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Matthew Vella
The CEOs of Malta’s three main telecoms groups have told the Malta Communications Authority it is charging the highest fees in Europe when the island’s telecoms sector is the smallest among the 25 member states. And they want their money back, too.
In an official complaint sent to Communications Minister Censu Galea and MCA chairman Joseph V. Tabone, the three chiefs said authorisation fees for their mobile phone and other services were “unreasonably high” in spite of Malta having the smallest market in the EU.
Joining forces despite an ongoing feud between Maltacom and Melita Cable over an interconnection agreement, the two operators and Vodafone Malta complained that they were paying the highest authorisation fees in the EU on a proportional basis.
That means that on a Lm10 million turnover, a Maltese telecoms company would pay Lm161,500 in authorisation fees – the highest after Italy, which charges a flat Lm76,400 on similar turnover.
“Authorisation fees are 25 times those paid by a UK operator… similarly, in the case of spectrum fees, Vodafone and go Mobile pay fees 10 times higher than in the UK,” the three companies said.
They also said the MCA was charging fees in excess of the funds it needed to conduct its regulatory role, ignoring recommendations by the European Commission that charges should cover “only the actual administrative costs” of managing the authorisation system.
The three companies urged Censu Galea to revise the fees and refund them all the excess payments they made to the MCA as a result of the incorrect application of the law, claiming that around 4 per cent of their revenues were being paid in fees to the authority.
One of their main complaints related to the MCA charges on interconnectivity. When a Go Mobile subscriber calling a Vodafone number at, for example, 8c per minute, this results in Go Mobile paying 3c on each minute to Vodafone for terminating the call on its network.
For Go Mobile this means booking 8c as its gross revenue, and later deducting the 3c payment to Vodafone as an operating cost, netting a 5c revenue.
But since the MCA charges its fees to operators on their total gross revenues, it means it charges both Go Mobile and Vodafone on the 8c and 3c each have respectively booked as gross revenues.
“The interconnection costs implicit in the total gross revenue figures of each operators are being doubly charged,” the three operators said yesterday, urging the MCA to levy its charges on gross revenues less payments to third parties on interconnection rates.
“We feel the current practice is creating an unnecessary and unfair burden on the industry simply because the underlying principles of the previous and existing regularity fees regime are being wrongly applied.”
The three companies also said they were paying annual fees to establish their facilities on public properties, when other operators such as water and energy companies, were not obliged to pay these right of way fees.
“This targeting of one sector constitutes discriminatory treatment,” the companies said about the minimum Lm120,000 charge. “In terms of European Community law, financial contributions for rights of use must be objectively justified, transparent, proportionate, and non-discriminative.”
The European Commission is currently looking into the annual charges and fees imposed by the MCA which include Lm20,000 to operate public networks and an additional 1.5 per cent of their gross revenue. Mobile operators also pay Lm1,500 plus 2.5 per cent of gross revenues. Every service provider also pays 15c for each allocated number. In addition, the new laws also impose a fee of 0.4 per cent of gross revenue on rights of way, which is not less than Lm120,000 every year.
The letter was signed by Vodafone CEO Hatem Dowidar, Maltacom Group’s CEO David Kay, and Melita Cable CEO Philip Micallef.
mvella@mediatoday.com.mt
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