Insight

Shaping the Gigabit Economy

Harald Rösch, CEO of telecoms operator Melita, intends to give Malta the best telecoms infrastructure in Europe.


Can you give us an introduction to Melita and explain your position in the overall telecoms landscape in Malta?

Melita has grown into the leading quadruple play provider in Malta. We are market leaders for TV services, we deliver approximately half of all broadband Internet connections in Malta and now also have more than 100,000 active mobile subscribers. Over recent years Melita has completed substantial infrastructure investments. Together with the investments of ourcompetitors these have enabled Malta to be placed at the top of
the European charts for next-generation broadband coverage. Melita’s investments include a nationwide deployment of nextgeneration broadband with speeds up to 250Mbps. We have invested in a nationwide 3G mobile network, a submarine cable connecting Malta to mainland Europe, the construction of a tier III state-of-the-art data centre for co-location and hosting services, as well as the roll-out of Melita WIFI – the next-generation Wi- Fi service providing seamless superfast connectivity across Malta and Gozo. We had plans to join forces with Vodafone Malta but decided not to go ahead with the merger as we were unable to meet the conditions stipulated by the competition authority. However, this decision does not really affect our future plans, and we will continue investing in our network.


You recently said that Malta will soon have the strongest and fastest telecoms network in Europe. Can you tell us more about your plans and priorities?

Malta already has a very strong telecoms infrastructure, and we want to build on this. In Malta we have recently introduced gigabit speed internet. This is already commercially available in St Julian’s, Sliema and Valletta and will be rolled out nationwide shortly. Malta will soon have a gigabit infrastructure on the fixed side everywhere, and this is something very unique. I don’t think other countries can achieve this as quickly as Malta can. We will see it rolled out in many urban areas but not in the entire nation. On the mobile side, Malta has three networks, two of which are currently already quite advanced. Now we will invest significantly in our network as well and upgrade it to the latest 4.5G standards. Even 5G is around the corner. I can very well imagine that Malta will be the first country to deploy 5G in Europe, and we are expecting this to happen in 2019 or 2020.
We will also further invest in our connectivity to Europe. Our international connections to the big Internet Exchange points on the continent are exceeding 100 Gbps now and will soon be fully redundant with the use of multiple carriers on land, as well as full redundancy over a second undersea cable.

 

What’s your relationship with Malta’s gaming community?

I think it is fair to say that traditionally many companies used to look first at what our competitor GO, and in particular their data centre, had on offer. For many years, Melita’s focus was on the retail segment and not so much on the business-to-business (B2B) offering. But we are firmly committed to strengthening our B2B offering, and the upgrade of our data centre was just the first step. Over the past years, we invested quite significantly in our data centre, and this has put us in a very strong position. In fact, in 2017 we invested €20 million, and a significant part of it was channelled towards the further development of our data centre and dedicated local and international connectivity for B2B customers. These investments have helped us to attract some well-known brands in the gaming industry.

 

Can you tell us more about the data centre services?

We have recently extended our data centre and effectively doubled our capacity. Our data centre has been built to Tier IIIspecifications and covers a fully fenced footprint of 10,000 m2. This means the facility is also the largest and most unique of its kind in Malta. The take-up has been quite positive with client racks hosted doubling year on year.

We run a mature and nationwide fibre optic network and provide our data centre peers with leading Tier 1 providers. We offer access to redundant submarine cable links towards mainland Europe, as well as private leased circuits for international point-to-point Ethernet connections. Not only do we score high in terms of diversity of access, but we are also very quick. For instance, in the past it used to take between three to six months to deliver a circuit from Malta to Milan. Due to our recent investment, it now only takes a couple of weeks. This is of particular interest to gaming companies who need their own secure route.

 

Many companies comment on the high cost of bandwidth in Malta. What’s your view on this issue?

I can say that as soon as we introduced our own submarine cable and our own data centre, we forced the cost per megabit down drastically. Some customers may still view bandwidth costs as high as they are still tied to legacy agreements with other providers, which are a result of a time when the infrastructure in Malta was less well developed and Malta had less competition. We are always happy to talk to igaming and other companies and help them reduce their hosting and connectivity costs.

When compared to mainland providers it is also fair to say that Maltese operators do face additional costs when delivering connectivity because Malta is an island. Melita owns the infrastructure as far as to Sicily, but from then onwards we need to buy access, so we have very little influence on pricing. However, I don’t think we have lost business because of price. Most companies see cost as a whole. The slightly higher cost of the broadband as a result of being far away from mainland Europe is cushioned by the fact that operations here generally cost less. It is also a fact that on the retail and the business side we offer a competitive packages comparable to European pricing. In terms of bandwidth, the question is always how much sharing the business can accept.

 

Do you see a way that Malta could become, while not the cheapest in Europe, still a competitive option?

I think that there is a great opportunity to play ‘the best connectivity card’. Malta’s telecoms infrastructure offers great appeal to anyone in the online world, and in particular to tech start-ups. We are approaching another digital transformation with the Internet of Things (IoT), and Malta is a great place for trials and testing of new technologies considering the level of connectivity available and the incentives that the government is putting in.

 

Businesses are increasingly using remote workers. How can Melita help companies connect and manage this mobile workforce?

In Malta, companies can get our 1Gig internet speed at home. If they are based in another location somewhere in the world, we would usually advise to set up a virtual private network (VPN), which will be the most cost-effective solution.

 

How do you expect Malta’s telecoms landscape to evolve?

One segment that I think will see massive improvements in the coming years is customer care. I joined 18 months ago and since then, we have already made huge improvements. Our ‘Net Promoter Score’ - the commonly used metric of customer loyalty based on whether people would recommend a company to a friend, has risen from negative values in July 2016, to very high positive levels a year later.

I also have no doubt that we will drastically improve the telecoms infrastructure. We have always stated that we are committed to our plans, no matter whether the merger with Vodafone goes ahead or not. In addition to our own plans, I think we also need to look at bringing more telecoms infrastructure underground. The government’s decision to invest in Malta’s road infrastructure means now is the ideal time for this to happen,but we at Melita cannot do this on our own. This requires a joint effort by all stakeholders.

 

Harald Rösch joined Melita in April 2016. Previously he was CEO of Blizoo, the largest cable operator in Bulgaria; CEO of Kabel Baden-Württemberg and CEO of HanseNet in Germany and head of the Internet division of Telecom Italia. He also worked for six years at McKinsey&Co and held several Board positions including Sky Deutschland, United Digital Group, Internetstores and Seat Pagine Gialle. Harald holds an MBA from INSEAD.

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