It is an exciting time for the telecommunications industry in Malta. In the brief five months I have been here we have seen GO and, to be fair, our competitors, launch a number of important initiatives that will be critical to Malta’s social and economic progress in the future.
From GO’s side, we have announced the significant upgrading of the data capacity of our two submarine cables, been the first to apply for commercial 4G+ spectrum, launched 1GB internet for business customers and announced a further €100 million investment in infrastructure over the next five years.
Everyone who has Malta’s best interests at heart must be proud of what this industry has achieved, including the fact that, thanks also to GO, we have the fourth fastest mobile network in the world.
We must also be proud of the work being done to give this country the infrastructure it needs for a world in which the importance of data and connectivity, both in our personal and professional lives, will continue to grow exponentially.
The gigabit future for Malta is here already, and very few other countries can say this.
At the same time, we are rapidly approaching another important moment for the telecommunications industry in Malta. Within the next few weeks, possibly days, the Office for Competition within the Malta Competition and Consumers Affairs Authority will announce its decision on the proposed Melita takeover of Vodafone Malta. Since the takeover was announced in May this year, there has been considerable debate about the impact it would have on operators, consumers and Malta’s general competitiveness.
With this being the biggest and most complex deal of its kind ever in Malta, the thorough and professional way in which the OFC has gone about reviewing the proposed takeover has been impressive. As the decision day draws closer, I believe it is important for everyone to be aware of the possible implications of this takeover and that, whatever the decision, we ensure that what has been achieved is not jeopardised.
To do this, we must ensure that healthy and fair competition between operators is maintained. It is competition that gives all the operators the incentive to invest in upgrading their networks and systems and it is competition that ensures the services we offer are delivered to our customers at a fair price.
What is important is that Malta’s telecommunications sector remains genuinely competitive – for everyone’s benefit
Whatever the OFC’s decision, one augurs it will be framed in a way which guarantees a level playing field for all current and future operators and, furthermore, ensures that genuine competitive forces continue to prevail.
Achieving a fair and open market post-acquisition will be a challenge in a scenario where the combination of Vodafone and Melita’s mobile businesses will give the new entity a very dominant position in that segment. In addition, the fact that Melita’s nationwide fixed-line internet capability is very strong further increases the risk of having one operator establishing a very dominant position in the overall telecommunications market.
This would, of course, not only impact GO’s ability to compete but also deter potential new entrants from investing in their own networks here.
The situation is further complicated by the sheer expense which Melita will need to incur to acquire a controlling stake in Vodafone Malta. To put this in context, the sum required for the acquisition is over 10 times greater than the amount Melita would need to invest to upgrade its mobile network to 4G.
With this significant outlay to recoup, and with an acquired dominant market position, the implications for future investment in infrastructure by operators, for consumers’ pockets and Malta’s general economic competitiveness are all too clear.
It is paramount to prevent the creation of a super-dominant player and provide for strong safeguards and adequate obligations to ensure it does not water down the intensity of competition in practice.
Malta’s telecommunications industry is, indeed, at an important crossroads.
GO will remain totally committed to Malta and to its strategy of investment, not only to provide a fair return to all its shareholders but also to help this country’s economy and society continue to develop.
Whether Melita is allowed to acquire Vodafone Malta is not the only issue.
What is important is that, whatever the OFC decides in this case, Malta’s telecommunications sector remains genuinely competitive – for everyone’s benefit.
Attila Keszeg is chief executive officer at GO plc.
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