A FRENZY of activity erupted yesterday with all the big players in the telecom business scrambling to block or push through a controversial deal between the Cyprus Telecommunications Authority (CyTA) and subscriber channel LTV.
The preliminary agreement provides that LTV and Alfa will remain on Multichoice’s satellite platform until 2010, while at the same time LTV and Alfa will supply miVision – managed by CyTA – with entertainment content.
But it has drawn fire from private telecom operators and over-the-air television networks, who charge that the joining of forces between the two organisations will lead to a super monopoly in the market, killing competition once and for all.
Established in 1993, LTV boasts over 60,000 subscribers, of whom 15,000 have upgraded to the NOVA digital platform. It has an estimated 30 per cent market penetration of all households in Cyprus.
For its part, CyTA currently controls 97 per cent of the fixed telephony market, 93 per cent of the mobile telephony, 94 per cent of the internet market and has 100 per cent control of the broadband service market
A memorandum of understanding (MOU) between LTV and CyTA leaked to the press seemed to give the impression that the deal was designed to place barriers to other players. Concerns that competition laws were being breached forced the hand of the Competition Commission (CC), which earlier this week launched raids on the two organisations’ offices, seizing print documents and electronic data.
Anthony Voskarides, CEO of private operators OTENet Cyprus, yesterday confirmed to the Mail that the company had lodged a complaint with the European Commission’s Competition Department.
Voskarides said: “What we are protesting is that CyTA is using its economic clout as a state-owned monopoly to gain complete dominance over the emergent digital platform.
“If it links up with LTV and gains television content as well – especially broadcasting rights over Cypriot and UEFA football – this will effectively stop anyone else from investing in triple play. The costs would be too prohibitive.”
Triple play is a system providing an all-in-one telephony, internet and digital television package through CyTA’s copper cable network.
Given CyTA is a semi-governmental organisation, any deal it makes must get the green light from Parliament. With political parties now getting into the mix over the furore, the contentious agreement is to be discussed at the upcoming House plenum on Thursday.
But before that, on Monday or Wednesday, the House Watchdog Committee will invite CyTA officials to get their side of the story.
“We have nothing to worry about,” CyTA’s deputy general manager Fotis Savvides told the Mail.
“Everything we did was by the book, we have broken no laws.”
CyTA’s main line of defence is that the deal with LTV does not exclude any other television content provider from joining the miVision platform. Therefore, the argument goes, the agreement puts no hindrances on competition.
But critics dismiss this as a pretext. While agreeing that the contentious deal is not exclusive, they say that anyone else wishing to provide digital television content in the future will have only one option – CyTA.
“It’s spin-doctoring,” commented OTENet’s Voskarides. “Right now only CyTA has the infrastructure supporting terrestrial digital television. Using their enormous capital, they’ll be able to offer packages at rock-bottom prices. Which private company can compete with that? Who will even consider investing?
“In a nutshell, they are muscling other telecom providers out of the business through sheer economic might,” added Voskarides.
Wednesday’s surprise inspection at CyTA’s and LTV’s offices by the Competition Commission was not without its share of backlash.
CyTA’s Savvides will be suing the Competition Commission for accessing his personal email.
During the raid, CyTA general manager Nicos Timotheou protested when CC agents tried to look at his email, and the matter ended there. However, 24 hours later the officers, having received legal advice, they returned to his office and accessed the material.
And sources told the Mail that yesterday morning Timotheou yesterday met with President Papadopoulos at the Presidential Palace to discuss the contentious agreement.
Timotheou was unavailable for comment later in the day.
