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NEWS | Wednesday, 08 August 2007

MCA Chairman’s comments on mobile phone tariffs

Vodafone accuses Tabone of being “out of sync” with market realties

Charlot Zahra

Mobile phone operator Vodafone (Malta) Limited has reacted angrily to MCA Chairman Joseph V. Tabone’s comments in an interview with BusinessToday last week that in the past three years, the downward trend in mobile phone tariffs has “stalled somewhat”.
Joseph Cuschieri, Head of Legal, Regulatory and Corporate Affairs at Vodafone (Malta), said: “We totally disagree with the MCA Chairman’s views. It is also worrying that the Chairman of the MCA has this impression which in our view is not in sync with the market realities.”
Asked what steps Vodafone (Malta) will be taking to further reduce mobile phone tariffs, Cuschieri said: “Our prices have been following a constant downward trajectory which is proven by the increased take up and usage we have been experiencing.
“For example, if we had to compare our average retail price for the financial year ending March 2007 with that of the financial year ending March 2006, our average retail prices fell by 14 per cent year on year.
“Furthermore, we also reduced our roaming retail rates by 40 per cent with effect from 1 April 2007; well before the introduction of the Euro Tariff. We are expecting more or less the same downward trend in our retail prices for this financial year as well.
“If Mr Tabone compares the price reductions in mobile tariffs to other service industries, he will immediately realise that in most cases the prices went up and not down.
“The downward trend in mobile communications services prices is also confirmed by the MCA’s latest annual report where it is stated clearly that household consumption of electronic communications services showed a decline over the last four years.
“The annual report further states that this decline is attributable to lower general prices and increased sector competition!” he insisted.
On its part, arch-rival mobile phone operator GO Mobile was more cautious in its reaction to Tabone’s comments about the lack of reduction in mobile phone tariffs over the past three years.
Albert Gouder, Marketing Manager at GO Mobile, told BusinessToday: “GO Mobile owes its existence to the opening up of competition locally and has always endeavoured to compete by offering the best value to its customers.
“Over the past years GO Mobile has remained true to its promise to always offer advantageous rates for both prepaid and post-paid tariff plans and various other services,” Gouder said yesterday.
Asked what steps GO Mobile will be taking to further reduce mobile phone tariffs, Gouder said: “Within the prepaid sector GO Mobile was the first to offer its subscribers the lowest call rate of 3c per minute and SMS bundles that enable customers to benefit from a rate of 1c per SMS. The ‘Happy Hours’ initiative also proved to be very popular with its off-peak rate of 12c for an hour-long call.
“3.5G (HSDPA) has enabled the company to review its data plans offering very accessible data rates for the benefit of all users of wireless internet and e-mail.
“Various new, competitive post-paid tariff plans (Business 1,000, Business Unplugged and Intra-GroupPlans) have been launched over the past months including the considerable reduction in Roaming data and call rates.
“All this has resulted in significant savings for our customers over the past years in both the prepaid and post-paid segments,” Gouder said
GO Mobile, Vodafone refute ‘joint dominance’ classification
In the same interview, Tabone also remarked that the MCA’s recent market review concluded that Vodafone and GO Mobile “have joint dominance enabling us to impose remedies aimed at attaining more satisfactory levels of competition and price reductions”.
Asked whether Vodafone (Malta) agreed with the MCA’s assessment that the two mobile operators had “joint dominance” in the mobile phone market, Cuschieri told BusinessToday: “Our view is that the market is effectively competitive even though there are only two players i.e. Vodafone and GO.
“We do not agree with the MCA that just because there are two players in the market there is joint dominance. The intensity of competition and the continued innovation in new service offerings is testimony that our market is vibrant.”
“In fact, the MCA’s own statistics for mobile number portability support the view that our market is very competitive. One has to keep in mind that this is a ‘micro’ market by international standards and therefore one cannot expect the same number of players that can be found in larger countries such as Spain, UK, Greece and Portugal.
“Mr Tabone has to keep in mind that in order to maintain the same level of innovation and investment (like 3G, HSDPA, WiMax etc) taking into account the diseconomies of scale of the Maltese market, the industry players need to generate sufficient cash that can be re-invested in new technologies and services.
“As explained in our reply to your first question, we have been reducing our prices constantly by offering more free minutes, on-net pricing and providing great value to our customers.
“The increase in traffic we are experiencing over our network is evidence that our customers are using their mobile phone more and more because it has become cheaper to do so.
“This increase in mobile traffic is also reported by the MCA in their latest annual report. We will keep providing great value to our customers so that they can increase the use of their mobile phone for their social and business interactions,” Cuschieri said
Likewise, GO Mobile said that prices within the local market were still “very competitive” with both operators offering different and distinct services with different tariff plans and prices. “Intense competition for market share is very much felt as market penetration levels are still on the increase.
Competitive rivalry is very strong between both operators striving to launch distinct products and services in order to gain a competitive advantage and obtain a lead on innovation and better value.
GO Mobile was the first local operator to launch EDGE technology and the immediate benefit of TV ON YOUR MOBILE and worked hard to claim exclusive nationwide coverage of 3G and HSDPA (3.5G),” Gouder told BusinessToday.


08 August 2007
ISSUE NO. 498


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