ESIS extension / Key Person Contacts and Organisations / Malta / Summary Report (1999

February 2001

Malta
Summary Report (1999 - 2000)

1. Introduction

The economy of the Maltese Islands is well served with deep harbours chief of which is the Valletta Grand Harbour, an adaptable, skilled labour force, warm and healthy climate and a strategic position in the centre of the Mediterranean Sea. The country is small in size and has no other natural resources. Over the years, Governments had to base the country’s economy on activities that are human resource oriented such as tourism, offshore banking, freeport activities, trans-shipment and the building and repair of ships.

With this in perspective, Government through the country’s traditional telecommunications operator gave a high priority to the setting up a modern infrastructure for both local and overseas telecommunications services. This was considered as a strategic feature to bring the Maltese Islands in logical proximity to Europe and the rest of the world.

The present government is actively preparing the legislative framework of the country to bring it in line with the requirements for accession in the European Union. Significant importance is being given to the telecommunications and data services sector. Three related legislative elements have been dealt with during this legislature, namely the new Telecommunications Services Regulations Act, the Data Protection Act and the Electronic Commerce Act.

2. Legislative framework

Even though there were no significant developments in the first quarter of year 2000, public statements made by government officials clearly indicated that efforts were being made to create the necessary mechanism and framework to foster information society. The second quarter of year 2000 brought with it a number of expected evolutions to the information society in Malta.

The new Telecommunications Services Act and the white paper on the legislative framework for information practices comprising draft bills on Electronic Commerce, Data Protection, and Computer Misuse characterised the first half of year 2000.

2.1 The Malta Communications Authority

Before the summer recess of last year, Parliament debate the new Telecommunications Services Regulations Act, which was subsequently enacted. During the second part of the year the bills on data protection and electronic commerce were presented for discussion in parliament and ratified.

The objects and reasons of the bill on the Malta Communications Authority were the establishment of the Malta Communications Authority to oversee and regulate the development of communication services and technologies in Malta and the putting into place of the legislative framework for the reform of the telecommunications sector.

The bill further provided that as from the date stated in the Act it should not be lawful for any person to hold an exclusive licence to supply, provide or operate any telecommunications systems or services and gave the opportunity to all persons involved in the telecommunications industry to compete on an equal footing in any category of telecommunications systems or services.

In the first part of year 2000 Government held discussions and had exchanges of correspondence with the three main operators in the telecommunications sector on the liberalisation of the telecommunications market in Malta.

Government intended to take the necessary measures to ensure that existing monopolies were removed within a realistic timeframe. It was aware of the fact that in certain instances monopolies were used to create hurdles for investors who wanted to develop new services. It considered that this was greatly detrimental to the country’s economy and had dampened the rate of development in this area, which in other countries had experienced exponential growth in recent years.

After due consideration, Government had therefore decided to proceed with legislative measures intended to reform the telecommunications market in a manner based on a balance between liberalisation, efficiency and service to the public.

Mr. Joseph Tabone has been appointed Chairman of the Malta Communications Authority.

2.2 The Reform Package

The reform package included in the National Plan for the Reform of the Telecommunications Sector annexed to the bill stated that:

All telecommunications services, other than fixed telephony, mobile telephony, international gateway and cable television, will be liberalised from 1 June 2000.

The present monopoly in mobile telephony will end immediately when Maltacom will be licensed to enter the mobile telephony market. No additional mobile licences will be issued during the period ending 31 December 2002. The government will consider the issue of a third operator license in 2003 and a third licensee would therefore not be expected to be in place before 1 January 2005.

The cable television market is to be liberalised on 1 June 2001.

International gateway services, including those for data services, will be liberalised on 1 January 2003.

Fixed telephony services will be liberalised on 1 January 2003.

3. The marketplace

3.1 Fixed telephony

Prior to 1975, telecommunication services were provided by the Post and Telephones (P&T) Department, an integral part of Government. Telemalta Corporation was a fully Government owned parastatal organization set up by an Act of Parliament on the 24 June 1975 to provide and operate all telecommunication services in Malta including domestic and international telecommunications as well as the maritime radio service. At that point the Post and Telecommunications functions had been separated. Telemalta, however, continued to assume the function of a provider and a regulatory as has been the case in other countries at the time.

The setting up of Maltacom p.l.c. on 31 December 1997 marked the first step towards privatisation of the traditional operator. The shareholders of Maltacom p.l.c. at the time were the Government of Malta and the Malta Government Investments Limited. Maltacom eventually took over the functions of Telemalta Corporation, which was the national telecommunications service provider.

Maltacom went public in June of 1998 and the Company's shares were traded for the first time on the Malta Stock Exchange on 23 June 1998. The Government has sold 37 per cent of its shareholding in the Company. Three per cent were held collectively through an employees foundation funded through an interest-free long-term Government loan. Twenty per cent of the shares were sold in Malta and the remaining seventeen per cent were sold abroad for trading on the London Stock Exchange.

By virtue of the Telecommunications (Regulation) Act, 1997 and in particular, in accordance with Section 40 of the said Act, the business of Telemalta Corporation, including all the assets and liabilities thereof have been transferred to and vest in Maltacom p.l.c. Legal Notice 237 of 1997 repealed the Telemalta Corporation Act, 1975 yet licenses issued under it remained in force. Maltacom had a monopoly until 2010 as a provider of fixed telephony and other selected services with a potential for rapid growth. This has now been superseded with the new legislation and liberalisation of fixed telephony services and will take place as from 1^st January 2003.

3.2 Mobile telephony

The traditional operator for mobile telephony in Malta is Vodafone (Malta) Ltd. The company, which had an exclusive license until 2010, commenced operations of an ETACS analogue network in 1990 and introduced GSM service during mid-1997.

The second mobile network operator, Mobisle Communications Limited made considerable progress during year 2000 and launched its operations towards the beginning of December 2000. The service has been branded ‘Go Mobile’. Nortel has been awarded the contract for a turnkey project based on its DCS 1800 mobile network solution. Mobisle Communications is a fully owned subsidiary of Maltacom p.l.c. Vodafone (Malta), which has been the sole operator in the field for the past 10 years, announced that it has been preparing and is ready to operate in a competitive mobile network market.

3.3 Data services & Internet Service

Datastream Limited, another subsidiary of Maltacom, started a pilot project aimed at providing faster data links to subscribers using Asynchronous Digital Subscriber Loop (ADSL) technology. Even though the service is still at pilot project phase, it is understood that the service is gaining popularity at an accelerating pace. Subscribers to this service will be connected with an ‘always on’ connection to the Internet or any other computer network at data speeds that could reach close to 8 megabits per second on conventional copper wire local loop under ideal conditions. The service is expected to be officially launched during 2001.

Datastream is also providing international Internet bandwidth to most of the local Internet Service Providers. It is estimated that the company is presently providing an aggregate of about 28 megabits per second of international bandwidth. The company is a fully owned subsidiary of Maltacom and has exclusivity on the provision of international bandwidth. International gateway services will be liberalised on the 1^st January 2003 (see The Reform Package).

Internet service is provided by 10 local service provider companies, one of which belongs to Maltacom p.l.c. and another to Melita Cable TV. The market for the provision of Internet services has been liberalised as from when the Internet has been commercialised and the local market is following suit international trends. The pace of advancement is however being hindered by the cost of bandwidth which is considered exaggeratedly high.

3.4 Cable television

In 1991, Melita Cable was awarded an exclusive 15-year license to provide cable television service in Malta and Gozo. Ever since, Melita has continued to grow and flourish at a significant rate. The company states that it is serving over 82,000 subscribers, with penetration rates of approximately 68%. This includes homes, apartments, bars, restaurants and hotels. By virtue of the new legislation (see The Reform Package), the cable TV market will be liberalised on 1^st June 2001.

In order to be in a position to offer data services, the company upgraded its distribution network in anticipation of further liberalisation of the data communications market. Network upgrades are aimed at providing interactive data services such as ‘always-on’ access to the Internet and network integration.

3.5 Malta Information & Training Services (M.I.T.T.S.)

Originally, Malta Information & Training Services Ltd. (MITTS) was set up as a Maltese Government information technology agency, to act as an agent for change in the public service.

MITTS is a limited liability company, external to public administration, and plays a crucial role in the Government's exercise of its overall responsibility for promoting business efficiency and value for money - specifically in the effective, efficient, economic development and use of information systems in support of the business of Government. The company's stance towards government departments conforms to Government's overall strategy for the Civil Service of encouraging a culture of delegation, accountability and full ownership of delivered systems.

3.6 University of Malta

The main research institution that focuses on information society technologies on the island is the University of Malta. Its contribution to the information society stems from a range of related courses dealing with different facets of computer and communication technologies as well as their subsequent application. The main contributions from a technological view point comes from the departments of communications and computer engineering, computer science and artificial intelligence and computer information systems.

4. Information Society Initiatives

Malta has been participating in the Euromed Information Society Action Plan Steering Committee since its inception by Prof. F. Aldana during the meeting of Ministers held in Rome in 1997. The work done by this committee has led to the allocation of substantial funds by the European Commission for projects related to the information society in the Euro-Mediterranean region (EUMEDIS).

The IT Nodes initiative in Malta has gained momentum with four out of five domains participating in some form of related training. Each domain is being led by organisations such as the EAN (Malta), a joint initiative between the Federation of Industries (FOI) and the Association of Retailers and Traders (GRTU), Malta External Trade Corporation (METCO), Institute for the Promotion of Small Enterprise (IPSE) and the University of Malta.

Malta is also participating in the Information Society Forum and the EC Consultative Committee, which have been launched during last year.

5. Key Contact persons

During the period 1999-2000, the following changes contributed to changes and additions to key contact persons information:

Towards the end of 1999, Government being 60% shareholder in Maltacom p.l.c., exercised his right to appoint a new Chairman for the company. The new Chairman, Mr. Maurice Zarb Adami has been given mandate to lead the company into a liberalized market place for telecommunications.
During mid-2000, Mr. David Spiteri Gingell, has been appointed by government as Chief Executive Officer of the Malta Information Technology and Training Services Limited (M.I.T.T.S.).
Towards mid-2000, Mr. Stephen Muscat has been appointed Chief Executive Officer of Maltacom p.l.c. He has also been elected as a member on the Board of Directors of the same company during the last annual general meeting held towards the beginning of March 2000 by the private shareholders of the company.
During the last quarter of year 2000, Mr. Joseph Tabone was appointed Chairman of the Malta Communications Authority.
The Information Society promotion event organized as part of the ESIS-II project during the last quarter of 1999, brought together for the first time in Malta, personalities from government and from different cultures across the industry and academia who are in one way or another interested in or are involved with information society related initiatives and projects.

Participants included: Government Ministers and high level Officials, University of Malta, IS Forum members, IT Nodes Domain Leaders, Euromed Information Society Action Plan Steering Committee representation, key persons from private industry, IS related organisations and other constituted bodies.

Please note that this report has been prepared under the sole responsibility of the ESIS II contractors.
It does not necessarily reflect the views of the Commission, nor does the Commission accept responsibility for the accuracy or completeness of information contained herein.
The ESIS Team of contractors welcomes any additional information or corrections.