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Julian Manduca
Computer suppliers and dealers are up in arms over a government plan to flood the market with cheaper computers. Those that buy and sell computers now do not only have the uncertain eco-tax rates to worry about, but are even more disillusioned with the government’s plans to make available thousands of HP computers at very low prices to students.
The plans were the subject of a heated meeting Friday evening at the GRTU offices a meeting that was described as similar to those that were held in the same offices when the GRTU was up in arms against the bulk buying of the Labour government of the 70s and 80s.
‘Bulk buying’ were the words on everybody’s lips at the meeting and MaltaToday is informed that importers and suppliers of computers and accessories are so livid that they have started collecting money to create a fund to fight the measure.
On its part the ministry for Information Technology rejects the comparison and a ministry spokesperson contacted yesterday said: “There’s absolutely no comparison. Government is not buying anything let alone bulk buying.” In truth, the government will not be buying computers but has brokered the deal with HP and will be marketing the computers.
MaltaToday is informed that the ministry for Information Technology is striking a deal which will mean that the two Maltese agents for HP computers will be selling computers at a price of about Lm280, which is at least Lm100 lower than the market price to all students that apply for them.
Speaking to this newspaper the vice-president of the GRTU and president of its IT section Joe Tabone said: “We never expected to see a minister standing in front of the logo of a particular brand, in 2005.”
“It is unacceptable that the government will be marketing the brand of one particular company, irrespective of whether this is for computers or other products. The government should not be interfering in the market in this way.”
“When the GRTU was involved in talks with minister Austin Gatt and his ministry we welcomed plans to make computers available to as many people as possible, but we expected that all importers would be involved. What has happened has come as a surprise and we find it unacceptable that one particular company will be given extra mileage by a ministry.”
When MaltaToday asked the ministry how it could justify marketing the products of only one company, the ministry spokesperson let on that the government would be ready to involve other computer companies: “It has been declared numerous times that the ministry is ready to work with all
reputable companies who are ready to commit to the local information society.
“Should any other company decide to make such advantageous offers of high quality equipment to Maltese students, we will be greatly delighted to facilitate that. This was confirmed yesterday verbally by the Head of the
Minister's Secretariat to the Secretary General of the GRTU.”
The computer traders disagree saying what the government is doing is exactly what was done during the bulk buying time – the worst time for business in Malta – when it negotiated a cheaper price with foreign producers by cutting out the commissions and availing itself of bulk discounts.
On its part the ministry for IT has embarked on an ambitious campaign to bridge the digital divide. The ministry’s plans intend to make Malta a leader as far as IT is concerned and include aims so that by 2006: 90 per cent of Maltese businesses will be on-line and 75 percent of Maltese households will be connected to the internet; 60 per cent of Maltese internet users would be hooked to a broadband connection; our educational system will prepare 500 new IT specialists every year; everyone’s medical history will be carried in our own pockets and Malta will have a donor programme aimed at assisting countries with IT. As far as hardware is concerned the government’s stated aim is “making sure the price is right.”
When MaltaToday asked how the ministry would ensure that only those that could not afford the market price would be able to buy the cheaper computers, the ministry replied that the cheaper computers would be supplied to all: “In all the vertical strategic alliances we make we ensure that our partners provide access to these technologies to everyone without any exception.”
The GRTU was also involved in the talks to promote IT, but those attending the meeting on Friday said that it never agreed that the government should go behind their back to offer computers of one brand, and in this case of two agents while ignoring the rest.
As has happened with the Microsoft software that has attracted thousands, the government is not putting any limit on the number of computers that will be offered. The first offer of a software package at a very cheap price was made in 2003 and was taken up by 32,000 students. Judging by the queues in Valletta yesterday that success was repeated.
While the importers of computers and accessories were not so worried about government’s provision of software “because of the culture of software copying” in Malta, they fear that if government goes ahead with its plans only the two agents of HP in Malta will benefit.
The market will be flooded with HP products and only the agents of that brand would be providing accessories and carrying out repairs. Up until now many shops have sold HP computers and products, but with the new deal the profit margin will be too low for any traders except the agents of HP to continue in the market.
The ministry for IT denied it would be interfering in the market and told MaltaToday: “All we did was that as part of the negotiations we had with HP we pushed the latter to make its technology more affordable to the local information society. There is no subsidy, no funding, no guaranteed numbers and no purchasing from Government.
We expressed with HP that our objective was to make technologies more accessible and affordable, they understood that and they offered their latest technologies at reduced prices for the Maltese students to take the maximum advantage. On the contrary of interference, this is a smart way of market forces at play.
“There is a clear political rationale in this: one of the secrets of developing an information society is affordability of quality and reliable equipment. This is also explicitly recognised in the National ICT Strategy 2004 - 2006 as a clear and announced action line which was also approved by the GRTU itself, which is represented on the National Information Society Advisory Council.
“Affordability is not attained through lip service but through tangible initiatives which will make a significant positive impact on the disposable income of the households, especially the underprivileged. Simply talking about it, writing it in glossy strategies and doing nothing about it will not get us anywhere.”
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