THE GOVERNMENT will decide next week whether to allow the semi-government Electricity Authority of Cyprus (EAC) to compete in the telecommunications bidding war following a rift between two cabinet ministers at Wednesday’s session over the issue.
Yesterday the two Ministers, Communications and Works Minister Averoff Neophytou and Commerce, Industry and Tourism Minister Nicos Rolandis, who supports the EAC bid, defended their opposing views.
Neophytou said the EAC should not participate in the process of liberalising the mobile phone market because it is a semi-government organisation. He said this would not constitute liberalising the market should the licence end up being granted to the EAC: it would result in the further nationalisation of the sector, since one semi-government organisation (CyTA) already holds the monopoly on telecommunications.
“I don’t see this as a positive development,” Neophytou said, adding that he thought the EU would not view it favourably either.
“There is a political difference of opinion towards semi-government organisations becoming involved in everything and prolonging state participation,” he said. “Another school of thought believes that state-owned enterprises are anachronistic and should be free to compete on the market.”
Rolandis, however, said that the EAC should be allowed to bid for a licence because it has the necessary infrastructure to do so. He said it would be unfair for the EAC to have to face liberalisation of its own sector without having the opportunity to diversify and expand into other areas to offset competition in the electricity sector.
“We shouldn’t close the window of competition for the EAC,’ he said. “On the one hand say why it should be fair to let competition into the electricity market but on the hand close the doors of competition to the EAC.”
The government has received 20 replies from local and international telecoms giants in response to its invitation earlier this year to submit expressions of interest in the island’s deregulation of the telecommunications sector.
Those said to have submitted responses to the public consultation paper issued by the government include Vodafone, Telestet and Greece’s CosmOTE, which are interested in GSM licences. The list also includes other companies from the YS, France, Germany, the UK, Scandinavia and Russia.
Cypriot telecoms monopoly CyTA and the EAC also submitted expressions of interest. After the responses have been examined in detail a decision will be made on how to proceed.
The 28-page consultation paper sought the advice of interested parties, domestic and international, on the technical, commercial, economic and regulatory issues associated with licensing additional providers to compete with CyTA.
The government plans later this year to offer UMTS — Universal Mobile Telecommunications System, a member of the IMT-2000 global family of ‘third generation’ mobile communications systems. UMTS will play a key role in creating the future mass market for high-quality wireless multimedia communications that will have two billion users worldwide by the year 2010.
Third generation devices, in addition to conventional voice, data and fax services, will allow multimedia services, mobile office, virtual banking and Internet access.
The EU’s Licensing Directive provides that there should be no limitations on the number of licences granted, but the public consultation document said there could be exceptions to this rule, one of which applies to wireless systems where there may be a physical limitation within a frequency band.
The government is keen to issue licences for up to 15 years with a high expectation of renewal and public consultation being held two years before the licensing term ends.
Competition for the licensing of additional providers is expected to begin in October.
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.
