THE auction for Cyprus’ first private sector mobile phone licence is set to resume today with bids at £9.75 million for the 20-year concession, well above the minimum sought by regulators.
Cosmote Cyprus, an affiliate of the major Greek mobile telecom operator Cosmote, and Scancom, a consortium of Lebanese and Cypriot investors active in Africa, had reached an eighth round of bidding by 5pm. Both launched their first bids at £5.7 million, the minimum price sought by the regulators.
“We have just completed the eighth round and we will resume on Thursday,” Telecoms Regulator Vassos Pyrgos told Reuters. “It went very smoothly.”
The rate of bidding was higher than some industry analysts expected who had put the cost of the licence in the range of seven to eight million pounds.
Bidding is expected to resume at 10am today.
Cyprus needs to deregulate its telecoms market before it joins the European Union in May. Past delays in opening up the sector to competition had drawn rebukes from Brussels.
Regulators set an increment of up to 10 per cent in each round of the auction, held under tight security at the Nicosia Hilton Park hotel, with delegations from the two parties kept apart.
Bidding will continue until one of the two bows out.
“If neither party accept the increment then authorities go back to the previous round and the winner is picked from the draw of each round,” Pyrgos said.
The newcomer will compete for market share with CyTA, the government-controlled incumbent which has a monopoly on mobile and fixed-line services.
“I don’t think you can actually say what is fair value for a licence,” said a telecoms industry source, asked to put a price tag to the licence.
“Essentially this is a relatively big market of wealthy people with money to spend on phone calls.”
An estimated 65 per cent of 750,000 Greek Cypriots subscribe to CyTA’s GSM service, but the sector also generates revenue from roaming traffic of the 2.5 million tourists who visit Cyprus each year.
CyTA, which introduced GSM standard in 1995, will be compelled to pay for a licence a sum equal to what the newcomer will pay in the auction.
Cosmote Cyprus is made up of Cosmote Greece, Greek electronic retailer Germanos and the Cypriot Shakolas Group.
Local newspapers have linked Scancom with business interests related to Lebanese Prime Minister Rafik al-Hariri. (R)
