Cyprus picks finalists for telecoms deregulation

NICOSIA (Reuters) – Cyprus is to announce today the qualifiers for its GSM mobile license auction slated for later this month, the final phase of dismantling a state monopoly on its mobile telecoms sector. Cyprus joins the European Union in May 2004 and is obliged to allow competition in the sector before then. Cosmote Telecommunications (Cyprus) – a unit of Greece’s CosmOTE, Scancom (Cyprus) and Atlantic Crest Investment, with links to Monaco Telecom – has applied to take part in the contest on October 29. With a start price of 5.7 million pounds ($11.4) the auction will be held amid tight security at a hotel in the capital Nicosia. «Depending on the interest shown and the number of rounds it may go on for more than one day if necessary,» Vassos Pyrgos, commissioner for telecommunications and postal regulation, told Reuters in an interview. The group which wins is required to start offering services within six months of winning the auction. Newcomers to the process, the authorities are to hold a mock auction among civil servants tomorrow, and a test run with bidders on October 20 before the real thing at the end of the month, Pyrgos said. State-backed CyTA is currently the only mobile telephony provider in the southern part of Cyprus controlled by the internationally recognized government. The island has a population of just under a million, bolstered by an additional 2.5 million holidaymakers annually, mainly from Western Europe. CyTA has cut its charges considerably over the past 18 months in a move some private operators say is an attempt to nip competition in the bud. Some 65 percent of Cypriots subscribe to its CyTA GSM service. The telecoms company, considered by many a state cash cow because of the surpluses it generates, will be charged a license fee of an amount equal to what the private player will pay in the auction. Private operators have said in the past CyTA’s dominance had put some foreign players off. But Pyrgos said that his office was satisfied with the response of the three groups to the auction. «We have enough interest and competition to open up the market, which is what matters,» he said. The winning bidder, he said, would invest an estimated $100 million to develop their network. «The fact that three groups have decided this is a good investment for them is good enough for us.»

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