Two bidders left for Cyprus’s GSM cellphone license

NICOSIA – Cyprus will resume today its auction for the country’s first private sector mobile phone license with bids at 9.75 million Cyprus pounds ($19.5 million) for the 20-year concession, well above the minimum sought by regulators. CosmOTE Cyprus, an affiliate of the major Greek mobile telecom operator CosmOTE, and Scancom, a consortium of Lebanese and Cypriot investors active in Africa, reached an eighth round of bidding by 5 p.m. local time. Both launched first bids at 5.7 million pounds, the minimum price sought by the regulators. «We have just completed the eighth round and we will resume tomorrow (Thursday),» telecoms regulator Vassos Pyrgos told Reuters. «It went very smoothly.» The bidding level was higher than the 7-8 million Cyprus pounds some industry analysts expected. Bidding is expected to resume at 10 a.m. today. Cyprus needs to deregulate its telecoms market before it joins the European Union in May. Past delays in opening up the sector to competition had drawn rebukes from Brussels. Regulators set an increment of up to 10 percent in each round of the auction, held under tight security in a Nicosia hotel with delegations from the two parties kept apart. Bidding will continue until one of the two bows out. «If neither party accept the increment then authorities go back to the previous round and the winner is picked from the draw of each round,» Pyrgos said. The newcomer will compete for market share with CyTA, the government-controlled incumbent which has a monopoly on mobile and fixed-line services. «I don’t think you can actually say what is fair value for a license,» said a telecoms industry source when asked to put a price tag to the license. «Essentially this is a relatively big market of wealthy people with money to spend on phone calls.» The license will apply only to the southern two-thirds of the partitioned island. The northern part is a unrecognized breakaway Turkish-Cypriot state. An estimated 65 percent of 750,000 Greek Cypriots subscribe to CyTA’s GSM service, but the sector also generates revenue from roaming traffic of the 2.5 million tourists who visit southern Cyprus each year. CyTA, which introduced the GSM standard in 1995, will be compelled to pay for a license a sum equal to what the auction winner will pay. CosmOTE Cyprus comprises CosmOTE Greece, Greek electronics retailer Germanos and the Cypriot Shakolas Group. Local newspapers have linked Scancom with business interests related to Lebanese Prime Minister Rafik al-Hariri.