In its analysis, the Malta Communications Authority (MCA) concludes that the scope of the wholesale product market encompasses access to copper and fibre network, as well as access to the physical infrastructure (ducts).
Currently, in Malta there are two nationwide networks: GO, the telco incumbent, which provides services based on its copper network, as well as offers fibre to approximately 70% of households (growing trend); and Melita, which has a full nationwide CaTV coverage. A third network, based on fibre and owned by Epic, covers only part of Malta. To date, in addition to developing its own network, Epic is relying on GO’s infrastructure.
The Maltese regulator, in its proposed regulatory measure, finds GO to hold a significant market power (SMP) on the market. The MCA excludes from its analysis of the wholesale product market other technologies, such as CaTV, and concludes that GO maintains a very high market share in physical and virtual unbundled access. With regard to physical infrastructure (ducts), the MCA also excludes non-electronic communications network(s) providers from the scope of the defined wholesale market. As a consequence, the MCA intends to impose access regulation (both active and passive) exclusively on GO’s network.
In its serious doubts letter, opening the Phase 2 investigation, the Commission focused on the competition problem at retail level, given that:
- in a market with a population of 500 000 inhabitants, there are already two parallel networks providing gigabit connectivity, with a third operator which entered the market with its own network and is progressively expanding, albeit with a low take-up;
- the prices for standalone or bundled with fixed telephony internet are slightly higher than the EU average, but the price trend is downwards, as in 2023 both operators offer better quality for the same price, or lower price for the same quality/speed compared to 2019. The Triple Play offers (fixed internet and telephony, in addition to TV services) are below the EU average level.
- There is an increasing trend of consumer satisfaction with telco services, as recorded in the surveys conducted by the MCA.
Given the current degree of investments, retail prices, and already existing infrastructure-based competition, the market appears to tend towards effective competition.
Finally, the Commission has serious doubts on the MCA’s methodological approach, as it has not taken into account the competitive pressure exerted on the alleged SMP operator by CaTV operator Melita, which is in fact the largest broadband provider in Malta by number of customers.
The Commission therefore has serious doubts as to the compatibility of the related draft measures with EU law and considers it necessary to initiate an in-depth investigation.
The Commission has two months to further investigate the draft measures and the evidence presented therein, in close cooperation with the Body of European regulators (BEREC). At the end of the Phase II investigation period, the Commission may either lift its reservations or issue a veto under Article 32 of the European Electronic Communications Code. During this period, the MCA will not be able to adopt its draft measures.
The Commission’s serious doubts letter opening the in-depth investigation will be available online on CIRCABC.
The invitation to third parties to submit their observations will be published in CIRCABC.