04 October 2006

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Business Today

Telecoms “picking up the bill” for MCA’s costs

Matthew Vella
Telecoms firms are pressing for serious cost cutting at the Malta Communications Authority, claiming they are “picking up the tab” for the MCA’s spiralling operational costs.
In a letter sent last week to competitiveness minister Censu Galea and MCA chairman Joseph V. Tabone, telecoms giants Vodafone Malta, Maltacom and Melita Cable painted the picture of a spendthrift authority they had to finance through licence fees and charges.
The companies said the MCA was charging fees in excess of the funds needed to run its office, ignoring European Commission recommendations that charges should cover only actual administrative costs.
Now they want a cap on the MCA’s total expenditure at Lm650,000, claiming it has sufficient manpower to handle its remit. Telecoms firms also said the MCA’s current personnel levels were “unjustifiable”, leading to “needless stringent regulations and a plethora of futile consultation documents and excessive bureaucracy,” the letter seen by Business Today reveals.
They claimed that on a 12-month basis, staff costs increased by 54% to Lm477,000, while administrative expenses increased by 120% to Lm478,000. Average salaries had increased from Lm10,473 to over Lm11,000, the companies said, claiming the average industry salary was less than Lm9,000.
They urged government officials to address the MCA’s “unlimited latitudes to incur expenditure just because the operators will be paying for it. This to us is unacceptable and needs to be addressed with urgency.”
“While the industry is undergong cost cutting measures to become more competitive, we have a regulator whose operational costs are reaching stratospheric levels.”
The authority’s latest spend was its upmarket relocation to Viset plc’s headquarters at the Valletta Waterfront, a costly Lm200,000 move just to renovate the offices it rents. Viset’s empty second floor was taken up after negotiations fell through with a company selected from a shortlist of 32 others which had responded to a call issued in 2004.
The quayside sojourn comprises of a 12-year lease, costing Lm31,636 this year and another Lm91,200 for the successive three years.
Another bone of contention for companies is the minimum Lm120,000 they pay every year to establish their facilities on roads. They claim the MCA’s ‘right of way’ fees do not take into account the specific needs of the electronic communications sector.
The companies also say authorisation fees are 25 times those paid by a UK operator and in the case of spectrum fees, Vodafone and Go Mobile pay fees 10 times higher than in the UK.
The letter was signed by Vodafone CEO Hatem Dowidar, Maltacom Group’s CEO David Kay, and Melita Cable CEO Philip Micallef.


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