ECONOMY

Cyprus holds GSM auction

NICOSIA – Cyprus plunges into the deep end of telecoms deregulation today, selling off its first GSM license to the private sector and dislodging a decades-old state monopoly, a required step before joining the European Union next year. CosmOTE Cyprus, an affiliate of Greek major CosmOTE, and Scancom, a company with Lebanese investors, are in the running for a 20-year license to compete with incumbent CyTA. Bidding starts at 5.7 million Cyprus pounds ($11.4 million). «Everything is ready. We expect to start at 10.00 a.m. on Wednesday,» deputy telecoms regulator Panayiotis Kakkouras told Reuters. The license is valid only for the southern Greek Cypriot-controlled areas of the partitioned island, where state-backed CyTA is currently the only provider of mobile and fixed-line services. Although CosmOTE is the most instantly recognizable name among the two bidders, industry experts said nothing could be taken for granted and the final outcome depended on how deep their pockets were. Scancom, a company active in Africa, is seen as keen to get a foothold in a European country, but the ethnic affinity between Greece and Cyprus could partly strengthen the case for expansion-driven CosmOTE, some analysts say. «I reckon anything between 7-8 million, but that is just my personal view,» said a private sector analyst. Some 65 percent of 750,000 people living in southern Cyprus have mobile phone contracts with CyTA, which is estimated to generate some 60 million pounds in revenues annually. As well as breaking CyTA’s dominance, deregulation is expected to trigger technological advances in Cyprus which has lagged behind other European countries in making progress in telecoms and IT. «It is very important for there to be competition. Up until now CyTA enjoyed a monopoly on everything and the market was stagnant,» said Anthony Voscarides, CEO of PlanitisNet, a private ISP which is planning to make its foray into the fixed-line market. Gadget lovers will be pleased to know that one of the first likely impacts of deregulation will be companies offering free handsets with subscriptions. «That on its own will generate economic growth, and with different offers geared toward different population groups I think the mobile market is going to get much bigger,» Voscarides said. With a tourism intake of 2.5 million annually, roaming revenues could equate to between 20 and 30 percent of an operators’ revenue, Voscarides said. Nicosia wants the newcomer to be up and running within six months of winning the license. As an additional sweetener, it is offering a 3G license for free, provided the operator activates those services within 10 years of winning the concession. State-controlled CyTA will be obliged to pay for a license a sum equal to that the newcomer will pay.