NEWS | Wednesday, 19 September 2007

Broadband internet prices could go down after MCA market review – Ministry

Charlot Zahra

The price of broadband internet in Malta, which is still prohibitive for a substantial number of people due to its relative high cost when compared to the rest of the European Union (EU), is expected to go down after the MCA concludes its review of the wholesale market for broadband internet.
A spokesperson for the Ministry for Competitiveness and Communications, which is politically responsible for the MCA, told Business Today: “Presently, the Malta Communications Authority (MCA) is finalising the market analysis for the wholesale broadband access market the outcome of which could also positively influence retail prices for broadband internet in Malta.”
He was commenting in reaction to the proposal made by Melita Cable Chief Executive Officer (CEO) Philip Micallef in an interview with this newspaper on 29 August calling on the Maltese government to apply for EU funds to subsidise the country’s international bandwidth.
“A huge component of the broadband cost is the cost of the international bandwidth. This remains expensive in Malta unlike costs in other European countries. Costs, to be fair, have gone down in the last few years both in broadband and in international bandwidth but the latter remains about five to seven times higher than average European costs,” he said.

Micallef explained that in his opinion, few people realize the importance of having market rate international bandwidth prices. “Malta is an island and trying to build up a knowledge economy and the success of this depends on our physical telecommunication links with the rest of the world.
“In many EU islands like Balearics, Corsica, Canary Islands residents and business people of these islands get subsidized transport rates to allow them to travel to mainland Europe. These subsidies are approved by the EU.
Malta should go a step further and instead of demanding subsidized transport rates should allocate EU funds to improve our international connectivity. We get funds for roads, why not get funds for an ICT highway to Europe?” he asked.
In its latest annual report for 2006, published in June 2007, the MCA complained that the uptake of broadband internet in Malta has not been so strong especially when compared with the EU average.
As at 1 October 2006, Malta’s rate of broadband penetration stood at 12.3 per cent when compared to the EU-25 average rate of 15.7 per cent.
Currently there are two providers of international broadband in Malta – GO and Melita Cable (with the latter still not offering wholesale internet broadband to other ISPs except to MITTS for the Government network).
In July 2006, the MCA in a consultation document designated both of them as having Significant Market Power in the Wholesale Broadband Access Market.

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