April 2000

Malta Master Report

1. Size limitations

The small physical size of the Maltese Islands imposes an inherent limitation on the variety of utility services that are required, some of which might not even be necessary. Worth mentioning is the fact that there are no trains or highways since distances are too small and being an island, travelling to other countries is only possible by air or by sea. This in turn limits the need for alternative telecommunications networks within the archipelago. The main utilities that serve the islands are Water, Drainage, Electricity, Telephony and for the past few years Cable TV.

So far, none of the utility organisations publicly expressed an intention to diversify into business areas such as telecommunications or to have these facilities available for their own internal use. Perhaps one reason for these organisations to take this position could well be attributed to the fact that the Government has not yet come up with a detailed liberalisation policy, although it was publicly announced that one should be forthcoming in the coming weeks. Government is however all out for liberalising the telecommunications sector and one could understand that negotiations with the major players in this field are under way.

One could assume that there are no immediate plans for utility organisations to set up their own infrastructure for telecommunications. There are a number of important factors that play a significant role if and when utility services organisations consider setting up their own telecommunications services. The main contributing factors include:

• The country is well served with a modern network of data and voice communications, which is generally used for all the communications requirements of utility organisations.
• Local telecommunications costs, particularly those for voice services, could be considered as very low and thus attractive and convenient for these organisations.
• The range of telecommunications services offered by the incumbent operator cover much more than what is actually required by utility organisations.
• There is a general shortage of human resources in the areas of information technology and telecommunications and so utility companies would have to offer relatively high remuneration packages on the outset, if they decide to set up the necessary infrastructure.
• In general, there is room for improvement in almost all utility services and this restricts these organisations to concentrate their efforts on improving their core business as a matter of priority.

2. Cable TV

The Cable TV (CATV) Company, Melita Cable p.l.c. has been set up towards 1990 and since then started to lay its cable network to provide a number of television stations to the Maltese community. Its network is a hybrid of optic fibre and co-axial cable with active electronic equipment distributed in the streets close to the subscriber. The last part of the distribution network reaching subscribers is generally installed above the ground. Network coverage for this service is estimated to be about 80%. Part of the infrastructure of Melita Cable is installed in duct routes owned by Maltacom p.l.c. (formerly Telemalta Corporation), the present operator of telecommunications services in Malta.

During last year, the CATV company had shown increasing interest in providing data services over its network, particularly Internet access. In order to provide these services, the active equipment in its network needed to be upgraded to handle two-way communications instead of the original one-way, downstream to the subscriber. This would enable users’ responses to be conveyed towards the head end at which point users’ requests could be analysed and serviced. In the traditional system, the user just selected channels from the set of stations that were pumped into the CATV distribution system from head end. No feedback was ever required from the user and thus it was not necessary for the street equipment to be of the full duplex type. If the company were to provide Internet access, then user responses would be an important part of the service offered.

One of the most important developments that took place during 1999 was the partnership between one of the local Internet Service Providers (ISP) and the CATV company. The company had also announced an alliance with an American company that provided Web TV services.

Towards mid-1999, the company revealed that in a short time it will be demonstrating Cable Internet over its infrastructure to the public during an annual event, namely the Information Technology & Telecommunications (IT&T) Fair. Pilot testing had already been carried out and the company claimed that it was technically successful.

Internet Service Providers (ISPs) however, reacted to the announcement and demanded a level playing field for all Internet providers from the Telecommunications Regulator. As a result, new telecommunications regulations were issued some days before the mentioned event by the Regulator, whereby the CATV company was obliged to allow ISPs to make use of its network. The CATV company, Melita Cable was granted ninety days within which to provide ISPs with access costs.

The new regulations stated also that a company can only provide Internet access through one subsidiary company. One of the Internet providers had commented that the regulations gave equal footing but some areas had to be discussed further. He continued that anyone offering Internet access had to be in possession of a license. Licensing fees and associated regulations formed part of the new set of rules.

Maltacom p.l.c. also reacted to the announcement that Melita Cable will be launching Cable Internet in the IT&T Fair, primarily because the former had and still has a license to operate as the sole telecommunications provider. This had been manifested with strong statements issued by both companies some time after the announcement. Maltacom claimed that Melita Cable did not have the license to provide data services over its CATV network. Melita Cable denied.

Further developments related to the provision of Internet service over cable TV infrastructure were reported by Melita Cable p.l.c. during the last quarter of 1999. Demonstration of Cable Internet was one of the main attractions at the IT&T Fair. During this fair however, the company announced that it will not be providing Cable Internet for the time being. It is understood that the company is continuing with upgrading its infrastructure and one would be expecting further developments in the coming months.

3. The Malta Government Network (MAGNET)

Towards the beginning of the nineties, Government felt the need to modernise and improve its operations. The Management Systems Unit (MSU) was set up as a limited liability company wholly owned by Government to improve the then existing operations within Government departments and ministries. The main objective of the company was to review existing processes and systems and apply information technology within Government operations in order for the Civil Service to be more effective.

This resulted in the setting up of a number of information systems linked through a modern communications infrastructure. Although basic communications facilities were provided by the main telecommunications carrier, MSU installed state-of-the-art networking infrastructure which facilitated the sharing of valuable information over the Malta Government (wide area) network, nicknamed MAGNET. This could eventually be also made available to the Local Government.

Within the past three years or so the objectives of the company have been reviewed and the company’s name has been changed to Malta Information Technology and Training Services (MITTS) Limited. The company is still maintaining and modernising the facilities that have been installed to keep up with the ever-increasing demands for more effectiveness and co-ordination within the Civil Service.

Even though this is not in itself a public network, the number of users (within the civil service) that are connected to it to share information and resources cannot be underestimates given the limited size of the local market. MAGNET also provides direct access to the Internet and e-mail facilities between Ministries and Government departments.

During the last quarter of 1999, the Minister of Justice and Local Government announced that project plans to link Local Councils to access Central Government resources and to provide Government services on-line were in place with the project expected to be launched towards the first part of year 2000. This can be considered as a considerable expansion of the Malta Government network. As MAGNET expands further, so does the potential of having another alternative data communications network.