Capitalising on cable technologies

David Lindsay speaks to Joseph Spiteri, Melita Cable’s Head of Strategic Planning and Development (technology). Mr Spiteri, who has been with Melita Cable since inception, speaks about the development of cable technologies in Malta, Melita’s groundbreaking current initiatives and about technologies the company has in store for the future.

What was the state of cable technology when Melita Cable began its operations and how did the company stay ahead of the rapidly-developing technology of the sector?

At the very beginning we installed the most advanced system at the time. An entire cable television infrastructure requires a heavy initial capital outlay. Once we were investing those kind of funds we obviously chose only the best the market had to offer, as it would have to last as long as possible.

We were far ahead of everyone else at the time and, in actual fact, we put an unprecedented 180 fibres in each system. We were the first cable company to use that amount of fibre in any cable system and there was only one manufacturer who could supply us with it.

In terms of equipment, we purchased the most advanced technology we could find through vetting a large number of vendors. We started off with having the largest number of television stations within a European cable system. The reason behind that was quite simple. In Malta on a good day, one could receive 20 to 25 channels from Sicily, so we had to have more channels on the cable system in order to attract the clientele. Not only that, we had to provide a more reliable transmission. There are some 60 miles between Sicily and Malta and the temperature variations and weather conditions vary the reception quality.

We then began to receive most of the terrestrial stations by satellite, which we managed to do with better reception than one would receive from an ordinary antenna. That was the beginning of cable in Malta.

How have subscription rates improved over the years?

We have done well as far as cable television subscribers are concerned. We have now hit the 90,000 household mark, out of a total of 125,000 residential households. We also transfer a good number of cable subscriptions to a client’s summer residence for the season, but now we are finding that many of these prefer having at least a basic service to their summer homes, as they tend to visit their summer homes from time to time throughout the year.

We are very happy with the results we have managed to accomplish over a ten-year period, but it hasn’t been easy. We believe that we provide a very good service and we also believe firmly in good customer relations and service. We have to set a benchmark in that respect and we have done quite well so far.

Melita has recently branched off into two directions, into that of providing network solutions and the VOL Cable enterprise. Could you elaborate on these developments?

In terms of our Internet service, we did have a term in our license allowing us to provide data transmission. However, the difficulties we encountered in trying to launch the service unfortunately held us back to a certain degree.

When we did finally manage to overcome all the legal hurdles, we started out data Internet service using cable modems. But prior to that, since we did have these legal technicalities to resolve, we started off our own ISP, VOL – Video On Line, now a leading Internet Service Provider. This was made possible by utilising the Maltacom network for dial up, ISDN and ADSL connections and we were quite successful in the area.

It’s important to distinguish between our data services and our Internet business. The data services are under the umbrella of Melita Cable, while Video On Line, now a subsidiary of Melita Cable, handles our Internet services.

We had bought VOL in February 1999 and this company immediately started to provide ADSL, ISDN and normal dial-up connections. In December 2000 Internet over cable was introduced and is now going strongly.

To set up the cable internet service, we had embarked on two long selection processes for equipment – both in terms of what we needed in order to be able to provide the service and for what the consumer would need at home - the cable modem. Our engineers had carried out extensive studies on all the equipment providers and they had decided after long deliberation upon, respectively, Cisco and Toshiba.

I can say that the support from both corporations was superb. At one point we had 11 engineers resident here from Toshiba, Japan for six weeks to help us out with the launch.

What feedback have you received from the public on the cable Internet service?

It’s been very positive. Our customer base is growing at a steady rate but it still requires a culture change, which will undoubtedly come about. Eventually people will discover that there is not only a need but also a usefulness to the Internet. Of course, there are a great number of people using it for informational purposes - in terms of their businesses and for accessing resources.

Regarding the other services VOL provides, we have our own payment gateway, which is being used by a number of foreign companies. This uses a local bank to process their on line transactions. This service has been very successful.

We also recently introduced virus scanning for our subscribers’ e-mail accounts and we have other plans to enhance the service we provide for later this year, which will be announced in the near future.

Turning to data services, we are a Cisco Premiere reseller and Checkpoint Authorized Partner. Our client base includes some of Malta’s major corporations such as STMicroelectonics, Middlesea, Vodafone, MITTS, Gasan Mamo, Farsons, MDC, APS Bank, amongst others. Customers call us in to consult on network requirements, both in their corporate offices and for wide area networks. We hand in our proposals and from there we provide the Cisco hardware, software, installation and support.

We provide virtual private networking, that means - connecting offices of a corporation through a very secure environment. We use the very latest technology for VPN, called MPLS (Multi-Protocol Label Switching). In fact, Melita Cable as a cable company is one of the first to use MPLS - to the extent that Cisco is considering appointing Melita Cable as a corporate client demo site for the Mediterranean region, which would be quite a feather in our cap.

The most crucial aspect to these networks is of course, security. People’s minds can be laid at rest that the section of ‘pipe’ dedicated to a client is totally secure. One of the problems with any type of data service is that people are very wary security issues.

Our clients are now accepting that data can be transferred safely, and that money transactions can be carried out with complete security.

People are nervous about money transfers, but in actual fact there is probably less fraud using a credit card over the Internet than there is in using a credit card in a normal environment.

What other uses are there for you cable network and what future developments are in the pipeline?

Our infrastructure is also being used for CCTV security systems. One particular company, Securital, have used our system and been successful in implementing this venture.

In 2003 the whole of telecommunications will become deregulated and we have been promised a license for fixed line telephony.

To this end, what we have as a strategy is what is known as a triple play – entertainment, data and telephony coming in via one cable. At present we are investigating Voice over IP, an emerging technology readily adaptable to our system.

We will be able to provide, over one box, cable television, cable Internet and fixed line telephony. This is possible because there is no longer any such thing as voice and pictures, it’s all zeros and ones at the end of the line .

The dream of the technology experts is for people to have one box in the house fed via one cable and that box would be the gateway to a household’s entire communications needs. Consumers won’t need a box in each and every room of the house, as there are a number of ways in which data can be distributed.

One means of home distribution is called the power line network, by which you plug in a box into the power supply, which provides the household - data as well as electricity. There is a great deal of research in that field at the moment.

There is also a means of wireless distribution. I have seen a portable tablet with a minute antenna, which provides one with television, data, communications, a PDA, a telephone line and many other peripherals. The technology is definitely there - what was imagined a few years ago is now today’s reality. The rate of progress in technology is squaring itself every couple of years.

However, I should be clear that we are not going to start voice in January 2003, it is a long process. That is the direction in which technology is taking us.

Of course, this technology is still in its initial stages and we, as Melita Cable, always ensure that when we give our customers a technology is fully functional and proven.

What became of the video on demand concept, is it still on the drawing board or has it been temporarily shelved?

We have looked at a number of proposals but we need to carry out further and more extensive market research to ensure a return on our investment.

Video on demand would allow customers to choose a movie out of a library of about 1,000 movies.

We were to embark on the digitalisation process, which we have had to put on hold for a while. As you know, the local and foreign stock markets are down and the economies are going through difficulties. Once the economy boosts up again, we will take the project off the backburner and get it back on track.

We are not only looking at that, but also at providing a greater number of channels. The digitalisation process would ensure that everything going into consumers’ homes is digital and the only analogue device would be the Television set. By going digital, the quality of reception would undoubtedly improve and we could also go into interactive television. However, all that depends on a great deal of capital investment. - The concepts are ready and our strategies will be implemented at an appropriate time.