Issue link: https://maltatoday.uberflip.com/i/1505128
Think about it for a second. Before the 1990s, the only costs involved in owning a tele- phone, were: a) the cost of the phone itself; b) an annual fee, paid to Tele- malta, for the line; c) a flat rate for domestic/ overseas calls, which – while I don't actually remember the amounts, all these years later – used to be measured in 'cents and mils' (for those who still remember the archaic Maltese lira, in action). Today, on the other hand? Leaving aside that the average cost of a mobile phone hov- ers somewhere around the €700 mark – and the phones themselves are designed with 'inbuilt-obsolescence': which means you have to buy yourself a new one, every time the man- ufacturer comes up with a new IOS version (in other words: every other year) – there is now a MONTHLY subscription, payable to a (limited choice of) service providers, who all seem to somehow charge exactly the same rates. And this last detail is hardly surprising, because – as can easily be proven by pointing to- wards other 'liberalised' sectors (like gas, for instance: in which case, consumers now have the 'choice' of buying gas cylinders from different providers... AL- WAYS AT THE SAME PRICE!) – 'liberalisation' does not auto- matically translate into 'more competition'; and, even less, into 'lower prices'. On the contrary: when any segment of a market as small as Malta is 'liberalised' – with very few exceptions (such as taxis, for instance: which would have made a much better example, in support of Grech's argu- ment) – the result is almost in- variably the creation of a 'car- tel': in which prices are simply dictated by the same four or five companies that always somehow get to control those sectors between them, anyway. In any case, however: add up all those extra costs, today... and you'd probably find that it is around 10 times MORE ex- pensive - not LESS – to make a phonecall, than it ever used to be in the past. And while I aware that not all these extra expenses are the direct result of 'market liberal- isation'... a) some of them certainly are. (The monthly subscrip- tion, for instance, represents a tenfold+ increase in cost, over the previous 'annual' one... and it was introduced, as part of a 'private-sector model' that is geared only towards generating profits); b) They still represent exam- ples where liberalisation clear- ly FAILED to have the desired effect of 'lowering prices'... and actually 'raised' them, instead! So exactly how Bernard Grech can so egregiously claim that 'liberalisation will not result in price increases' – when we all know, from our experience, that it HAS had that effect, in other areas – is... well, anyone's guess, I suppose. And please note that we still haven't even got to Mark An- thony Sammut's other (more 'economist-like') argument, yet... although, in a sense, we already have. Even from the examples al- ready mentioned, it should be painstakingly clear that... No, actually. Liberalisation doesn't always lead to 'more choice' – or at least: not to any 'RE- AL' choice – and it certainly doesn't always lead to lower prices, either. And oh look: liberalisation of the energy sector, in particular, has somehow managed to have the OPPOSITE effect, practi- cally everywhere else in the Eu- ropean Union (that is to say: all other 26 member states - 27, if you also include pre-Brexit UK - which, unlike Malta, liberal- ised their own energy sectors years, if not decades ago.) Almost makes you wonder, doesn't it? Did either Bernard Grech, or Mark-Anthony Sam- mut (or anyone else in the PN) ever actually look at the conse- quences of that ill-fated liberal- isation process, in any of those countries? I guess not. Because if they did, they would surely have no- ticed a rather regular pattern, that unfolded in almost every single one of them. This is how the effect was described, in Volume 48 of the online jour- nal 'ScienceDirect' (December 2011): "Electricity liberalized mar- kets should lead to reduce electricity prices. [...] However, HOUSEHOLD ELECTRICITY PRICES ARE INCREASING IN THE EUROPEAN UNION. [My emphasis]. We find that the deployment of RES [Re- newable Energy] INCREAS- ES PRICES PAID BY CON- SUMERS IN A LIBERALIZED MARKET [Ditto]." So, um... is Bernard Grech still so very certain, that his plan to liberalise the Maltese energy network, will not simi- larly backfire in future? If so: I'd sure love to hear his reasons why, myself... OPINION 11 When any segment of a market as small as Malta is 'liberalised'... the result is almost invariably the creation of a 'cartel': in which prices are simply dictated by the same four or five companies that always somehow get to control those sectors between them, anyway maltatoday | SUNDAY • 6 AUGUST 2023