COMPANIES operating 090 numbers are accusing the Cyprus Telecommunications Authority (CyTA) of squeezing them out of the market and plunging them into bankruptcy ahead of the planned market liberalisation in January 2003.
Peoplestel and Golden Telemedia are the only companies out of 30 to have survived the seven-year history of 090 since CyTA opened up opportunities for private firms to operate the service in 1993.
Managers of the two companies attribute the staggering failure rate to CyTA’s bullish behaviour, which has prevented them from making a success of the venture.
The latest incident broke early last September, when CyTA informed Peoplestel and Golden Telemedia that CyTA coffers would net 30 per cent of their income each month, coming into effect immediately.
Although legal pressure has forced CyTA into postponing the arrangement until April 1, Peoplestel and Golden Telemedia insist the battle is not over.
“The bad thing is that we can’t react. This cut is massively going to reduce our turnover and profit, and drive us into bankruptcy. They have the monopoly and they can do whatever they like,” the general manager of Golden Telemedia, Antonis Eniotis, told the Cyprus Mail.
“If 20 per cent of our turnover is gross profit, let’s say, and CyTA comes in and takes another 30 per cent, you can see how serious it is,” he added.
“They decide and everyone has to shut up. They are behaving like Denktash,” said the manager of Peopleset, Eliza Betito.
CyTA justified the new cut on the grounds that 090 services were not profitable for it. European Union regulations prohibit service-subsidisation.
The companies already pay CyTA monthly line rental charges and CyTA takes a cut of every single call charge.
Eniotis said company turnover had been £750,000 in 1999, with £1,800 going to CyTA each month in line rental.
But Peoplestel and Golden Telemedia hold CyTA responsible for allegations of non-profitability, claiming that the semi-governmental organisation has done everything in its power to strangle their business.
Betito says CyTA has allowed a third of households to cut themselves off from dialling 090 numbers, and allowed others to forego paying their bills, just because “they didn’t know how expensive the calls were”.
“We need their approval for each project, but that slows us down where speed is vital,” said Betito.
She criticises CyTA for refusing to okay chat lines, such as the ones that operate all over Europe, on moralistic grounds – an attitude she finds hypocritical given the vast array of sex sites available on the Internet on call time paid to CyTA.
She claims giving CyTA an even bigger cut is absurd, arguing that though CyTA may service the telephone lines and collect payments, they do that for all customers anyway.
“We pay them hundreds of pounds and they do nothing. They seem to think we’re making millions, but it’s so hard to make money. In a population of half a million people, a third have been cut off, and another third hate 090. That leaves a very limited market,” she said.
She says preferential advertising rates at Sigma and Antenna keep Peoplestel and Golden Telemedia afloat – privileges not extended to their rivals who went bankrupt.
It remains to be seen how the companies will be affected when the new arrangements come into effect in the spring, but they see liberalisation as their only hope.
Their fear is that if they go under before then, foreign companies will take over the market in 2003.
“We survive with the vision of liberalisation in Cyprus, on the grounds that that will make things better for the private sector. It’s a matter of strategy,” said Eniotis.
A spokeswoman for CyTA, Rita Karadjian yesterday told the Cyprus Mail that the chairman and management team were handling the matter. She was unable to make any further comment.
The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.
