Malta - Telecoms, IP Networks, Digital Media and Forecasts

Additional Information

Executive summary

Malta’s telecom regulator, the MCA, has addressed a number of areas to reduce prices for consumers and foster greater competition. Recent decisions and consultations have affected the voice termination market, interconnection pricing and local loop unbundling.

Although local loop unbundling has been legislated for since 2003, there has been very little take-up, with the result that most ISPs resell broadband offers from the incumbent, GO. A number of ISPs failed during 2009 and 2010, and since GO picked up most of these it has been able to increase its market share. Indeed, the number of alternative broadband players is falling rapidly and by 2010 they had only an insignificant market share. The sector is thus dominated by GO and Melita Cable, providing effective cross-platform competition, though Vodafone also offers an island-wide WiMAX service. Broadband penetration remains comparatively low by European standards, and broadband speeds are relatively slow: by the beginning of 2010 about 72% of subscribers had a connection of between 4Mb/s and 6Mb/s, while only 9.6% had a connection of at least 10Mb/s.

In the mobile market the duopoly of Vodafone and GO Mobile ended with the launch of Melita Mobile in early 2009. Melita - as also GO - now offers quad-play services including mobile voice and data, while Vodafone has a triple-play offer. All three mobile operators have invested in HSPA technology upgrades. The entry of Melita mobile changed the dynamics of the mobile market, yet mobile prices remain among the highest in the EU.

The key issue for 2011 will be the continuing effort by the regulator to encourage an NGN through developing regulations sympathetic to investment by operators. To this end, the government’s Green Paper on NGNs has set out some policies for network roll-out. These measures will be paramount to maintain momentum in such a small market - telecoms sector revenue fell 6.4% in 2009, year-on-year, while operators have struggled to finance upgrades during a period of slow economic growth.

Malta - Key telecom parameters - 2009; 2011
Sector20092011
Fixed-line service:
Total subscribers (thousand)242245
Fixed-line penetration (population)57%58%
Broadband:
Subscribers (thousand)111138
Broadband penetration (population)27%34%
Mobile services:
Total subscribers (thousand)422435
Mobile penetration (population)105%115%
(Source: BuddeComm)

Market highlights:

Malta’s telecom sector revenue fell by more than 6% in 2009 having shown 7% growth in 2008. The country’s economic demise has not been as severe as in other areas of the EU, which has helped the three main telcos weather a difficult period with reduced revenue. Although Malta’s market is restricted by the country’s small population it benefits from having most inhabitants concentrated in a few towns, and so telcos can provide services to the majority with relatively little expense.
By 2011 the larger part of mobile networks will have been upgraded with HSPA technology, allowing them to promote mobile data services. SMS remains very popular though MMS has struggled, with declining volumes of messages sent each year.
Operators will focus their attention on developing improved convergent services. Already, Melita and GO compete with quad-play, while Vodafone’s triple-play offer add to the competitive mix. Over 25% of the Maltese population subscribe to bundled offers. The market for converged services is likely to remain restricted to the triopoly of existing players given that bundling services by vertically and horizontally integrated operators cannot be replicated by smaller players.