The Malta Communications Authority (MCA) is committed to provide regular updates on the main developments in the electronic communications and postal sectors in Malta.
To this effect, this press briefing draws on the findings of the Communications Market Review (CMR) published by the MCA, covering the period January to June 2016.
The CMR is published on a bi-annual basis and highlights trends observed over the last few years and latest market outcomes in the afore-mentioned sectors. All CMR publications can be viewed on the MCA’s website at www.mca.org.mt.
Electronic communications: January to June 2016
The demand for various electronic communication services, specifically fixed broadband, mobile telephony and fixed telephony continued to go from strength to strength during the first six months of this year. Consumers are also increasingly tending towards bundled packages, particularly triple play bundles, rather than stand-alone products in view of the fact that bundled prices are more advantageous than the sum of stand-alone prices. Of note is that 75% of all fixed broadband subscriptions recorded at the end of last June formed part of a bundle, which represents a six percentage point rise in 12 months.
Mobile telephony
The mobile telephony sector continues to exhibit a solid performance, with subscriptions and voice traffic volumes continuously on the increase. Mobile subscriptions increased by 2% over a 12-month period ending last June, which translates to an increase of 10,371 subscriptions. A look at developments by type of subscription during this period shows that the number of post-paid subscriptions increased by 19,700 compared to a drop of around 9,300 pre-paid subscriptions. In terms of usage, the number of mobile calls made dipped by a light 0.5%. However, on the positive side, consumers are in fact spending more time on their calls, with minutes increasing by 4% to reach 394.7 million reported in the first half of this year. This in contrast an 11.3% decline in the number of SMSs. Improved minute allowances and falling average rates per minute of communication could potentially explain the drive towards this growing trend.
The usage of mobile data services in the first six months of this year also continued to grow when compared to the same period in 2015. In fact, the number of end-users actively using mobile broadband services was up by around 14,000 (or by 5.1%) between June 2015 and June 2016. This increase comes on the back of a rapid uptake of smart-phones, tablet computers and laptops, especially as local service providers continue offering such devices at discounted prices in combination with mobile telephony plans.
The positive developments for the mobile sector translated in improved revenue streams for local service providers offering these services. In fact, the Average Revenue per User (ARPU) for mobile telephony in the first half of 2016 stood at €87.19, up from €86.89 in the first half of the previous year.
Fixed telephony
With the rising popularity of mobile voice telephony services, the fixed telephony sector recorded some expected declines in usage, while experiencing a marginal increase in the subscriber base. Over a 12 month period to the end of June this year, fixed telephony subscriptions increased by 1.2% (2,801 subscriptions). Despite this increase, declines were recorded in the number of outgoing fixed line calls reported, which in the first half of 2016 were down by 8.7% compared to the same period a year earlier. Contrary to the mobile sector, the decline in the number of fixed calls was also mirrored in the number of voice call minutes, which declined by 7.4%. Such developments continue to confirm the year-on-year trend towards mobile substitution.
This trend has pulled the ARPU for the fixed line down, with figures falling to €72.37 in the first half of 2016 from €76.42 in the first half of last year.
Fixed broadband
The broadband sector is one of the most positively performing sectors, with growth recorded across most indicators. The overall number of subscriptions keep increasing year-on-year, particularly for products offering higher download speeds. The fixed broadband subscriber base totalled around 168,000 at the end of last June, with the number of fixed broadband subscriptions supporting superfast download speeds (i.e. download speeds of 30Mbps or higher) almost topped 100,000. This latter figure is up by 9,349 (or by 10.3%) when compared to the number of such subscriptions recorded a year earlier.
Underlying the considerable jump in take-up of superfast fixed broadband is the continued drive by service providers to upgrade existing customers to these products and the occasional offers and discounts that characterise this product range, particularly when purchased as part of a bundle. Fixed broadband subscriptions supporting download speeds of 30Mbps or higher now represent 59.4% of the local fixed broadband subscriber base, up from 57% a year earlier.
The increasing proportion of fixed broadband connections on super-fast download speeds has contributed towards an improved ARPU. Fixed broadband ARPU for the first half of 2016 stood at €95.75, up by 7.1% from €89.34 in the first half of the previous year. This increase in ARPU happened at a time when the average price per Mbit was down by almost 29% year-on-year.
Pay TV
With regard to the pay TV sector, subscriptions at the end of last June fell marginally by 268, compared to June 2015. Meanwhile, the proportion of pay TV subscriptions purchased in a bundle went up by almost three percentage points, from 55.1% to 57.9%. With these developments in the subscriber base and the generally unchanged price base for pay TV services, ARPU for this sector in the first half of 2016 was down by 2.3% compared to that reported in the first half of 2015.
Post
Postal mail volumes recorded in the first half of this year were slightly down when compared to those recorded a year earlier, from 18.8 million to 18.7 million, in line with long-term market trends. Notwithstanding the overall decline, parcel mail volumes and registered mail volumes were stronger in the first half of 2016 than in the same period of 2015. Registered mail was up by 18% whilst parcel mail was up by 10%. These increases are mainly attributable to an ever more buoyant eCommerce activity. Meanwhile, standard mail volumes, which primarily consist of letter mail items and bulk mail items, and which account to almost 95% all mail activity recorded in the current review period, were down by 0.2 million (or by 1.4%) from almost 18.0 million to 17.7 million.
Full details of the main market outcomes for the electronic communications and postal sectors are presented in the latest CMR publication, which is found on the MCA website at http://mca.org.mt/articles/communications-market-review-january-june-2016.