ECONOMY

Scancom outbids CosmOTE for 2nd Cyprus GSM slot

NICOSIA – Cyprus awarded its first private sector GSM license to the Lebanese-backed Scancom group yesterday, beating its rival, a unit of Greece’s CosmOTE, which had been widely seen as the favorite. In Cyprus’s first foray into telecoms deregulation, Scancom placed a winning 12.75-million-Cyprus pound (21.86 million euro) bid for the 20-year concession, more than double the minimum 5.7 million pounds set by regulators when bidding began on Wednesday. CosmOTE pulled out at 12 million pounds. Scancom, which is active in Africa but not widely known elsewhere, is backed by Lebanese financiers said to have close links to Prime Minister Rafik al-Hariri. One of its majority shareholders is Investcom, a company based in Luxembourg. «We expect to invest tens of millions of dollars to develop our market,» Investcom Executive Director Jamal Ramadan told Reuters. Scancom will compete for market share with CyTA, the state-backed incumbent which now has a virtual monopoly on fixed and mobile services. Among a population of around 750,000, some 65 percent of islanders subscribe to the CyTA GSM service. «We would target a market share of anything between 33 and 40 percent,» Ramadan said. Cyprus joins the European Union in May 2004 and has pledged to open up the mobile market to competition by then. «The process was a success, both in terms of the auction amount and because we met our obligation to Brussels,» said telecoms regulator Vassos Pyrgos. CosmOTE bowed out in the 11th round. «CosmOTE decided not to participate in subsequent rounds of the auction process, as a higher offer would not meet the return criteria set in its business plan,» the company said. Scancom has 30 days to start meeting its financial obligations of either paying the license fee or opting to pay a 20 percent down payment, and the rest spread out over a four-year period.