21 January 2004

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Maltacom’s call: innovation and bottom line

Newly appointed Maltacom Chairman Sonny Portelli talks to Kurt Sansone about the company’s prospects for the coming year.

In one of his first public appearances as Maltacom chairman, Sonny Portelli was a happy man yesterday as he presided over the financial results for the first three quarters of 2003, which saw the communications giant in good health. Talking to The Malta Financial and Business Times after presenting the results to stock brokers and investors, Mr Portelli identified two key areas when asked on the prospects for the coming year: innovation and a healthy bottom line.
"In this sector rather than speaking of growth it’s more appropriate to speak of innovation. In the area of fixed line telephony growth is limited because the market has reached saturation. Growth is going to have to come in broadband, which is the future of telephony. It is also a way by which we keep regenerating our copper infrastructure, which is a valuable asset. Furthermore, Go Mobile is going from strength to strength and has registered an impressive performance since its inception," Mr Portelli said.
The company will also be taking a close look at its cost base. "Like any business we have to look at our cost base. We have to be efficient and lean."
However, Mr Portelli ruled out any redundancies. "Lean means how we are spending our money and what we’re getting in return for it. It does not mean in any way that we are going to make people redundant. My board and I are not considering redundancies or early retirement schemes. It has been business as usual. The cost cutting we are looking at is one derived from good management by reducing waste, making sure people are delivering, increasing seriousness and focus."
Mr Portelli expressed his hope that in the coming financial year Maltacom will offer more of the same. "Today’s results, if one takes into account the exceptional item (the sale of Vodafone shares), profits are almost double of what they were in the same period last year. If we remove the exceptional item there still is a positive variance. This is a spectacular achievement for any company given the current economic climate."
It is no secret that Maltacom intends reviewing its tariff structure for fixed line telephony. If the Malta Communications Authority gives its go ahead the rebalancing exercise could spell good news for business. Mr Portelli said: "Whatever the MCA decides is going to have a significant impact on our company. This is a sensitive area. The exercise is a rebalancing of tariffs. The business community is going to have a good deal given we are an island and overseas communication is critical for any business. The tariff for overseas calls should be going down but I want to emphasise, this will not be done at the expense of local calls. The change will be hardly perceptible for consumers. No one will suddenly be faced with massive bills. It is going to be a balanced affair. I have to say that as a company we have developed a very high corporate social responsibility throughout the years."
Mr Portelli denied that the sudden influx of service providers offering an overseas telephony service utilising voice over internet protocol (VOIP) caught Maltacom by surprise.
"The regulator had asked us to take certain measures to ensure that there was a level playing field. But this is the nature of the sector. It is dynamic, ever-changing. The future is internet protocol telephony. Fixed line telephony is on the way out. You cannot resist change and now we have come out with our own VOIP product and will be fighting for our market share."
Mr Portelli confirmed that Maltacom’s digital TV project is still on the books. "There has been quite a high level of investment and research in the project. The time has now come to assess the viability of the product. Technically we have a good product. What we have to be absolutely sure is that we have the business case. The product has to be marketable at a price that is affordable. We will be making up our minds very soon and will take a decision in a purely business fashion. It either makes sense or it doesn’t. What is certain is that we are going to be players in this area, referred to as triple play technology; interactive TV, TV over broadband. Maltacom will definitely be in it, we cannot afford to stay out."
The chairman identified Go Mobile, Datastream and Maltanet as the subsidiaries that represent the future of the company, when asked on the how financially viable Maltacom’s daughter companies are. "Generally speaking they are very healthy. Go Mobile is doing wonderfully well, Datastream is also doing well and Maltanet is close to reaching a break even point. These three are the future of our industry. They are our leading subsidiaries and all are or will soon be contributing positively to our bottom line."
And when asked what he will bring to the Maltacom Group by way of experience, Mr Portelli answered: "All my working life I have been involved in management, particularly the tourism sector, and I don’t think it gets any rougher than tourism. You really have to live by your wits in that industry. As for Maltacom I’m sliding in nicely and hope to contribute positively bringing with me years of experience on the management side."kurt@newsworksltd.com

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Editor: Saviour Balzan
The Malta Financial & Business Times, Newsworks Ltd, Vjal ir-Rihan, San Gwann
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