(Adds MCA, Melita reactions)
Maltese consumers are getting the most expensive and least efficient broadband deals in the EU, two studies have found.
Consumers are paying through the nose for broadband services, including internet, TV and telephony, while receiving much less than what they are paying for.The studies, funded by the European Commission, were published yesterday.
There is little difference in the offers on the market by the two main players in the sector, GO and Melita, indicating that competition is not really working as it should, they say.
The detailed studies delve into the price of broadband across the EU, the offers available and quality of the service, particularly its real speed compared to what is advertised. On all counts, Malta emerges to be among the worst in the EU.
According to the findings, “the cheapest stand-alone (internet only) service in Malta is nearly triple the EU average”. The same applies to all the other offers although at varying degrees.
“The least expensive double play (internet and fixed telephone) is nearly more than 1.5 times higher and the price of the cheapest triple play (internet, telephone and TV) is around twice the EU average,” the studies point out.
According to a report by the Commission, which covers prices until last February, “it can be concluded that the price of the least expensive offers in Malta is systematically higher that the corresponding EU average price”.
The difference for Maltese services compared to the EU average range from as low as 32 per cent to up to 190 per cent for offers above 100 Mbps (Megabits per second).
The report also highlights the competition or lack of it in the sector. While more than 90 per cent of Maltese subscribers buy their broadband services from GO or Melita, there seems to be little difference between the two, it notes.
When comparing the cheapest offers of both operators, the report says that “it appears that the least expensive offers of the incumbent GO are nearly always cheaper than those of Melita”. However, it concludes that, in most cases, “the differences in prices between the two providers are rather limited and is generally lower than 10 per cent”.
A study on the quality of the broadband services being offered in the EU also puts Malta at the top end of the worst off.
Malta, together with Spain and Portugal, “were all found to have noticeably higher than average latency”, meaning the service is being given at a slow speed.
With regard to downloading, it says that “Malta is seen to perform the furthest below the average compared to all other countries”.
While the actual download speed of cable technology during peak periods in the EU is 63.5 Mbps, in Malta it is less than half and stands at 30.3Mbps.
Competitive conditions in Malta led to consistent decline in prices - MCA
In a reaction, the Malta Communications Authority said the competitive conditions in Malta led to a consistent decline in prices paid by Maltese consumers for broadband services.
The drop in prices, of around 33 per cent, for broadband products supporting download speeds of 30Mbps but less than 100Mbps last year and this year was a particularly positive development, given that almost 57 per cent of local fixed broadband customers had a connection at home supporting 30Mbps+ download speeds, the MCA said.
It said that the relevant report methodology made reference to speeds but not download limits, which usually affected prices, particularly for lower end products.
“In most of the internet packages that are offered in Malta, there is no set quota on the download limits. This situation may be very different in other jurisdictions, where the consumer may be asked to pay a relatively low fee for a very limited amount of download; once this maximum amount is exceeded, subscribers are billed on a much higher basis.”
The MCA noted that local consumers were increasingly opting to purchase their fixed broadband service with unlimited download as part of a bundle. The proportion of fixed broadband subscribers in a bundle climbed from 56 per cent in June last year to 71 per cent last June.
The issue of bundle uptake assumed particular relevance in the context of price developments for fixed broadband as bundled subscriptions typically enabled consumers to avail of discounts on the final price they paid for the service.
Prices quoted in the relevant report were not the actual prices paid by local consumers, but prices based on Purchasing Power Parity (PPP) standard. In the case of Malta, this standard adjusted prices upwards by almost 30 per cent in the process of data comparison.
Referring to the technical findings report, the MCA said this was based on a sample size of 74 users.
“When one considers that during the same period the number of internet subscriptions was in excess of 151,000, the sample size used to carry out this study cannot capture the complete picture of the Maltese subscriber base.”
The MCA also said that there was no direct relationship between speed and latency and there were no latency issues in local service provisioning.
The authority noted that Malta was the only country in Europe with virtually complete high speed fixed and mobile broadband coverage to all households. This was acknowledged in one of the reports and in the latest Digital Agenda Scoreboard report in connectivity, where Malta ranked among the top 10 EU countries and above the EU average.
Methodology used in testing does not reflect Malta's advances - Melita
In another reaction, Melita said that the methodology utilised in testing and conclusions did not reflect Malta’s advances and positioning as one of the EU’s leading next generation broadband nations.
It said that test results were not based on a measurement server in Malta and this put into question most of the findings.
It also said that pricing comparisons did not take into consideration Malta’s size and geographical position as, in real terms, Malta’s prices were among Europe’s cheapest when comparing equivalent products.
Melita noted that the EU Digital Agenda scoreboard confirmed Malta as a leader in next-generation broadband, both in terms of coverage and take-up of high speed internet.
The EC report’s data, Melita said, actually confirmed that in terms of actual versus advertised speeds Melita’s result was 21 per cent better than the EU overall weighted result.
Average download speeds for Melita’s customers grew by 16 per cent over the previous report.
Melita said it had been repeatedly confirmed as Malta’s fastest broadband internet provider by international independent speed test company Ookla, which based its results on hundreds of daily tests performed by real customers from their homes.
Moreover, for a 30 megabit product which Melita charged at €23.50 per month, operators in countries such as the Netherlands, Portugal or Italy charged €38, €40 and €42 respectively.
Melita said that its continuous multi-million euro investments thrust Malta in the number one position among EU countries for coverage of next generation broadband and thanks its investment, the report concluded that “Malta remains the only country to report complete coverage for NGA technologies”.
Melita said that itself and other local operators had no choice but to incur additional costs to physically get to main internet hubs such as Milan, London or Frankfurt to connect to the internet.
This reality also impacted latency.
“Malta cannot escape the fact that it is the country furthest away from internet hubs therefore response will always take longer since it needs to travel longer distances, although this is measured in milliseconds.
“The entity executing the quality tests on behalf of the EC confirmed in the report that tests are not based on a measurement server in Malta, which would have material impact on the results,” it said.
Melita said it would further analyse the data available and discuss its findings and conclusions with the relevant authorities.
The discussions among stakeholders, it said, should focus on how to improve Malta’s international connectivity, reducing international connectivity costs and incentivising customers to move to faster broadband speeds in line with digital agenda objectives.