Cabinet to rule on EAC bid for telecoms licence

THE CABINET will decide today whether the Electricity Authority of Cyprus (EAC) will be allowed to compete when the telecommunications market is liberalised later this year.

Last week’s cabinet meeting on the issue ended acrimoniously when Commerce Minster Nicos Rolandis and Communications and Works Minister Averoff Neophytou clashed over whether the EAC should be allowed into the bidding war for new mobile providers.

Neophytou says the EAC should not participate because it is a semi-government organisation. He said this would not constitute a liberalising of the market but further nationalisation of the sector, since one semi-government organisation (CyTA) already holds the monopoly on telecommunications.

Rolandis says that the EAC should be allowed to bid because it has the necessary infrastructure to do so. He said it would be unfair for the EAC to have to face the liberalisation of its own sector without having the opportunity to diversify and expand into other areas to offset competition in the electricity sector.

Yesterday the two ministers continued their spat at the House Commerce Committee where the issue was being discussed. Rolandis said that the EAC had been granted a licence by parliament 14 months ago allowing it to expand into other areas. “They have a written licence based on legislation,” he said.

Neophytou said the issue was not a simple one and that it involved all sorts of complications related to the EU chapter on competition. “One of the most important parameters is how far a semi-government organisation can contribute to the restriction of competition,” he said, adding that if the EAC was allowed to compete there was nothing that would prevent CyTA from applying for a second licence.

Committee chairman Lefteris Christoforou said they did not want to become embroiled in the row. He said the main aim of deputies was obtain high-quality service and lower prices for the consumer.

Those said to have submitted responses to a public consultation paper issued by the government in April include Vodafone, Telestet and Greece’s CosmOTE, which are interested in GSM licences. The list also includes other companies from the US, France, Germany, the UK, Scandinavia and Russia. The government expects to announce what it will require in tender applications and how many licences it will issue by October.