Explosion in telecoms may be reason for slump in other sectors

The explosion in the local telecoms sector in a period of relative slump is proof of high spending and the shift in consumer preferences. In a short time scale of two years, two telecom companies Vodafone Malta and go mobile a subsidiary of Maltacom have competed aggressively together, with one company, go mobile, making unexpected inroads into the telephony market.

Writing in his weekly column, Finance minister John Dalli said that since the liberalisation in the telecommunications sector, subscribers to mobile telephones increased by 200,000 which meant that in the past few months Lm15 million was spent in acquiring new mobile sets.

It does not stop here, a conservative figure of Lm10 million a year has been estimated to have been spent in mobile telephone calls.

The focus in telecoms spending has led to a decline in spending power in traditional sectors such clothes and entertainment. And this coupled with the economic slowdown was been felt to a much greater extent.

Speaking at the Chamber of Commerce last week, the Finance minister said that this was one reason why there was a bleak view of our economic performance while aggregate figure were on an upward trend.

He told the Chamber of Commerce that entrepreneurs should be creative and move with the times.

He advised that investors must be much more aware of sectoral realities when making investments and taking decisions.

He added that they must be aware of the size of the market, the potential for market growth and the factors that might contribute to market shrinkage.