18 - 24 November 1999

Time for action

Melita Cable's chief executive officer Frank Leiter last week gave clear indications as to what is going wrong in the telecommunications sector in Malta.

Addressing a business breakfast organised by The Malta Business Weekly and Hotel Le Meridien Phoenicia, Mr Leiter said he was preoccupied with the lack of proper legislation on telecommunications. More so, he was worried that no formal discussions have been held between all parties concerned, that is: the government, Maltacom, Melita, the Internet Service Providers and Vodafone.

This is a major problem. Firstly, the country does not have a strong regulatory body that defines, at law, what should and should not be done. There is not one single piece of legislation which all concerned can refer and adhere to - and rest assured that it will not be changed overnight.

If one had to examine the numerous agreements signed between the government and Maltacom, Maltacom and Melita and between the government and the Internet Service Providers, it is evident that loopholes exist.

Let's take the agreement signed in 1998 between the government and Maltacom. In this agreement, the government gives Maltacom monopoly status as the sole telecommunications provider in Malta. This agreement, valid until 2010, guarantees Maltacom with an open playing field whereby competition is non-existent.

Then again, a couple of months ago, the government issued new telecommunications regulations confirming Maltacom's monopoly and status as a telecoms provider. However, the regulations also allow Melita Cable to act as a Telecommunications Provider.

Telecoms analysts have questioned the reasoning behind this move, asking whether the previous agreement between Maltacom and the government is still valid.

The Minister for Telecommunications, Censu Galea, had told this newspaper that the government would be looking into the issue. Shouldn't the government and the regulator have addressed this issue when the regulations were drawn up?

Mr Leiter in his speech said the new regulations had nationalised the company's network overnight. "In one day last month, 'they' took away the basic of our business; our system and infrastructure. We had put money and investment in that and, until then, we thought it was ours. In one day we found out that it was ours no more and that we have to share it with everyone," Mr Leiter said.

And this came about, he added, without the company ever being consulted. It is clear that the government has erred somewhere along the line. In the rush to solve one problem, it created another, albeit unaware of the consequences. Now, Mr Galea is faced with mounting problems that could, and should, have been addressed before the regulations were published.

It is also clear that the government is moving in the right direction with regards to liberalisation of the telecommunications industry. It has set the year 2003 as the target date for when this will take place.

Yet, even this move is fraught with problems. The main stumbling block is Maltacom, and with good reason. How is the government going to act when the company is going to have to shelve a large number of jobs? The workforce at Maltacom has to be reduced if it is going to be viable in a liberalised market. Has the government sat down to tackle this delicate issue? The answer is: no.

How many times have the ministers responsible for telecommunications, finance and economic services respectively, sat down and discussed Maltacom? In one way or another, Maltacom is their concern.

How many times have they consulted with the ISPs, Melita, Maltacom and the ISPs on this issue?

In the present state of affairs, liberalisation of the telecommunications market is going to be fraught with problems that will prove to be more difficult to solve in two years' time than now.

Mr Leiter is obviously irritated because his company has been hit hard, yet his comments should be taken seriously because they reflect the way this country tackles its affairs.

The government has got to get its act together once and for all. Present players in the field, and even more so those expected to set up base in Malta, want to know exactly where they stand as far as liberalisation is concerned.

The government should start a round table consultation with the industry's players - not next year or in 2002, but now - and make its intentions clear to all. There are no buts or ifs in this situation. Now is the time to do something before it's too late!