Malta: 2008 a positive year for the telecommunications sector

[malta independent] The telecommunications industry registered very positive results in 2008, contributing over three per cent to GDP, a significant increase over the 2.5 per cent of GDP produced in 2007, according to the Malta Communications Authority’s annual report for 2008 published on Friday.

Overall, the total sector output reached just under €267 million, while employment in the sector also continued to grow and stood at 2,612 as at the end of 2008 – an increase of 117 when compared to 2007.

Speaking on Friday, MCA Executive Chairman Philip Micallef said that in 2008 all telecommunications sectors continued to show growth both in terms of subscriptions and usage.

In fixed telephony, traffic grew by 3.5 per cent. Mobile telephony subscriptions reached 94 per cent of the population, while broadband penetration reached 24.6 per cent to surpass the EU average. The pay TV market also grew to 89 per cent of the population compared to 84 per cent in 2007.

Infrastructure investment continued unabated with GO launching its second submarine cable and Melita making the final preparations for the launch of a third generation network operator.

In mid-2008, the MCA assumed responsibility for implementing the national policy on e-Inclusion and e-Business as reflected in the Smart Island Strategy. The MCA also strengthened its end-user affairs function, reflecting the increasing need to focus on quality of service, Ing. Micallef observed, adding that the Authority will also strive to engender improved cooperation between undertakings to create a stronger and more resilient sector without diminishing healthy competition.

Over the past year, the MCA placed additional focus on the reliability and security of networks, especially in emergency situations. Ing. Micallef noted that Regulations on International Connectivity were now in force.

Also speaking on Friday, Communications Minister Austin Gatt said that one of the 2010 targets of the Smart Island Strategy was for Malta to have at least four international submarine connections, and that the objective has now been met.

Subject to EU state-aid regulations, the Strategy also contemplated the provision of incentives to telecom providers that invest in international connectivity. Last year, the government started a state-aid notification procedure with the European Commission in this regard.

Dr Gatt noted that obtaining approval from the EC had been very challenging, since any government intervention in the telecoms sector is heavily scrutinised by the EC.

The award of the tax credits to investors will be subject to criteria, which will be made public towards the end of summer in a call for expressions of interest that will remain open up to 2011. The tax credits can be awarded to expenses incurred up to December 2011.

Dr Gatt also explained that in the coming years the government will be working to identify different ways to attract investment, particularly in new infrastructures that are able to meet the projected increase in demand for bandwidth.

2008 a positive year for the telecommunications sector