In the face of new competitive and regulatory pressures, Maltacom is looking to the future with confidence, having become Malta’s first quadruple play operator in that the group can now offer bundles of fixed and mobile telephony, broadband internet and television services.

The development follows the group’s acquisition of Multiplus in February for an undisclosed amount.

Speaking at the Maltacom Group’s annual general meeting yesterday, chairman Sonny Portelli predicted that before the end of summer, Maltacom would be providing Multiplus services throughout the whole of Malta and Gozo, with a number of improvements such as better quality programming and added content.

Also speaking yesterday, group chief executive officer David Kay said there has been a “remarkable take-up of digital terrestrial television (DTTV) in the first months, which has been encouraging.”

Mr Portelli cited 2006 as having been a “good year” but also warned that numerous challenges lay ahead.

While the group’s fixed-line business continued to deteriorate over 2006, profits were bolstered by strong broadband, mobile and call-centre performance, which, in turn, provided new business for the group’s broadband operations.

The broadband business saw its client books grow by 30 per cent last year, while call-centre business grew by 50 per cent and go mobile continued to increase its market share over 2006.

These developments, coupled by strong growth in international telephony, have amply offset the decline in fixed-line profitability.

Mr Kay yesterday forecast further strong growth in broadband business over 2007. He added that the group’s mobile operations are facing serious challenges in the form of the recent European Union approval for a reduction in mobile roaming charges. Another regulation to allow Mobile Virtual Network Operators (MVNOs) to utilise Maltacom’s infrastructure, at a premium, was also seen as having a potentially detrimental effect on the group’s performance.

As such, strong market competition and the burdens of regulation were listed as among Maltacom’s greatest challenges.

Mr Kay added: “Today’s market is highly competitive with many competitors offering the same services as Maltacom. We will continue fighting this competition with prices and services. We have developed a good rhythm that now has to be maintained, while we will also have to adapt to new regulations, falling prices and new competitive threats.”

“Competition and the regulation of the sector have added to Maltacom’s challenges,” Mr Portelli said. “New regulations in 2006, such as in the areas of fixed-line telephony and number portability, had an impact on the company’s results.

“In 2007, meanwhile, we will have serious regulatory challenges, most particularly in the areas of roaming after the EU’s decision, as well as through the possible introduction of MVNOs.

“While competition is necessary, those who are regulating must bear in mind that Malta is a small country, and that what applies to large countries does not necessarily apply to the Maltese scenario. I hope the regulators understand what I am saying.”

The voluntary retirement scheme offered by the company last year, meanwhile, had taken a financial toll on the company, having cost Lm3.2 million. The funds, however, are expected to be recovered quickly as the scheme is expected to save the company some Lm1.5 million per annum through the shedding of over 200 workers.

Mr Portelli added: “This was no small amount and it had an effect on profits, but in the future it will have a substantial impact on our recurrent costs.”

He added that a new scheme, practically identical to the previous one, would be launched in October and that a number of employees have already accepted to participate in the scheme, while more were still in discussions with Maltacom officials overseeing the scheme.

Mr Portelli said: “It is not our intention to make anyone redundant as we continue determining the correct size for the company, and the VRS has been completely voluntary. As we go about this process, some employees will also be retrained for new opportunities such as in DTTV and call centres.”

In the coming weeks, Maltacom will be announcing a number of new products and services which will be aggressive in terms of competition, Mr Kay added.

During question time, a shareholder quizzed Mr Portelli about the disputed land in Qawra. Mr Portelli stressed the land in Qawra forms part of Maltacom’s assets and that the group holds the title to the land, of which there is no doubt.