12 July 2006

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Business Today

Maltacom goes cool on 3G and DTTV

Kurt Sansone

Go Mobile may be providing its customers with television streaming over its current upgraded network but the decision whether the company will roll out third generation (3G) technology, which would allow all sorts of data services to be provided over the network, still has to be taken by the new board of directors.
Addressing the media for the first time since his appointment, Maltacom’s new CEO, David Kay, on Monday said that no final decision has yet been taken on 3G.
“A small market like Malta needs to be approached differently than, say, a market like Germany,” Kay told Business Today.
The official terminology being used by Maltacom’s management to describe the company’s plan of action for rolling out 3G and digital terrestrial television is “works in progress”.
Asked by Business Today to explain what he meant by ‘works in progress’, Kay said the new board of directors had to get “comfortable” with the company’s Maltese management and plans before embarking on hefty investments required to upgrade the company’s technology and services.
“Malta is a small market and needs to be approached with caution. We are evaluating the business case,” Kay said.
Go Mobile was issued a licence by the Malta Communications Authority in August last year to operate a 3G network and is committed to roll out the service and offer at least 50 per cent coverage of Malta’s territory within two years of the granting of the licence.
This means that by August 2007, Go Mobile would need to have commissioned the 3G technology and ensure that at least half of Malta and Gozo are covered by the network.
Maltacom also has a licence from the MCA to operate a digital terrestrial television network. The licence, granted in May 2005 could be lost if Maltacom fails to provide full national coverage of no less than 95 per cent of the islands by November this year. “There is working progress on the DTTV network and we are still deciding when and how since we have to evaluate the business case,” Kay said when asked by the newspaper about the deadline imposed by the licence.
The new CEO’s cautious words contrast heavily with the optimism expressed by Maltacom chairman Sonny Portelli in January this year over the introduction of DTTV. Interviewed by Business Today, Portelli had said that Maltacom will “definitely enter the market” in 2006.
“This is not an objective but a reality we are working on. Very soon we will be announcing the launch date of our DTTV service… We are entering DTTV because we see a good and strong business case. The board is convinced of the business case and we are going to role out digital television,” Portelli had told this newspaper.
Portelli’s optimism in January does not seem to be shared by the current board of directors, made up primarily of people appointed by the new majority shareholder, Tecom Investments. Portelli has been retained as chairman of the company.
The privatisation process seems to have stalled the company’s investment plans and it will take some time for the new directors and the new CEO to acclimatise themselves with the company.
Kay also confirmed that Maltacom won’t be appointing any new CEOs for its subsidiary companies since all decision making will rest with him as group CEO.
‘Getting comfortable’, the terminology used by management to describe the warming up process of the new directors, is however conditioned by the deadlines imposed by the communications authority and changes in the market.
Vodafone is expected to start rolling out its 3G network by the end of summer and is already selling 3G-enabled hand sets. And the law courts will also be deciding come October whether a third, 3G licence award process is to continue in a case instituted by a company against the Malta Communications Authority.
“What other players in the market do has a partial bearing on the decision Maltacom will be expected to take,” Kay admitted on Monday.
The crux of the argument is whether Tecom, which was purposely roped in as a strategic partner by government, will live up to its commitment to invest in upgrading Maltacom’s technology and services. Only time will tell; but time is also running out.


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Editor: Kurt Sansone
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