THE BATTLE for control of the mobile phone market in Cyprus rages on, as telecom giant CyTA yesterday underlined its refusal to comply with an interim order to raise prices.
The feud began when emerging mobile competitor Areeba filed a complaint with the Competition Commission that Cytamobile-Vodafone was abusing its dominant position in the marketplace. Areeba protested that CyTA was squeezing prices by lowering mobile call rates to match those of Areeba, making it near impossible to break CyTA’s monopoly.
The Competition Commission found in a preliminary decision that CyTA was deterring healthy competition and ordered the semi-government organisation to bring mobile rates to pre-April levels at six cents a minute for mobile to mobile and five cents a minute for mobile to land line until the case can be examined in full.
CyTA flouted the decision, obtaining a court ruling annulling the interim order.
Last Friday, the Supreme Court overturned the ruling, after judging that the Competition Commission was well within its rights in making the interim order.
However, CyTA Chairman Stavros Kremos said yesterday the organisation had no intention of complying with the interim order before the Competition Commission ruled on the charge of abuse of power.
He clarified this did not put CyTA in violation of any court order. “There is a misunderstanding that the court ordered us to raise prices. The court simply ruled on whether the Commission had a right to give an interim order before examining the charge of abuse of power.
“The board decided two weeks ago that we are not abusing our position. We will not bring mobile phone rates to pre-April levels.”
Asked whether this was in violation of the Competition Commission’s order, he replied: “We are not violating any court order, this is clear.”
On the charges, Kremos said: “In substance, we are very confident that we are not violating any laws and have evidence to prove it. The trend of reducing prices is universal, it’s not only a Cypriot phenomenon,” he added.
CyTA bases its argument on two facts. The Telecommunications Regulator previously ruled that CyTA was charging above cost price and therefore did not need regulating.
However, one telecom analyst noted that price regulation and the criteria for healthy competition were two separate issues. A regulator looks at prices, the Competition Commission has to check other factors like size of the market share and advertising to decide whether there is fair competition, especially for a newly opened market like Cyprus with its national monopoly on telecommunications.
The second argument is that Cyprus has a population of less than one million, like Malta and Luxembourg, and should not comply with competition obligations made for markets catered for millions of consumers.
“It’s not a bad thing that we have 96 per cent of the market. At the end of the day, consumers can enjoy low prices, a good and high quality product. This is the final purpose,” said Kremos.
“I am for liberalisation, but the incumbent authority needs to provide proper infrastructure for the whole economy. We invested more than £70m in new technologies in new areas. We try to supply remote villages with quick internet access. All this warrants a national player without excluding other competitors,” he added.
The CyTA Chairman went on to say it would take time to introduce competition in Cyprus. “Our biggest ally is competition, we want this because it will make us adjust to changes in the environment. But I am not in favour of rapid changes, it will take time, there will be competition but we must have strong players in the market.”
