S.L. 399.23 Art. 2Publication of Directives. Cap. 399. The in Vodafone follows: The The Authority to conducive to, The required for The introducing The Schedule to As September The (Regulation) As competitive mobile subsidiary no longer from the the mobile For Vodafone telephony Maltacom will also has with regard asp

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)

Authority takes note of the fact that the shares held by Maltacom p.l.c. (Malta) Limited have not yet been sold and provides on the matter as

Authority has considered that:

Electronic Communications (Regulation) Act makes it the duty of the exercise the functions assigned to it under the Act in a manner that is amongst other matters, fair competition; Authority is empowered by the Act to make directives as may be the carrying into effect of the provisions of the Act; various amendments to the Act made by Act No XVIII of 2000 aimed at a more liberalised and competitive market scenario in the electronic communications sector which had been until then characterized by monopolies; process of transition to such a liberalised scenario was outlined in the the Act entitled the "National Plan for the Reform of the Telecommunications Sector" (the "Plan");

part of the said liberalisation process the company Mobisle Communications Limited as a subsidiary of Maltacom p.l.c. was on the 19 2000 granted a licence to provide public mobile electronic communications; said licence was granted subject to "The Electronic Communications Act, all national laws and Regulations; and decisions of the Regulator"; part of the process of transition from a monopolised market to a market the Plan envisaged that, given its involvement in the public electronic communications sector as a direct participant through its Mobisle Communications Limited, the company Maltacom p.l.c. should retain its shareholding in the company Vodafone (Malta) Limited which as commencement of its services became a competitor of Maltacom p.l.c. in electronic communications sector; that purpose the Plan stated that "Maltacom will be required to sell its shares within six months from the date its subsidiary first provides mobile services. This will bring to an end the very important right which enjoys at present to acquire the majority shareholding of the company. It terminate the extensive rights which Maltacom as a minority shareholder to Vodafone’s pricing policies and with regard to the running of key company’s business".

noted that Maltacom’s right to acquire the majority shareholding in (Malta) Limited was brought to an end by means of an "Instrument of of the 29 November 2000 issued in exercise of the powers granted 46 of the Electronic Communications (Regulation) Act and legislated Legal Notice 248 of 2000 issued on the 5 December 2000.

also noted that the company Maltacom p.l.c. has not in practice right to interfere in Vodafone (Malta) Limited’s pricing policies and has participated in the said company after the date when its subsidiary was granted a electronic communications licence. The fear that Maltacom would exercise influence in Vodafone (Malta) Limited in an anti-competitive manner therefore substantially materialised and Vodafone (Malta) Limited has in fact adjusted its pricing policies according to market strategies of its own commencement of operations of Mobisle Communications Limited; The Authority therefore considers that the aims of the Plan substantially achieved but that the divestiture of Maltacom’s shares (Malta) Limited is still required for the purpose of completing the process by the Plan in the interests of strengthening of fair competition; The Authority also notes that Maltacom p.l.c. and Vodafone Europe have over the past months discussed the manner in which to organise exit from Vodafone (Malta) Limited. The Authority is however concerned that although the Articles of Association of the company Vodafone (Malta) provide for the sale of shares if both shareholders to-operate, the parties been able to come to an acceptable arrangement for the sale of the shares lapse of considerable time and despite the fact that both the licence Communications Limited and that of Vodafone (Malta) Limited are Plan which is part of the Electronic Communications (Regulation) Act. In the Authority’s judgement this failure to reach an agreement lack of to-operation of both parties which are putting their interest in most advantageous price before the genuine interests of fair competition market. Given that the licence granted to Mobisle Communications subsidiary of Maltacom p.l.c. and the licence granted to Vodafone (Malta) on the 19 September 2000 are subject to the provisions of the Plan, considers that a breach of licence conditions has occurred, particularly Mobisle Communications Limited. The Authority considers that at this stage it would not be proportionate appropriate to revoke or suspend the licence granted to Mobisle Communications Limited particularly since such a step would go against the public interest a competitive market and in protecting the consumer. This view is also by the fact that in the Authority’s view the company Vodafone Europe also contributed to the failure to meet the deadline by which the Maltacom Vodafone (Malta) Limited were scheduled to be sold according to the

In view of the above, the Authority considers it appropriate hereby orders, the following specific measures to take effect immediately article 11 of the Electronic Communications (Regulation) Act with ensuring compliance with the said aim of the Plan and condition of Mobisle Communications Limited of seeing through the sale of Maltacom's Vodafone (Malta) Limited: