2017 Cyprus - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses

Cyprus’s government aiming for 2017 part-privatisation of Cyta

Despite the liberalisation of Cyprus’s telecom sector, the market overall continues to be dominated by the incumbent, Cyta. The government has rekindled plans to privatise Cyta, which is still fully-owned by the state, as part of a wider financial bailout package. Although the process has been delayed and amended as a result of political opposition, in January 2017 a new scheme was put forward in which the government would retain a majority stake in the operator and have power of veto over important managerial decisions. This potentially places added uncertainty for bidders, which would not have full control over a company which has failed to invest adequately in its networks in recent years, and which has seen its share of the fixed-voice, broadband and mobile markets dwindle steadily.

Improved regulatory conditions, particularly in relation to network interconnection and access, has given competing operators the confidence to invest in network infrastructure, to make use of unbundled local loops and to launch competing services.

The Cypriot mobile market is served by three mobile network operators. The two established players Cytamobile-Vodafone and MTN Cyprus were joined by a third operator, PrimeTel, in 2015 soon after the company secured mobile spectrum licences. PrimeTel had offered services as an MVNO since 2011. Following the award of LTE-suitable spectrum in the 800MHz and 2600MHz bands in June 2016, the cableco Cablenet, which also offers mobile services as an MVNO, is expected to launch commercial services over its own network later in 2017.

The broadband market in Cyprus is developing steadily following a few years of low growth exacerbated by economic difficulties. DSL remains the dominant access platform, with cable broadband restricted to a single operator, Cablenet. Although Cablenet’s network was for long concentrated in a few key towns, under the management of its majority-owner GO the company has invested in both its fixed-line and mobile networks, and by early 2017 its cable infrastructure covered 45% of the island’s premises. Fibre infrastructure in Cyprus is still comparatively in its infancy, with the incumbent telco Cyta having lacked the resources to invest in a fibre network. However, the anticipated privatisation of the company could also create a separate operator to manage networks resources and attract investors. This could in turn be a catalyst for future progress in the sector.

Alternative DSL operators have taken advantage of regulated wholesale network access, resulting in a steady fall in the incumbent’s broadband market share. Growing broadband usage, supported by government policy, is also shaping Cyprus’s emerging internet society and encouraging developments in e-commerce.

This report provides an overview of Cyprus’s fixed-line telecoms market, outlining the regulatory environment and reviewing updated operational and financial data on the major operators and the market as a whole. The report also covers the broadband and digital media markets, detailing industry developments and providing key statistics on the cable, DSL and fibre sectors as well as on IP-delivered services such as videostreaming. In addition the report assesses the mobile market, covering a range of voice and data services, regulatory developments, and technologies. Cyprus is a divided island with most of the information in this report concerned only with the Greek Cypriot area.

Key developments:

• Legislation again put before Parliament for privatisation of Cyta by April 2017;
• Cyta’s USO obligations extended;
• Ministry of Communications completes 800MHz and 2600MHz spectrum auction;
• PrimeTel, MTN and Cyta extend LTE services;
• Cablenet expected to launch commercial LTE services later in 2017;
• Mobile broadband penetration reaches 34%;
• Estonian government to help Cyprus develop e-government functions and systems;
• Cablenet sees growth in broadband subscriber base, gains 22% broadband market share;
• Government commits to all premises having access to 30Mb/s broadband by 2020;
• Report update includes the regulator’s market data to June 2016, operators’ data updates to Q4 2016, recent market developments.

Companies mentioned in this report:

Cyta, OTEnet, PrimeTel, Cytamobile-Vodafone, MTN Cyprus, Kibris Telecom, Cablenet, Multichoice.