Interview | Wednesday, 11 June 2008

Enter the Swiss factor

In a wide-ranging interview, Melita Cable Chief Operating Officer (COO) Stephen Wright speaks to CHARLOT ZAHRA about Melita’s transition from a cable operator into a fully-fledged quad-play giant in less than two years

What is your initial assessment of Melita’s finances and workforce? Are you satisfied?
Melita’s finances are solid and our business is growing considerably. TV, Internet and Telephony are all developing well.
I am delighted with our workforce; they are highly skilled, motivated and great colleagues to work with. We have a great mixture of experienced Melita people and some new faces to bring additional know-how into the team.
We are growing: we’re developing more, and we’re also developing our people further in order to take up the new challenges of the company. Therefore I am very pleased with where we are, but obviously there’s a great expectation to develop further.

Which are your areas of concern?
As with all growing companies, we need to develop our operations further and we are investing in our Network infrastructure, IT systems and Customer Care. All this will result in an even better and seamless service to our customers across all our products. That’s always our ultimate aim.

How is Melita progressing with its plan for the rollout of its 3G mobile telephony licence? Are you on schedule?
For mobile 3G services we’re happy with how things are going. As we are building our own network, we’re acquiring sites, we’re implementing systems, we’re building customer care, so we’re very busy and very excited.

When is the roll-up scheduled to start?
The date of our launch is something that we’re going to keep to ourselves for now, but our intention is to be on the market as soon as possible with the 3G mobile services, and that’s what we’re focused on.

Do you believe there is enough market space for a third mobile operator in Malta?
Mobile complements the services that Melita offers, so to be an integrated quad-player for customers to be able to get all the services that they need from one operator, is not only interesting but also very convenient for customers in this market. We have seen how this works in other markets, and Malta is just as viable.

Seeing that in a BT interview former GO Mobile Director of Operations Peter Gauci had commented: “Now 3G in Malta requires a larger number of base stations than any 3G setup in most other countries”, and seeing that new MCA chief Philip Micallef had said in another BT interview that, in spite of a lower cost of equipment, more base stations are required for 3G – is it not a matter of concern for Melita to locate enough sites, especially when bearing in mind that Malta is limited as to the number of property it can offer at a reasonable market value?
We’re building our base stations, we’re negotiating with owners of shops for our new outlets, there are many opportunities in Malta and we have found lots of willingness to support our rollout from Malta’s business community.

Would it make sense for Melita to pass through a re-branding process now that it is settling into a quad-play setup?
Yes it would make sense.

Do you have any plans for that?
Yes. We’re not looking at a total re-branding, but re-invigorating everything that we’re doing at the moment.
We’re looking at all our areas, PR, branding, and making the necessary investments to ensure that Melita remains in a leading position and develops into the top company that provides quad-band services in the market…

Is Melita considering centralising the brand for mobile phone services, or any other services you offer?
We’re looking all over our positioning. We’re looking to see what is the best position would be to grow all our services further.

What is your relationship with the MCA, which is, after all, your regulator? Do you believe that the MCA is an effective regulator?
Absolutely yes. Our relationship with the regulator is actually very good. I am pleased that we have a regulator that has an understanding of the industry and who understands many of the issues that we and other operators face.

Which are those areas where the MCA has been effective? Which are those areas where the MCA can be more effective?
Even as of last week, the MCA retracted its statements on broadband which was the correct position to take. Going forward, I’m sure the MCA is focused on consumer services and getting the best for Malta.

Is it not awkward replying to the MCA Chairman as regulator who was your CEO and knows your plans inside out?
Of course not. I think our previous CEO did a very good job for the company and it’s a natural progression for him to move on to the MCA. I think he has a great role in what he’s doing and we have a good relationship. We know he understands our business and the chairman will always be fair and professional.

What is your reaction to MCA’s ruling on broadband infrastructure which effectively sees the regulator proposing the removal of the Significant Market Power status conferred to GO and Melita in this market?
As I said before, I think it is a mature statement by the regulator to correct its previous position. I think it was the right thing to do.

Do you believe that this will lead to further consolidation in the broadband market to the detriment of alternative ISPs or not?
We may see some consolidation but that is not necessarily bad. Lets see how the market develops…

Irrespective of the MCA’s ruling, is Melita ready to offer broadband Internet on a wholesale basis to other ISPs?
We’re open to all those discussions. The most important position that we take is to guarantee the best services to our customers. There is no general hard view on wholesale – it’s basically what would help us to grow our business and be more successful.

As the telecoms market in Malta is becoming more streamlined and consolidated than ever, is the company downsizing its workforce?
We’re growing. If you look at all the operators in Malta in the communications field, we’re the only one that is growing. We’re going from 200 to 300 employees; we’re at 250 at the moment.
We’re also implementing development programmes to further train our people in new services and new technologies. We’re investing millions of Euros directly into the company and into Malta.

The competition in the television market has become intensive more than ever, with GO’s acquisition of network operator Multiplus in February 2007. GO Plus TV garnered 25,000 subscribers in a year and snatched important TV rights which were historically held by Melita such as the FA Cup and the England national football teams matches. What is your reaction to these developments?
It’s good to have competition but our TV products are still growing strong.
Moreover, we will always bid for the rights that we think are most valued by our customers. Some of those rights we’ll win and some not. However we are seeing the sharing of rights as a developing trend.

How is Melita fighting back?
It’s not a question of fighting back. I don’t see it like that; I respect the competition. We need to listen to our customers and we need to listen to what they’re looking for. Like every successful company we need to further evolve our services and products to meet our customers’ needs.
So we’re looking to enrich all our channel line-ups, our movie channels, our sports content, above and beyond football.
Once we launch mobile, everybody will be wanting a mobile from Melita because of the content that we will be able to provide. And we see these converged services coming together.
Our new position is that all our services are integrated. We already provide one service to the customers, and it will be no different when we have mobile.

Despite the fact that the turn-off date for analogue TV in Malta is less than two years away, there are still a substantial number of subscribers who are still connected to the analogue cable platform. What is Melita doing to lure customers to transfer on the Digital platform?
Thousands of customers are migrating to the digital platform every day, and we’re helping them with that. We see digital as the way forward. Things like High Definition (HD) are key. HD if valued by customers everywhere in the world. The number one electronic sale in Malta last year was for TV sets.
All those TVs have HD, so we see digital as key. For those customers who are on analogue right now, we’re helping them to move to digital by providing a seamless switch over and competitive pricing. And they’re moving by the thousands.

Are you considering giving free set-top boxes to incentivise those who have not made the switch to digital?
Not really, no. I don’t think it’s just a question of a free box, I think it’s providing good quality content, and that’s where our focus is. We’re investing many millions into the TV side of our business and to improve our existing technologies.
We’re the only TV operator in Malta right now that has the capability of offering HD… We’re increasing the whole line-up of our channels by providing new, exciting content.

On the other hand, Melita’s has made significant inroads in the fixed telephony market, which historically has been a GO monopoly. Are you satisfied with the uptake of the Hello service so far?
We’re very satisfied with the take-up, and it’s growing more and more every day. That’s clearly a very big growth area for Melita, and all our other product lines are growing as well. We’re satisfied, but we’ve still go a long way to go.

Do you see further room for growth?
A lot more. We’ve only just started.

Is Melita planning to set up its own international gateway or not?
Of course. We’ve already committed to do that. We have an ongoing project for a new submarine cable, so our plans are well under way to achieve the new cable as we have already expressed before.
This will be a connection to Sicily and it’s part of being independent and offering improved services to our customers. We’re looking at faster bandwidth speeds, we’re looking at improved content, and for that we need the new pipeline.

What is the time-frame for this project?
These projects normally take around 12 months to complete. So I would say mid-next year we will be up and running with all this new content and the capabilities.

Recently Melita issued a call for the post of Chief Financial Officer. Why did the company feel the need for this new role within its management?
As the company is growing now, and will grow even further with mobile, the financial demands of the company are becoming more sophisticated and the company feels, going forward and looking into the future, that we need to strengthen our financial focus on the international markets.

Did you find sufficient local talent?
There is local talent for the new managers that we’ve been adding. We’ve found all Maltese people. But the financial role is a demanding one due to its international exposure, we’re still looking…
Our wish has always been, like the other positions, that we recruit locally.

Melita’s cable infrastructure is now 18 years old. Are there any plans for its replacement?
Melita’s infrastructure is far superior than the competition’s infrastructure. We’ve been continually improving and expanding that. It’s no different this year. This year we’re doubling our resources on our infrastructure and we’re very pleased with it.
It is not an old infrastructure; it is an established infrastructure, but it has a lot of new components that will deliver new improve services. The objective is that we provide new and exciting content that Malta has never seen before for our customers to enjoy.
We have the advantage of having a bigger pipe to the home. We don’t have a piece of old copper. And we’re going to make the most of this to ensure that the customers get an improved entertainment experience.

What are the time-frames for its replacement?
Wherever we need to replace, we’re replacing. We are developing new and exciting entertainment platforms that deliver added value for our new and existing customers


11 June 2008

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