Further delay in GSM auction

NICOSIA – The Cypriot government may further delay the auction of the first mobile telephone license to the private sector after misgivings expressed by would-be bidders at the current monopoly of state telecoms provider CyTA. «A very slight delay is being considered… from June for two or three months until September. However nothing is final,» a telecoms source told Reuters yesterday when asked about the possibility of a delay. The government will make a final assessment of the situation in the next few days, the source added. A delay would not go down well in Brussels, where the European Union has already rapped Cypriot authorities once for dragging its feet over the deregulation process. The present auction, the first of its kind on Cyprus, was initially slated to take place late last year, but since then delays have been gradually creeping in. Cyprus is one of 10 mainly ex-communist states joining the European Union in its May 2004 enlargement. Authorities have pledged to open up the market before then. A government official earlier told Reuters the auction may be put off until September, citing complaints by telecom companies that they were not being given a level playing field to enter the market with CyTA, which has been providing mobile services since 1988 when the government gave it a permit. When the second GSM license is issued, CyTA will automatically be given a license and be obliged to pay exactly the same amount as the private bidder paid in the auction process. One mobile operator, Greece’s Stet Hellas, said in March it would not bid for a license in Cyprus because the government had failed to make the necessary market reforms. Telecom companies which took part in a public consultation process have expressed unease at the auction of a second mobile GSM license while the regulatory framework of a deregulated telecoms market was still being put into place. Issues ranging from national roaming and numbering arrangements have not been clarified, nor the connection fees that CyTA will charge the new telecoms provider. The new communications minister said last week that CyTA would be modernized without the state relinquishing its ownership.