Telcos looking at Cyprus

NICOSIA – Foreign companies are showing interest in Cyprus’s soon-to-be deregulated telecoms market as the east Mediterranean island prepares for crucial EU integration talks, the newly appointed industry regulator told Reuters in an interview. Telecommunications Commissioner Vassos Pyrgos, whose office is sponsored by the Cypriot government and the EU, said world leader Vodafone and Greek number one operator CosmOTE had made inquiries into the progress Cyprus is making in liberalizing its telecoms sector. «Companies have been requesting more information about the process of liberalization,» said Pyrgos. «They’ve indicated their interest in participating in a competition, when the time comes, in order to acquire a license for the operation of telecommunications services.» Cyprus’s telecoms market, a lucrative sector in a country with a per capita income close to the EU average, is currently controlled by state monopoly Cyprus Telecommunications Authority (CyTA). Mobile telephony has an estimated penetration of 60 to 65 percent in a population of 750,000, and unofficial estimates put CyTA’s gross income between 24 million and 36 million Cyprus pounds ($36-54 million) per year. But Pyrgos, a former permanent secretary at the Communications Ministry, said the market is considerably larger when taking into account the 3 million visitors who come to the holiday island each year. «It is a big market. I expect that whoever comes to Cyprus, plus CyTA, will also want to exploit Cyprus’s geographically strategic position. By operating from Cyprus, they can attract clients from the rest of the region,» he said. Pyrgos said the island had an obligation toward the EU to open the market by January 2003. «We will try, if possible, to start the process of liberalizing mobile telephony by the end of this year,» he said. If full deregulation is not effected for any reason by January 1, procedures toward it must be very advanced, he added. Consultants PriceWaterhouseCoopers is assessing how mobile telephony contracts should be awarded, and whether Cyprus should stick to issuing second-generation licenses, the dominant wireless technology in the market, move to the option of third-generation licenses which promise high-speed Internet and video services, or offer a combination. The dull market conditions persist and are unlikely to change for a while.

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