TELEPASSPORT Telecommunications, the island’s first private fixed telephony operator, yesterday pledged call rates of at least 15 per cent less than former monopoly provider CyTA.
The President of TelePassport, former Defense Minister Socratis Hasikos, said the company was working in close proximity with Greece, where TelePassport first began in 1998.
“TelePassport first opened in Cyprus one and a half years ago and since then we have been building towards offering customers the lowest rates possible. On January 19, the Telecommunications Regulator granted us permission to lower the national and international call costs by a minimum of 15 per cent,” said Hasikos.
“We are offering our customers cheaper rates than CyTA by a minimum of 15 per cent. We would like to offer 20 to 25 per cent cheaper call costs, but are unable to do so,” said Hasikos.
Hasikos said this was due to CyTA’s failure to present its cost of orientation to the Telecommunications Regulator, which delaying their application process to lower their call costs for customers.
“Statistics show that in 1998 CyTA made a profit of £50 million which increased to £62 million in 1999 and in 2001 reached £91 million. According to CyTA they expected to reap a profit of £107 million from the period 1998-2002, yet they earned a profit of £218 million,” Hasikos said.
“How can this be possible if they are not over charging their customers? They could get away with it because they were the monopoly in Cyprus. Now, they must present their costs and expenses to the Telecommunications Regulator, who has given them 15 days to do so,” said Hasikos.
Hasikos believes CyTA has delayed presenting its expenses for one of two reasons. “Either they have been paying out too much money and need to earn it back by charging more or they have simply been ripping off customers,” said Hasikos.
The President of TelePassport in Greece, Evangelos Savouris, said they had been the fastest developing of another 600 companies in Greece in 2002. “We have 34 shops and 1.5 million users and hope to become as successful in Cyprus,” said Savouris.
TelePassport aims to establish its services in at least seven EU countries.
Savouris said the average cost of telecommunications in homes and businesses accounted for seven per cent of their expenses and it was therefore important to offer customers the lowest possible call prices.
“How is it that CyTA can make a profit of over 100 per cent when in other countries where there is also a monopoly no company makes a profit of more than 40 per cent. CyTA must explain their position,” said Savouris. “It is ridiculous that a government controlled company can profit to that degree and at the customers’ expense.”
Hasikos stressed that Cyprus’ accession to Europe would open the door to healthy competition for monopoly providers such as CyTA and the Electricity Authority.
“Our aim is not to attack CyTA, but to offer customers a better service at cheaper rates. Competition need not be negative, but could push CyTA into also lowering their prices,” said Hasikos.
Savouris revealed that in Europe 35 per cent of customers strayed away from former monopoly companies, preferring smaller establishments with competitive offers.
As to CyTA’s claim that it is the cheapest telecommunications service in Europe, Hasikos said: “If that was true, it no longer applies, as we are now the cheapest call service in Europe. If they lower their call costs, we will lower ours further, as we do not have the same expenses as CyTA,” said Hasikos.
The company says it is not advertising the maximum reduction in call costs – which reaches up to 60 per cent – because it believes in focusing on the minimum, which will apply to most customers.
“Any phone company can advertise their highest reduction in price and say calls are cheaper by up to 99 per cent. But they neglect to inform the customer that the only calls reduced by that much are to Guatemala, for example. They do this, as they know few people are likely to call Guatemala,” said Savouris.
“Another tactic most phone companies take is to lower the price of national calls to one cent per minute. However, customers then speak for longer and therefore the company still makes the same amount of money,” said Savouris.
TelePassport is still using the CyTA network but by June hopes to obtain its own network and offer users more services, such as Internet and mobile phone cards.
“We will even be able to offer customers their own landline number. Our aim is to benefit customers and we are here to stay,” said Hasikos.
CyTA spokesman Paris Menelaou yesterday told the Cyprus Mail that the Telecommunications Regulator had asked them for their cost orientation within the next 15 days.
“We will be giving the Regulator our orientation cost within the next few days and afterwards we will be implementing our lower prices on international calls as of February 1,” said Menelaou.
“If other companies open in Cyprus it is not known whether or not they will offer lower prices than us; therefore we are unable to say whether we will further lower our rates. We do believe our prices are very low,” he added.
