News dalla rete ITA

3 Dicembre 2019

Cipro

CYTA TELECOM IS LOOKING AT OPTIONS ON HOW TO DENATIONALISE

With its profits continuing to rise on the back of containing expenses, state telecoms operator Cyta will spend €500,000 to hire consultants to advise on its privatisation process and the search for strategic investors.  According to a government decision, Cyta is required to explore all options available for privatising their business, from selling off shares, creating privately owned subsidiaries or partial privatisation of the Cyprus Telecommunications Authority through the recruitment and selection of a Strategic Partner or Investor.Despite privatisation or at least partial de-nationalisation, appearing to be a one-way street for the telecom company as it continues to bleed market share, economists say that now is the time for Cyta to take the bold step as its future as a quasi-state company is blurry.Cyta’s privatisation has been on the table from the turn of the century, with every passing year seeing the government making plans to denationalise the authority, with special reference in the budget submitted to the Parliament.Fiscal Council chair Demetris Georgiades said that further delays would see Cypriot taxpayers bailing out another failed state enterprise, or even worse weeping over its ruins as in the case of the late Cyprus Airways.This despite arguments portraying the privatisation of the authority as a bad move as it is a company which has just announced its highest profit in recent years.“However, the profitability of the organisation was due to cutting down on costs, not on expanding its clientele,” argued Georgiades who noted that potential investors wanting to buy Cyta will be looking at the market share the company possesses.Georgiades noted that Cyta’s mobile phone market share is dropping dangerously year-by-year and will find itself with a small percentage, unable to attract serious investors.Although Cyta still controls more than half of the market, it has been losing grip at a speedy pace over the past few years.Cyta has 40.5% of market of mobile phone contracts with internet access, EPIC has 47.7% and Primetel 11.9%.“While in 2013, the Cyprus Telecommunication Authority had the lion’s share of the market with almost 70%, and six years later it has come close to dropping below 50% with competitors coming dangerously close,” said Georgiades.“Already new regulations allow subscribers of companies registered in other European Union member states to use their phones for four months before being disconnected and prompted to become subscribers of a local telecoms company,” said Georgiades.He argued Cyta will also be faced with challenges from EU directives which encourage the installation of free wi-fi spots in cities across the EU, which will be a blow to all telecom companies, as consumers will be able to use mobile phone applications to make their calls.The €500,000 set aside in the budget will be used for calls for tenders to invite independent specialised financial and legal consultants to look into the various options and come up with a roadmap.While Cyta aims to keep costs below 2019 levels, the telecoms authority’s 2020 budget foresees revenue of €349.1 mln compared to revenue of €340.5 mln in 2019.The increase is attributed to revenues from telecommunications services projected at €343 mln from €331.5 mln this year. Budget expenditure for 2020 amounts to €306.5 mln from €310.5 mln in 2019. (ICE BEIRUT)


Fonte notizia: Financial Mirror