Maltacoms call: innovation
and bottom line
Newly appointed Maltacom Chairman Sonny Portelli talks
to Kurt Sansone about the companys 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 its 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
However, Mr Portelli ruled out any redundancies. "Lean means how
we are spending our money and what were 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. "Todays 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
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 Maltacoms 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 doesnt. 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 Maltacoms 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 dont think
it gets any rougher than tourism. You really have to live by your wits
in that industry. As for Maltacom Im sliding in nicely and hope
to contribute positively bringing with me years of experience on the