DIRECTIVES BY THE MALTA COMMUNICATIONS AUTHORITY

DIRECTIVES BY THE MALTA COMMUNICATIONS AUTHORITY

SUBSIDIARY LEGISLATION 399.23

DIRECTIVES BY THE MALTA COMMUNICATIONS

AUTHORITY

5th June, 2001

LEGAL NOTICES 130 and 192 of 2001, 321 and 365 of 2002, 181 and

303 of 2003, and 60, 61, 297 and 346 of 2004, consolidated and as

amended by Legal Notices 425 of 2007 and 180 of 2012.

The title of this legislation is Directives by the Malta

Communications Authority.

The Directives contained in the Schedule are published by

the Malta Communications Authority for the purposes of article

4(5) of the Electronic Communications (Regulation) Act.

Directive by the Malta Communications Authority

(Legal Notice 130 of 2001)

The Authority takes note of the fact that the shares held by Maltacom p.l.c.

in Vodafone (Malta) Limited have not yet been sold and provides on the matter as

follows

The Authority has considered that

The Electronic Communications (Regulation) Act makes it the duty of the

Authority to exercise the functions assigned to it under the Act in a manner that is

conducive to, amongst other matters, fair competition;

The Authority is empowered by the Act to make directives as may be

required for the carrying into effect of the provisions of the Act;

The various amendments to the Act made by Act No XVIII of 2000 aimed at

introducing a more liberalised and competitive market scenario in the electronic

communications sector which had been until then characterized by monopolies;

The process of transition to such a liberalised scenario was outlined in the

Schedule to the Act entitled the "National Plan for the Reform of the

Telecommunications Sector" (the "Plan");

As part of the said liberalisation process the company Mobisle

Communications Lim ited as a subsidiary of Maltacom p.l.c. was on the 19

September 2000 granted a licence to provide public mobile electronic

communications;

The said licence was granted subject to "The Electronic Communications

(Regulation) Act, all national laws and Regulations; and decisions of the Regulator";

As part of the process of transition from a monopolised market to a

competitive market the Plan envisaged that, given its involvement in the public

mobile electronic communications sector as a direct participant through its

subsidiary Mobisle Communications Limited, the company Maltacom p.l.c. should

no longer retain its shareholding in the company Vodafone (Malta) Limited which as

from the commencement of its services became a competitor of Maltacom p.l.c. in

the mobile electronic communications sector;

For that purpose the Plan stated that "Maltacom will be required to sell its

Vodafone shares within six months from the date its subsidiary first provides mobile

telephony services. This will bring to an end the very important right which

Maltacom enjoys at present to acquire the majority shareholding of the company. It

will also terminate the extensive rights which Maltacom as a minority shareholder

has with regard to Vodafone’s pricing policies and with regard to the running of key

aspects of the company’s business".

It is noted that Maltacom’s right to acquire the majority shareholding in

Vodafone (Malta) Limited was brought to an end by means of an "Instrument of

Modification" of the 29 November 2000 issued in exercise of the powers granted

under article 46 of the Electronic Communications (Regulation) Act and legislated

by means of Legal Notice 248 of 2000 issued on the 5 December 2000.

It is also noted that the company Maltacom p.l.c. has not in practice

exercised its right to interfere in Vodafone (Malta) Limited’s pricing policies and has

not participated in the said company after the date when its subsidiary was granted a

mobile electronic communications licence. The fear that Maltacom would exercise

its rights and influence in Vodafone (Malta) Limited in an anti-competitive manner

has not therefore substantially materialised and Vodafone (Malta) Limited has in fact

adjusted its pricing policies according to market strategies of its own ever since the

commencement of operations of Mobisle Communications Limited;

The Authority therefore considers that the aims of the Plan have been

substantially achieved but that the divestiture of Maltacom’s shares in Vodafone

(Malta) Limited is still required for the purpose of completing the process envisaged

by the Plan in the interests of strengthening of fair competition;

The Authority also notes that Maltacom p.l.c. and Vodafone Europe Limited

have over the past months discussed the manner in which to organise Maltacom's

exit from Vodafone (Malta) Limited. The Authority is however concerned by the fact

that although the Articles of Association of the company Vodafone (Malta) Limited

provide for the sale of shares if both shareholders to-operate, the parties have not

been able to come to an acceptable arrangement for the sale of the shares despite the

lapse of considerable time and despite the fact that both the licence of Mobisle

Communications Limited and that of Vodafone (Malta) Limited are subject to the

Plan which is part of the Electronic Communications (Regulation) Act.

In the Authority’s judgement this failure to reach an agreement is due to the

lack of to-operation of both parties which are putting their interest in obtaining the

most advantageous price before the genuine interests of fair competition in the

market.

Given that the licence granted to Mobisle Communications Limited as a

subsidiary of Maltacom p.l.c. and the licence granted to Vodafone (Malta) Limited

on the 19 September 2000 are subject to the provisions of the Plan, the Authority

considers that a breach of licence conditions has occurred, particularly in the case of

Mobisle Communications Limited.

The Authority considers that at this stage it would not be proportionate or

appropriate to revoke or suspend the licence granted to Mobisle Communications

Limited particularly since such a step would go against the public interest in having

a competitive market and in protecting the consumer. This view is also substantiated

by the fact that in the Authority’s view the company Vodafone Europe Limited has

also contributed to the failure to meet the deadline by which the Maltacom shares in

Vodafone (Malta) Limited were scheduled to be sold according to the Plan.

In view of the above, the Authority considers it appropriate to order, and

hereby orders, the following specific measures to take effect immediately in terms of

article 11 of the Electronic Communications (Regulation) Act with the aim of

ensuring compliance with the said aim of the Plan and condition of the licence of

Mobisle Communications Limited of seeing through the sale of Maltacom's shares in

Vodafone (Malta) Limited

1. Maltacom p.l.c. shall by not later than seven days from the date of this

order appoint a person acceptable to the Authority as its mandatory

(hereinafter referred to as the "mandatory") to act on its behalf in the

holding and administration of its shareholding in Vodafone (Malta)

Limited.

2. The said mandatory shall be empowered and appointed to act as a

Director of Vodafone (Malta) Limited and to act in the interests of the

said company and of all the shareholders of the same and on an arms

length basis from Maltacom p.l.c.

Maltacom p.l.c. shall indemnify the said mandatory against any

liabilities that may be incurred by him in the bona fide exercise of his

functions as mandatory or by reason of the same.

The mandatory shall not be entitled to sell Maltacom’s shares in

DIRECTIVES BY THE MALTA COMMUNICATIONS AUTHORITY

Vodafone (Malta) Limited but shall be empowered to give his consent as

a Director of Vodafone (Malta) Limited for the purpose of removing any

obstacles to the reduction in the said company’s tariffs for mobile

electronic communications services and for the adoption of market

oriented tariff structures and strategies by the company.

This arrangement shall continue until the end of July 2001 when the

Authority will review the situation and the progress made in the

implementation of the process envisaged by the Plan.

Vodafone (Malta) Limited shall to-operate towards enabling the sale of

the shares of Maltacom p.l.c. in that company and no shareholder or

director in the said company shall seek to take advantage of the

situation in order to seek to dictate the price at which the shares are sold

or in order to seek a forced sale of the shares or to put in motion any

procedure with such a purpose or effect.

Vodafone (Malta) Limited and its Directors and shareholders shall not

interpret the present measure as a "Relevant Event" in terms of Article

31 of the Articles of Association of that company.

This directive is being issued on the 4th June 2001 and shall have immediate

Joseph V.Tabone

Chairman

Malta Communications Authority

Directive by the Malta Communications Authority

(Legal Notice 192 of 2001)

The Authority, further to its directive of the 4th June, 2001 published by

means of Legal Notice 130 of 2001, and after having reviewed the situation and the

progress made with regard to the issue of the divestiture of the shares held by the

company Maltacom p.l.c. in the company Vodafone Malta Limited, hereby directs

that notwithstanding the provisions of paragraph 5 in the list of specific measures

ordered by the Authority in the said directive of the 4th June, 2001, the arrangement

stipulated in that directive shall remain in force until modified or revoked by another

directive of the Authority.

Joseph V.Tabone

Chairman

Malta Communications Authority

Directive by the Malta Communications Authority

(Legal Notice 321 of 2002)

Vodafone Malta Ltd submitted two separate letters to the Authority alleging

c r o s s - s u b s i d i s a t i o n b y M al t a c o m p l c i n f av o u r o f i t s s u b s i d i a r y Mo b i s l e

Communications Ltd in the form of cross-promotion alleging this to be in breach of

article 19 of the Electronic Communications (Regulation) Act and of regulation 9 of

the Electronic Communications Services (General) Regulations. Vodafone Malta Ltd

referred the matter to the Authority in terms of articles 19 and 27 of the Electronic

Communications (Regulation) Act, asking the Authority to investigate. In its letters

Vodafone Malta Ltd referred also to Maltacom plc's Shareholders' Loyalty Scheme

and Key Loyalty Scheme, and to various instances of advertising material and

campaigns that Vodafone Malta Ltd alleged to be instances of cross-promotion and/

or cross-subsidisation.

The Authority issued a preliminary decision dated 17th April, 2002 that was

communicated to Maltacom plc, Vodafone Malta Ltd and Mobisle Communications

Ltd. Subsequently Maltacom plc, Vodafone Malta Ltd and Mobisle Communications

Ltd made other submissions to the Authority.

The Authority having considered all the documentation presented and

submissions made and the advice of the Office of Fair Trading, determines as

follows

Cross-promotion as a result of advertising campaigns

In the course of the investigations conducted, the Authority established as a

matter of fact that there is the desired level of operational independence between

Maltacom plc and Mobisle Communications Ltd and that a proper system of infra-

g r o u p ac co u n tin g was b e in g ap p l ied co n si st en tl y t he r eb y av o i d in g cr o s s -

s ub sid isatio n p r acti ces no t allo wed u n der the E lectr on ic C om m un ication s

(Regulation) Act. In reaching this conclusion the Authority established the

following

(a) Maltacom plc and Mobisle Communications Ltd have undertaken

independent advertising campaigns as well as joint marketing

initiatives;

(b) Inter-company transactions between Maltacom plc and Mobisle

Communications Ltd are being correctly disclosed and reconciled; and

(c) Both Maltacom plc and Mobisle Communications Ltd have their own

separately operating marketing departments and both engaged two

independent and separate advertising agencies for their marketing and

promotional activities and interactions between Maltacom plc and

Mobisle Communications Ltd relating to promotional activities are

carried out by the respective advertising agencies.

Key Loyalty Scheme and Shareholders’ Loyalty Scheme

The Authority established that Mobisle Communications Ltd entered into

standard third party agreements with Maltacom plc in respect of its participation in

Maltacom's Key Loyalty Scheme and Shareholders’ Loyalty Scheme respectively.

The Authority established that in relation to the electronic communications sector,

the only participants in these two schemes are Maltacom plc's subsidiaries.

In relation to the Key Loyalty Scheme the Authority considers this state of

a ff a ir s as c o n t r a r y to t h e p r in ci p l e s o f c o m p et i t i o n l aw i n t h e e l ec t r o n ic

communications sector, particularly regulation 9 of the Electronic Communications

Services (General) Regulations, in that the said scheme provides for a system

whereby points earned on the usage of fixed telephony services provided by

Maltacom plc which currently has a monopoly for such services, can be redeemed

from participants in the scheme which include Maltacom plc’s subsidiaries, but

which at present does not include other authorised providers in the electronic

communications sector. The Authority therefore considers that the participation in

this scheme should also be open to other authorised providers who ar e not

subsidiaries of Maltacom plc.

In relation to the Shareholders’ Loyalty Scheme, the Authority considers

that this scheme does not violate the Electronic Communications (Regulation) Act or

the Electronic Communications Services (General) Regulations, once eligibility for

the scheme is based solely on the criteria of being a shareholder in Maltacom plc.

The Authority considers that it is only fair and reasonable for a shareholder in

Maltacom plc to have an interest in the successful operations of Maltacom plc and of

its subsidiaries and to enjoy the benefits of his participation.

Therefore pursuant to the Electronic Communications (Regulation) Act and

the Electronic Communications Services (General) Regulations the Authority is

making the following Directive

1. That Maltacom plc shall ensure that the Key Loyalty Scheme is not, in

relation to the electronic communications sector, exclusively limited to

Maltacom plc’s subsidiaries. Any authorised provider who is not a

subsidiary of Maltacom plc who requests to participate in such a

scheme, shall be offered the same terms and conditions as other

authorised providers in the electronic communications sector already

participating in the scheme, and shall not be subject to any greater or

lesser rights or obligations.

2. That in the case of Mobisle Communications Ltd, in relation to

electronic communications services which are regulated by or under the

Electronic Communications (Regulation) Act, no additional discounts

in the form of redeemed points as indicated in the Key Loyalty Scheme

brochure, shall be granted to its subscribers over and above those

approved by the Authority.

3. This Directive shall come into force on the date of its publication in the

Gazette.

Joseph V.Tabone

Chairman

Malta Communications Authority

Directive by the Malta Communications Authority

(Legal Notice 365 of 2002, as amended by L.N. 180 of 2012)

Sub-regulation (6) of regulation 33 of the Electronic Communications

Services (General) Regulations, 2000 requires an operator to make available a basic

level of itemised billing at no extra charge for the subscriber. Such basic level of

itemised billing must show a sufficient level of detail to allow verification of the

charges incurred by the subscriber.

The Authority, in its letter dated 10th March 2002 communicated to

Maltacom plc, gave its final decision as to the basic level of itemised billing required

so that a subscriber can verify the charges incurred. In this decision the Authority

established that the basic level of detail required on call charges that has to be

provided for this purpose is the

•

Destination telephone number,

•

Date of call (in DD/MM/YY or DD/MM format),

•

Time of call (in HH:MM:SS format),

•

Duration of call (in HH:MM:SS format), and

•

Charge (in € 00.00 format)

for each individual call made, for those calls on which a charge is levied during the

relevant billing period. The Authority determined that billing information below this

level does not effectively enable subscribers to verify the charges incurred.

The Authority held that such level of detail is to be provided on an opt-in

basis at no extra charge to subscribers and that subscribers are to be made aware of

their right to receive itemised bills with the level of detail as established in the

decision of the Authority.

Subsequent to the Authority’s final decision, Maltacom plc initiated

proceedings contesting this decision.

Sub-article (6) of article 35 of the Electronic Communications (Regulation)

Act states that a decision of the Authority which has been appealed shall not, except

where the Administrative Review Tribunal established by article 5 of the Administrative

Justice Act or the Court of Appeal, as the case may be, so orders, be suspended in

consequence of the bringing of an appeal.

Therefore, pursuant to the Electronic Communications (Regulation) Act and

the Electronic Communications Services (General) Regulations, the Authority is

making the following Directive

1. that Maltacom plc shall forthwith comply with the final decision of the

Authority as communicated to Maltacom plc;

2. without prejudice to paragraph 1, that Maltacom plc shall where the

subscriber decides to opt-in for the level of detail as determined in the

final decision of the Authority, furnish at no extra charge to that

subscriber, itemised bills having such level of detail, commencing with

the bill issued subsequent to the request of the subscriber until such date

as the subscriber otherwise requires;

3. this Directive shall come into force on the date of its publication in the

Gazette.

Joseph V.Tabone

Chairman

Malta Communications Authority

Directive by the Malta Communications Authority

(Legal Notice 181 of 2003)

The Malta Communications Authority, in exercise of the powers conferred

by regulation 3 of the Electronic Communications (Leased Lines) Regulations, 2003,

and after having established that Maltacom p.l.c. has a dominant market position in

the relevant leased lines market, hereby requires Maltacom p.l.c. to provide to any

p oint in Malta the min im um set of leased lin es with harm on ised tech nical

characteristics as specified in the First Schedule to the said regulations.

Joseph V.Tabone

Chairman

Malta Communications Authority

Directive by the Malta Communications Authority

(Legal Notice 303 of 2003)

Keyworld Ltd requested the intervention of the Authority in accordance with

articles 27, 28 and 29 of the Electronic Communications (Regulation) Act, alleging

that Maltacom plc had disabled access from public payphones to numbers starting

with the four digits 2188 and that consequently subscribers to the OneVoice service

operated by Keyworld Ltd were unable to connect to the access number 21884773

from any Maltacom plc payphone.

Subsequent to this communication both Maltacom plc and Keyworld Ltd.

made written submissions to the Authority.

The Authority after having also considered all the submissions made and the

documentation presented by all the parties, determines as follows

The numbering allocation and management is the responsibility of the

Authority, and Maltacom plc does not have the right to disable access to such

numbers from its public payphones. Reference in this context is made to regulation

17 of Legal Notice 151 of 2000 which requires operators to conform to any direction

that the Authority gives concerning the national numbering plan.

The Authority considers that the determination of the issues in question

hinges primarily on the disabling of access to a set of numbers for which there is no

justifiable cause at law. The Authority administers the numbering plan and has never

required any operator to block access to sections of this plan. Moreover there should

not be any differences between the numbers accessible from a residential or business

phone line and a public payphone as this would constitute a discriminatory practice.

The Authority in line with its functions including those under article 4 of

Cap. 399 considers that there is no valid reason or justification at law why Maltacom

plc should unilaterally disable access to the 2186 and 2188 numbering ranges and

that Maltacom's actions are contrary to the Electronic Communications (Regulation)

Act including articles 18(a) (b) and (f), and 29 thereof. The Authority considers the

disabling of access by Maltacom plc to be a practice that is unreasonable and runs

counter to the obligation of Maltacom plc to make available electronic

communications services it provides accessible.

The Authority considers that Maltacom plc’s actions contravene regulation

9(2) of the Electronic Communications Services (General) Regulations, in particular

paragraph (l) thereof, and that such actions have the effect of preventing, restricting

and distorting competition to the advantage of Maltacom plc and/or its subsidiaries

and this in breach also of the general principles of competition law.

Therefore pursuant to the Electronic Communications (Regulation) Act, the

Electronic Communications Services (General) Regulations and the Internet and

Other Data Networks (Service Providers) Regulations is making the following

Directive

1. That Maltacom plc shall not without, prior written authorisation from

the Authority, disable access from any numbers to any numbers within

numbering ranges allocated to it in accordance with the national

numbering plan and to the extent that it is currently acting in violation

of this directive forthwith desist from doing so;

2. That any advertisements placed in promoting packet switched voice

services must clearly indicate the type of service beings offered and

cannot be marketed as telephony;

3. That access to any internet access service, however so described, must

be made only by using 2188XXXX or 2186XXXX or as otherwise

stipulated by the Authority;

4. That articles 1 and 2 of this Directive shall come into force on the date

of publication of this Directive in the Gazette, whereas article 3 of this

Directive shall come into force on the 2nd February, 2004.

Joseph V.Tabone

Chairman

Malta Communications Authority

Further Provision to the Directive by the Malta Communications Authority

published on the 3rd December, 2002 by means of Legal Notice 365 of 2002

(Legal Notice 60 of 2004)

Further to its Directive of the 3rd December, 2002 published by means of

Legal Notice 365 of 2002, the Malta Communications Authority, after having

reviewed the present situation, the proposals made by Maltacom plc, the impact on

users and the progress registered, hereby provides that further to the current

provision in operative paragraph 1 of the original Directive, Maltacom plc shall

henceforth and commencing with the billing periods starting from the 1st December,

2003, be required to comply with the final decision of the Authority as amended and

communicated to Maltacom plc.

Joseph V.Tabone

Chairman

Malta Communications Authority

Further Provision to the Directive by the Malta Communications Authority

published on the 14th October, 2003 by means of Legal Notice 303 of 2003

(Legal Notice 61 of 2004)

Further to its Directive of the 14th October 2003 published by means of

Legal Notice 303 of 2003, the Malta Communications Authority, after having

reviewed the present situation, the impact on various operators and users, hereby

further provides that reference in paragraph 4 of the original Directive to the 2nd

February, 2004 as the date of the coming into force of article 3 of the original

Directive has now been extended to the 1st April 2004.

Joseph V.Tabone

Chairman

Malta Communications Authority

Further Provision (Number 2 of 2004) to the Directive

by the Malta Communications Authority published on the 14th October, 2003

by means of Legal Notice 303 of 2003

(Legal Notice 297 of 2004)

Further to article 3 of its Directive of the 14th October 2003 published by

means of Legal Notice 303 of 2003, the Malta Communications Authority, whereby

the Authority stated that access to any internet access service, however so described,

must be made only by using 2188XXXX or 2186XXXX or as otherwise stipulated by

the Authority, the Authority hereby stipulates that access to any internet access

service however so described may also be made through freephone numbers as

allocated in the National Numbering Plan.

In doing so the Authority considers that Internet Service Providers may wish

to utilise a payment scheme that involves freephone calls for access to their services.

Under such a scheme the user may access the service without incurring the call

charge. The Authority further considers that it is important for the person making the

call to know that a freephone number is being accessed, therefore necessitating the

use of an "80X" prefix to identify the use of a freephone service.

Joseph V.Tabone

Chairman

Malta Communications Authority

Directive by the Malta Communications Authority

(Legal Notice 346 of 2004)

In May, 2003 the Authority published a decision entitled "Interconnection in

the Maltese Telecommunications Sector - Report on Consultation and Decision". The

main purpose of this decision was to regulate the reference interconnection offers

published by dominant operators in the electronic communications sector.

In accordance with the Decision, Vodafone Malta Limited was specifically

required with effect as from the 1st July, 2003 to implement the interconnection rates

charged to other interconnecting operators as follows

•

National termination

16 cents per minute,

•

International gateway to mobile

16 cents per minute

Subsequently, the coming into force of the interconnection rates was

extended from the 1st July, 2003 to the 1st October, 2003.

Following written communications between the Authority and Vodafone

Malta Limited, whereby Vodafone Malta Limited was required to comply with the

aforesaid decision, Vodafone Malta Limited in its letter dated 1st June, 2004 wrote to

the Authority informing the said Authority that it felt aggrieved by the application of

rates and it could not comply with the aforesaid decision.

The Authority has considered all the relevant documentation and

representations made, including that Vodafone Malta Limited did not contest the

aforesaid decision within the appropriate timeframes established at law and that no

reasons justifiable at law were submitted contesting the aforesaid decision within the

prescribed timeframes at law.

Therefore, pursuant to the Electronic Communications (Regulation) Act and

the provisions of the Electronic Communications Services (General) Regulations,

and in particular the failure by Vodafone Malta Limited to comply with the Decision

in its entirety, the Authority is making the following Directive, namely that

1. Vodafone Malta Limited shall forthwith comply with the aforesaid

Decision of the Authority, in particular that Vodafone Malta Limited

shall implement the interconnection

rates

charged

to

other

interconnecting operators as follows

• National termination

16 cents per minute,

• International gateway to mobile

16 cents per minute

and this back dated to the 1st October, 2003, in compliance with the

Decision as amended;

2. This Directive shall come into force on the date of its publication in the

Gazette.

Joseph V.Tabone

Chairman

Malta Communications Authority