LEBANESE-backed mobile phone company Scancom, the winners of the island’s first GSM licence to rival CyTA, said yesterday they did not want to get into a price war with incumbent Telecommunications Authority.
Speaking to the Cyprus Mail yesterday, Scancom’s adviser Koullis Christodoulides said he was confident CyTA would not further reduce their rates.
“Our rates will be very competitive, but a price war is not necessarily the correct approach,” he said.
“CyTA is now the dominant operator, as declared by the regulator and they have to justify their rates. So I would not be surprised if CyTA doesn’t decrease their rates.”
Christodoulides said CyTA’s rates were based on the fact that they didn’t have to pay a licence, and that with the intervention of the regulator, they would have to go back to realistic prices.
“To give you an example, CyTA will now have to pay exactly the same amount for the licence as Scancom and their costs will be higher,” he said. Scancom paid £12.7 million for its licence in an auction that ended on Thursday. It plans to go into operation by May.
“But I still believe that CyTA’s rates were not cost-based, they lowered the rates in order to frighten off the competition and I expect that soon with the intervention of the regulator they will go back to realistic rates,” Christodoulides added.
“We are going to have a clean competition according to the rules of equal treatment.”
Christodoulides said the new company would offer the consumer the opportunity to choose from a variety of products.
“First of all there will be competition and that leads to consumer benefits,” he said.
“The consumer will have a choice among carriers but also choice among products. Scancom will enter the market with a variety of services, which will enable the consumer, now a CyTA user, to choose other products.
“Yesterday, the chairman of the company said he was committed to introduce not only GSM but also 2.5G – the introduction 3G – which is the new generation of mobile telephony with fast data transfers.”
Christodoulides said the company would install a multi-million dollar network and that there would be many job openings.
“We will install our network in the future, according to the requirements of the specifications,” he said.
“But in the beginning we will be using the CyTA network and the so-called national roaming provision; in other words, our customers will be using the CyTA network until our network Rollout will be very fast.
“From our experience, it takes usually nine months to one year to complete the initial phase of the network, but a part of our network will be operational within the next few months.
“By the time we go into operation, parts of the network will already be installed at a cost of millions of dollars.”
