Malta’s digital economy : developing connectivity for a small EU member state

Abstract

Internet use has taken a leap from its early days and has transformed itself into an enabler of new business models, supporting a complex value chain that includes the broadband operators, governments, enterprises and individual users. The electronic communications industry in Malta is not sheltered – it needs to adapt with time and environment. The Europe 2020 strategy for smart, sustainable and inclusive growth places access to competitively-priced fast and ultra-fast internet as a key policy pillar. Capturing the role of broadband in leveraging a country’s competitiveness and its citizens’ welfare, the study shall assess how Malta is positioned to achieve the Europe 2020 broadband targets, as a measure of the manner in which Malta is leveraging broadband connectivity to enhance its competitiveness and growth. In an industry where the demand responds to the supply this study shall, as its second purpose, adopt a mixed research approach to assess the obstacles to providing broadband connectivity in Malta. In adopting a forward-looking approach the study shall, as its third purpose, make recommendations to support increased access to competitively priced faster broadband connectivity in Malta as a small member state. Among its findings, the study presents a broadband industry dominated by two operators, with a relative low investment to revenue ratio and with high retail broadband prices. The study presents a reactionary industry that relies on revenue from the gaming and the financial services industry. The study finds that rather than leveraging innovation, the broadband industry expects the Government to attract new industry verticals. Acknowledging the role that the creation of a digital economy has on Malta’s economic, social and political landscape, the study makes a number of recommendations on developing connectivity for Malta. The study encourages the setting of policies that complement sector-specific legislation to facilitate the leveraging of broadband connectivity by enterprises and to empower citizens to be part of the digital economy.