The year 2016 experienced a continued increase in uptake for fixed and mobile telephony services, alongside stronger demand for fixed and mobile data services, the Malta Communications Authority said.
The Communications Market Review for the period July to December 2016 found that only the pay TV sector went against this trend, as the sector witnessed a decline in take-up. Underlying these changes is the increasing proportion of end-users opting for a bundled subscription.
Mobile telephony consolidated its position as the most commonly used form of voice communication in Malta, with 807.6 million voice call minutes registered in 2016, representing a 4.7% increase in traffic volumes over the previous year.
This contrasts sharply with developments for the fixed telephony sector, where voice minute traffic volumes dipped by 7.7% year-on-year. Notwithstanding the decline in traffic volumes, the fixed telephony subscriber base strengthened year-on-year, with 4,157 more subscriptions reported at the end of the reporting period.
This shows that people still value having a fixed line connection at home or at their business premises, even though their usage of the service is falling.
The mobile sector also registered an upward trend in take up, with the number of subscriptions going up by 6.3% year-on-year to reach 592,923 by the end of 2016.
Whilst the on-going growth in the mobile telephony subscriber base partly reflects the trend of end-users purchasing multiple connections instead of switching, changing consumer preferences (particularly in the use of mobile data services) contribute significantly to the increase.
Meanwhile, improved minute allowances and falling average rates per minute of communication contribute to the increase in mobile voice traffic volumes. The positive developments for the mobile sector did not however translate in improved revenue streams on a per user level for local service providers. In fact, mobile telephony ARPU in 2016 stood at €177.38, down by 2.2% from €181.37 in 2015.
The spread of consumption by end-users over their multiple subscriptions contributes to the drop in mobile telephony ARPU, alongside falling average rates per minute of voice communication and improved data and minute allowances.
The fixed telephony sector registered a bigger drop in ARPU, with this indicator sliding by of 5.7% from €151.46 in 2015 to €142.77 in 2016. The main factor explaining the drop in fixed line telephony ARPU is the significant decline reported in terms of voice traffic volumes.
Another important trend concerns the changing consumer preferences in view of mobile data usage levels. It is of note that the number of end-users actively using mobile broadband services was up by almost 39,000 (or by 14.4%) between December 2015 and December 2016. This increase coincides with the rising popularity of mobile applications, social networking and other online activities, which all contribute to a stronger take-up of mobile data plans.
There have also been instances where service providers offered more generous data allowances, thus enticing end-users to make higher use of mobile broadband data services. Take-up of fixed broadband strengthened in 2016, with 8,088 new customers added to the local subscriber base. This increase in take-up pushed up the fixed broadband penetration rate to 39.0% by the end of 2016, compared to 37.6% a year earlier.
The customer profile for the sector changed considerably last year, as service providers notified their clients that some legacy products were being withdrawn and eventually customers switched to connections supporting faster download speeds of 30Mbps or more. Of note is that the number of fixed broadband subscriptions supporting download speeds of 30Mbps or higher at the end of last year stood at almost 101,755. This figure is up by 3,822 (or by 3.9%) when compared to the number of such subscriptions recorded a year earlier.
Fixed broadband subscriptions supporting download speeds of 30Mbps or higher now represent 59.4% of the local fixed broadband subscriber base. Take-up of fixed broadband in a bundle remained very popular in 2016, with the proportion of such subscriptions rising from 72.7% at the end of 2015 to 78.7% at the end of last year. The increasing number of fixed broadband connections on super-fast download speeds enabled local service providers to improve ARPU by almost 10.0%, from €181.45 in 2015 to €199.45 in 2016.
This increase in ARPU happened at a time when the average price per Mbit was down by 26.3% year-on-year. The falling take-up of pay TV contrasts with the positive developments in take-up reported for other electronic communications services.
The pay TV sector has seen its subscriber base shrink by 1.1% year-on- year, from 149,378 subscriptions at the end of 2015 to 147,756 subscriptions at the end of the current reporting period. One common explanation to this trend is the rise in the popularity of online video streaming services, like YouTube, Netflix, Skype and Internet Protocol Television.
The MCA does not have the actual figures as to the number of people actively using these services. However, surveys carried out regularly by the MCA indicate a consistent rise in take-up of such services.
Another important trend concerning the pay TV sector is the rising proportion of end-users purchasing their pay TV service in a bundle. The proportion of pay TV subscriptions purchased in a bundle went up by 4.4 percentage points between 2015 and 2016, from 56.0% to 60.4%. These latest changes in take-up of pay TV weighed significantly on the sector's revenue side, as evidenced by the year-on-year decline in ARPU reported by local service providers.
As for the postal sector, developments were in line to long-term market trends, with mail volumes reported in 2016 falling by 3.1% compared to mail volumes reported a year earlier. This overall decline results from lower letter mail and bulk mail volumes, with declines reported for these mail streams outweighing stronger volumes for registered mail and parcel mail. The latter increases in mail volumes are mainly attributable to an ever more buoyant ecommerce activity.
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