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local
news
Commercially
sensitive mobile sector a consumer battleground
By David Lindsay
The price war ensuing between Malta's two mobile telephony operators,
as expected, has continued to escalate – making the industry
one of the most commercially sensitive on the islands.
go mobile fired the last shot following the telecoms regulator's
approval for a reduction in peak hour rates to its ‘Ready
to go' pre-paid package. Peak rates in the package were decreased
from 30c to 20c per minute.
The holiday season was responsible for an enormous boost to the
country's mobile penetration rate, which saw line subscriptions
leap by nearly 100 per cent over the last six months. The rate
currently stands at approximately 28 per cent at 110,000.
In fact, go mobile reported that five of its outlets had sold
a daily average of 300 mobile phone lines in the three days leading
up to Christmas.
Mobile phones penetration rates in other European countries generally
stand at 50 per cent, with countries such as Italy having a penetration
rate of about 70 per cent, demonstrating that there is still much
room for expansions to the operators' subscription lists. A fact
highlighted by industry estimates, which predict a 120 per cent
growth rate for each county in Europe.
Within its first months of operations, go mobile had managed to
capture a 5.3 per cent market share, with the remaining 94.7 per
cent still belonging to Vodafone. The company had sold 20,101
lines in its first month of operation and it aims to achieve the
40,000 mark by the year's end – a feat that appears increasingly
viable.
However, Vodafone undoubtedly holds market superiority, with its
subscriber list ready to welcome its 100,000th member in the immediate
future.
Both operators are promising to lower their rates even further
this year. However, much remains to be seen in terms of how these
operators will compete, not only against each other, but against
the economies of scale and whether there are enough potential
subscribers out there to keep both companies up and running healthily.
Much depends not only on sheer subscriber numbers but also on
the range of services offered by the operators involved. It is
not only the number of subscribers that matters for the profitability
in the sector – the range of services offered also provides
for healthy competition and profits.
Scope for growth in range of services, unlike growth in number
of subscribers, is practically unlimited. An example is "m-commerce"
– a type of transaction that allows consumers to conduct
monetary exchanges through a user's SIM card. One obviously simple
application for the technology is that users would be able to
pay bills over the phone instead of queuing at the bank, provided
local banks choose to adopt the facility. This service could eventually
be extended to shops, cinemas or any other retailer that chooses
to participate.
In keeping with the importance of offering consumers new functionality
to their mobile services, go mobile will launch its Information
on Demand service on a trial basis, free of charge to its customers
on 15 January.
Throughout the trial period, subscribers on the network will be
able to access information on sports, lotto, news, financial stock
quotes, exchange rates, horoscopes and a joke of the day.
This trial will lay the groundwork for the faster and more diverse
information services, when the General Packet Radio System (GPRS)
comes into operation in the second quarter of this year.
Exactly how both of Malta's mobile operators will take advantage
of both developing and existing technologies, however, still remains
to be seen.
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