SUBSCRIBER channel LTV and state telecom CyTA dropped a bombshell this week, announcing to the Competition Commission that no formal agreement exists between the two.
The Commission is currently investigating allegations by private telecom providers that the intended collaboration between the two organisations breaches anti-trust laws and creates a super-monopoly in the small Cypriot market.
LTV was reported to have reached a deal with the board of CyTA to manage the miVision platform from 2006. The deal is said to be at a minimum fee of £2.5 million per year.
The co-operation agreement provided that subscriber channels LTV and ALFA remain on Multichoice’s platform until 2010, while at the same time LTV and Alfa will supply miVision, CyTA’s digital television platform, with entertainment content – such as movies, football, and games.
In the meantime, the Commission is probing whether the arrangement between LTV and their platform administrators Multichoice (MCC) is exclusive and therefore illegal. To complicate matters further, LTV has offered to buy out 100 per cent of MCC’s shares, but only on condition that their arrangement is found to be illegal by the Commission.
Bizarrely, this means that if the partnership between MCC and LTV is deemed to breach competition laws, then LTV will be free to buy out MCC and join forces with CyTA – an arrangement which itself is under suspicion of violating competition laws.
It is feared that an exclusive arrangement between LTV and CyTA would mean television viewers would have no choice but to pay premium fees to get digital television in their living rooms.
But in a diplomatic move this week, LTV and CyTA informed the Commission they had entered no deal; rather, they claimed, they had signed an “intent of co-operation.”
Industry insiders say this tactical manoeuvre was to be expected, since LTV and CyTA want to see how the LTV-MCC case develops before proceeding with any actions of their own.
It would also take the heat off them, following the uproar from private operators and television channels and the extensive media coverage of the controversial deal.
“They are waiting for the smoke to clear,” a source told the Mail yesterday.
“Although on the surface these are two separate issues, in reality they are one and the same.”
Competition Commisssioner Giorgos Christofides said yesterday that his agency had sent out a “statement of objections” to CyTA and LTV. The statement of objections is essentially a “charge sheet” listing any breaches of competition.
The two corporations need to respond to the statement of objections by May 22 and, depending on their answers, the Commission would then decide whether penalties should be imposed.
Meanwhile LTV’s offer to buy out MCC expires on May 29, so the Commission is working on a very tight deadline.
