Cyprus Telecommunications Liberalisation? Don't Hold Your Breath

by Lorys Charalambous, Tax-News.com, Nicosia

30 July 2002

According to Cyprus's government spokesman Michalis Pappetrou, a cabinet meeting last week discussed specific details of the introduction of competition into the mobile phone market, and Minister for Transport, Communications and Works, Averof Neophytou will shortly be announcing how bidding for new licenses will be organised.

Papapetrou said that Neophytou has proposed to transfer control of CyTA (Cyprus Telecommunications Authority) to the Finance Ministry since his own ministry is responsible for the monopoly state operating company and would have a conflict of interest once there is a competitor.

Currently there are said to be 20 applications for the new license (only one is likely to be issued by Telecommunications Regulator Vassos Pyrgos), and it is thought that the Electricity Authority of Cyprus (EAC), which has made a strong application, is unlikely to be granted a license, although it may be allowed to participate in a consortium. Supposedly, Neophytou and Trade Minister Nicos Rolandis, who looks after EAC, have cobbled together an acceptable compromise.

Liberalisation of the government's fixed-line monopoly is still set for 'next year or the year after' - as it has been for the last five years. The Cyprus government has predicted imminent telecoms liberalisation so many times that people have stopped believing in it.

Neophytou himself is in favour of privatisation, but he faces entrenched opposition from dinosaurs in government and the public sector who have plenty of cosy situations to protect. Cyprus is still mostly a shining example of 'crony' capitalism, which pays lip service to transparency but shrinks away when it comes time to dive into the icy water.

Neophytou says bravely: "We are not doing it because it is an obligation of Europe. We are doing it because we believe in the free enterprise system, in competition and the liberalisation of the market," he said.

The Minister says that liberalisation - of telecommunications, transport and the posts - is key to the government's objective of turning Cyprus into a regional hub. "When you live in a society that has cheap and good quality telecommunications, cheap air transport, an efficient and good quality postal service and if you also have modern airports, ports and good road infrastructure you have the ability to implement your vision to become a real regional hub - the centre for services and the bridge between Europe and the Middle East," he said.

Recommended