25 July 2001


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The cost of getting connected


By Kurt Sansone

Statistics released by the National Statistics Office show consumption trends moving towards IT related services and products and this change in lifestyle is costing consumers an average of Lm50 a month.

The Malta Financial and Business Times created an average IT basket for a two member household and calculated the cost for such a household to be connected to the information super highway, via Cable TV, telephone, Internet and mobile telephony. The cost would reach Lm53.22 a month or Lm638.64 per year. All prices quoted are inclusive of VAT and were taken from available literature of companies offering the various services.

Starting from the basic telecommunications tool, the telephone, every household has to pay a monthly rent of Lm2.10, assuming that the household has only one line. The cost of telephone calls varies according to the usage of the family but for the purpose of this calculation this has been put at an average of Lm5 per month.

When calculating the cost of Internet, things get a bit more complicated because of the various price structures available around. Considering that high speed Internet such as Cable Internet and ADSL still has a low penetration when compared to the conventional dial-up, the price included in the equation is that of an unlimited dial-up account. This will amount to an average of Lm9.50 a month.

Recent statistics published by the National Statistics Office put Internet penetration at 13%, which is higher then Greece and Portugal and on par with Spain and France.

In addition to the Internet subscription a family can purchase a Websave Day package at Lm5.75 a month to cut down on telephone pulses. This package gives the user 60 hours of free telephone pulses prior to 6 P.M. and unlimited hours of free pulses after that time.

The next IT commodity listed in our basket is the mobile phone. According to the NSO mobile phone usage has shot up by 24% over a one-year period, with the proportion of the population with a mobile phone standing at 36%. For the purpose of our calculation the cost of owning a mobile phone was calculated at Lm10 per month for a pre-paid contract re-charge card.

Taking into account that in a household of two people with no kids, both adults would own a mobile phone each, the cost would reach Lm20 per month.

The last and one of the most important commodities included in the basket was a Cable TV subscription. The NSO statistics show that as of March this year, there were almost 84,000 cable TV subscriptions. Once again cable TV offers a number of different packages within a price range varying from Lm2.88 to Lm31.87. For the purposes of this exercise we calculated a family package without premium channels, standing at Lm10.87 per month.

The total cost of The Malta Financial and Business Times IT basket reveals a type of lifestyle that is becoming increasingly common. It shows a visible change in spending patterns that the retail sector should well take note of. However, when compared to other European countries Malta still has a long way to go.

When considering Internet and mobile phone Malta ranks on the lower rungs of the EU-15 and places quite favourably with EU candidate countries. The IT revolution may still be in its infancy.



The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
Tel: (356) 382741-3, 382745-6 | Fax: (356) 385075 | e-mail: editorial@networkpublications.com.mt