NICOSIA (Reuters) – Independent telecom providers in Cyprus have warned that the imminent deregulation of the island’s market could flop unless the dominance of state monopoly CyTA is curbed. CyTA, which is government-controlled, stands to lose its monopoly on mobile telecom services later this year when authorities auction off a GSM license to the private sector. Earlier this week, regulators started accepting applications from independents for general authorization services. But independent operators say the corporation has effectively managed to nip competition in the bud by slashing rates to the public and, they say, hiking fees to Internet service providers before the island’s regulator fully took control of the market. «CyTA is playing every possible card… but in Cyprus the difficulty is that it is such a small market, which would make it difficult for a competitor to enter,» said Anthony Voscarides, head of the industry group Free Telecoms Association (FTA). «But I do think that the regulator’s office has been doing an amazing job, considering the fact that it entered the market so late, but they have a lot of resistance from CyTA,» Voscarides told Reuters. CyTA rejects the accusations. «We are certainly not using our position to muscle people out,» said spokesman Paris Menelaou. «We make sure we abide by what the regulator tells us to do.» Controversy Authorities got a foretaste of what may be in store with the disclosure this week that Greek mobile operator Stet Hellas has ruled out participating in the GSM auction process, because regulators hadn’t made the necessary moves to counter CyTA’s dominance. The latest round of controversy also hinges on moves by the authority to hike the fees it charges to Internet service providers for access to international leased lines. The authority says it had previously offered ISPs lower access rates than the standard price but can no longer offer the service under new regulations that bar different pricing rates for the same product. CyTA got brickbats from independents last October when it reduced mobile rates by up to 70 percent. The FTA said it was a bid to pre-emptively squeeze out competition in selling below cost, while CyTA countered that the move was long on the cards and its rates are above cost. «The association has screamed about this. Now we are hoping that the regulator will increase the (CyTA) rates,» said Voscarides.