THE NEW head of the Competition Commission Giorgos Christophides, said on assuming his responsibilities on Tuesday that he would continue his predecessor’s efforts to open up the telecommunications market, currently dominated by CyTA. His predecessor was involved in a protracted legal battle with the Authority over its new mobile telephony rates, which he insisted were stifling free competition.
The latest court decision, issued last Friday, upheld the Commission’s position that CyTA had to increase its mobile telephony rates to pre-April levels. Christophides has said he was not satisfied with the Authority’s foot-dragging on the matter. Its board had announced that it would raise the rates in a month, because, by law, it had to give customers a month’s notice and if it won its court battle and was allowed to charge the lower rates again, it would credit subscribers with the difference they had paid.
Announcing that it would give back the difference to subscribers if it eventually won the court case is intended to stop them from going to the rival service provider, Areeba, which would have a price advantage. By so doing, CyTA would simply be substantiating what the Commission has been claiming all along – that it was using its dominant position to stifle competition. No subscriber would have the incentive to switch to Areeba, with CyTA promising to credit accounts if it wins the court case.
As consumers, we should be welcoming CyTA’s announcement, and nobody can deny the paradox of forcing the Authority to raise its rates for the sake of competition. But the commission is trying to impose the EU directive on free competition and is being prevented from doing so by the Authority, which is determined to hold on to its 94 per cent share of the mobile telephony market. This would threaten Areeba’s viability and if it is forced to close down, the EU would probably fine the Republic for failing to open up the mobile telephony market to competition.
This why Christophides on his first day in office sought the advice of the Attorney-general on how to pursue the issue, and spoke of the possibility of imposing a £5,000 a day fine on CyTA for ignoring the Commission’s instructions. Even if he followed this course for the next month, the Authority would be fined £150,000, which is a negligible amount for it and a very small price for maintaining its monopolistic status.
Taking punitive measures against CyTA is not the answer as it will have no effect. What is needed is for the government to tell the Authority’s board to stop behaving in such an arrogant way and to co-operate with the Competition Commission instead of seeing it as an enemy who must be defeated. All this nonsense, including threats to ignore the interim court order, attacks against the Commission and populist appeals to the interests of the consumer, must stop. Is it really worth having the European Commission penalise the government for failing to open up the telecommunications market, just so that CyTA can maintain its monopolistic status?
