overseas.

"Of course, while some of these benefits will become evident almost immediately, others will require some time to do so. Regulatory oversight is required to ensure they do indeed come about.

"Operators will have to work to retain customers and market share and this augurs well for users and subscribers. Consumers will need to educate themselves more about what electronic communications can do for them so as to avail themselves of the new services to the greatest degree possible."

The MCA challenges for the new year, the spokesman said, included the continued development and implementation of regulatory structures to enable the authority effectively to regulate the market in a post-liberalisation environment, implementation of quality of service standards, implementation of the postal and e-commerce regulatory structures and policies, and the new European Union framework for communications.

He stressed that the legal removal of monopolies was only one step towards a competitive market.

"There have to be new entrants to the market for competition to appear. As an example, Melita Cable remains a de facto monopoly once no other company has yet ventured into the cable TV market.

"However, there are strong indications that a number of organisations are interested in providing a broad range of electronic communications services now that the market has been thrown open," the spokesman said.

He said that for the current incumbents the challenge would be to adapt to a competitive environment.

"Their focus should be on improving efficiency, providing a broad range of services and ensuring customer satisfaction. Liberalisation will also mean a blurring of the lines of distinction that previously existed. This means that players in, say, mobile telephony, can now participate in different telecommunications activities such as in international voice and data services. Similarly, Maltacom is preparing to enter the TV sector with a video over DSL offering."

Asked whether the MCA foresees more players offering fixed telephony, the regulator spokesman said it was premature at this stage to foresee another operator in the fixed telephony sector, given the small size of the market. He said there were no pending applications for new operators to offer fixed line telephony services.

"However, with the advent of Voice over IP (VoIP) - a technology that allows voice traffic to be passed over networks that use the same protocol as the internet - voice traffic is no longer tied solely to the public switched telephone network (PSTN). This technology is not strictly tied to liberalisation as current players were free to use the technology. However, as from now other service providers, or alternate operators, can use VoIP to compete with the fixed telephony incumbent.

"In Malta, the biggest driver for VoIP services will be international calls. Voice traffic to overseas locations could be routed over the public internet, thus bypassing the Maltacom international gateway. This could mean that one can call an overseas number at rates lower than previously possible. However, users of such services should be aware that the internet has no quality guarantees, unlike the PSTN. The quality of the VoIP service may be variable and could suffer from delays, interruptions and network congestion."

The MCA spokesman said that although the telecommunications market had now been fully liberalised, the market still needed to be developed further in terms of price, quality, service options and regulatory environment in order "to achieve the competitive market structure to the same level of that in other EU countries that have experienced competition earlier than us".