Anticipating telecommunications liberalisation, Galea hails ‘economic cornerstone’

In the run-up to 1 January 2003, Transport and Communications Minister Censu Galea said that with the full liberalisation of the telecommunications sector, the EU dimension will become particularly relevant as Malta aligns itself with international principles.

Mr Galea was addressing a forum at the Malta Stock Exchange yesterday, entitled ‘The Telecommunications Regulatory Framework – 1 January and Beyond’.

"Government continues to be fully committed to the liberalisation of the telecommunications sector and in facilitating competition on a level playing field. It is a commitment that you will have come across several times in various contexts. Nonetheless I feel it is pertinent to reiterate this commitment here and now."

Minister Galea said that the process of liberalisation will continue to foster competition, although he was not expecting any long lists of potential operators waiting at the Malta Communication Authority’s doors. He however shared his pleasure at knowing that there has been interest from several quarters in Malta’s telecommunications liberalisation. "I am confident that what happened with mobile telephony, will repeat itself in those markets that will be open for competition, namely fixed telephony and international connectivity. The analogy will probably not be linear, but I am confident that there will be some interesting activity going on throughout 2003 and beyond.

"I don’t think I need to dwell, with an audience such as this, on the merits of competition, with respect to increased efficiency, effectiveness and value for money."

Citing telecommunications as the cornerstone of economic development, Minister Galea emphasised the need for a strong telecommunications sector, with an equally-strong macro-economic footing. He said that potential investors look at a country’s telecommunications sector as one of several key factors influencing investment decisions.

"They do so from the perspective of infrastructure robustness and price, both of which are militating factors. Both are stimulated in the right direction by competition. Hence Government’s determination in ensuring the existence of the right environment for competition."

Assuming a sense of social commitment, Minister Galea said that liberalisation will take place within the confines of legality.

"It is inconceivable to assume that a free-for-all will deliver the goods. Monopolies, as a concept, have been relegated to history. Nothing will make this undeniable fact go away. Now the challenge for Government now is that of making the concept of a liberalised sector operating on a level playing field a reality. We are aware of the difficulties involved in fostering competition. That is why we have taken the necessary steps to ensure that the environment is adequately regulated."

Like a football match, he said the sector needs a referee to oversee the game. This would be taken up by the MCA’s role, whilst Government plays the part of the Football Association, to ensure the updating of the rules of the game and tending to the development and proliferation of the activity. Hinting at yet no complete deregulation from Government, Minister Galea said that some individual decisions will be taken by the MCA or Government because in this budding scenario, both will remain essential components for the sector to thrive.

"Government is therefore fully cognisant of the fact that one cannot liberalise such a sector without establishing the appropriate regulatory mechanisms. We are committed to giving the MCA all the necessary resources for it to be able to carry out its role in line with Government policy. We are equally conscious of the need to ensure that the appropriate checks and balances in relation to the regulator’s actions and decisions are in place.

"Beyond this we feel that it is in everybody’s interest that the regulatory authority is respected and its decisions adhered to by all concerned, including the Government if it is an interested party. If we do not, collectively, abide by the rules, then, the game cannot be played."

Talking about the European dimension, Minister Galea said that liberalisation would still have to proceed if the country would want to keep up with the rest of the world, in or out of the EU. Minister Galea said that the shaping of the telecommunications regulatory environment is influenced by EU policy.

"The fact that we are caught in between two such frameworks, the 1998 Acquis, that represents the so called ‘starting conditions’ for accession countries, and the new 2003 Acquis, makes the equation more complex, although it is acknowledged that the latter builds on the former."

The new 2003 Acquis addresses the issues such as technology convergence and neutrality and the relaxation of ex ante regulation where competition has come about. It professes a facilitation of market entry by new players. Minister Galea said that the Ministry and the MCA have been actively working towards implementing the new Acquis and in ensuring that it provides the necessary benefits.

He mentioned that the MCA has been reviewing the current licensing regime to ensure a competitive environment in line with the current and the new Acquis. He also highlighted the importance of licensing in bringing about lasting and sustainable competition by establishing licencees’ rights and obligations in providing the best possible service to the public.

"Once again, at the very end of this we come back to the public. Operators have the sacrosanct right to thrive on the services that they provide. At the same time they have the obligation to ensure that their clients get the best possible deal.

"Government, in turn, has the obligation to ensure that both service providers and clients get the best deal. The best way to do this is to ensure fair competition and safeguard consumer rights. This is essentially the mandate of the MCA."