CyTA has decided to abide by a directive order issued by the Competition Commission ordering it to reverse the price reductions on international call rates.
The Competition Commission ruled that CyTA abused its dominant market position and that its steep price reductions on international call rates were deliberately made to hurt competition. The complaint was lodged by areeba, OTEnet, Thunderworx and Teledome.
The Competition Commission has set the first hearing date for April 11, 2005 according to Financial Mirror information, where CyTA will be allowed to defend its case.
The Competition Commission however has decided in advance that the maximum financial damage that it may seek from the independent carriers who lodged the protest will be limited to CYP 5.000 each, in the event that the case is overturned.
The independent companies say that because CyTA controls more than 75% of the market, it has a dominant position and it should not be allowed to slash call rates for the most popular countries like Greece and UK from 3.9c per minute to 2.40c after discounts and 2.10 for its 1018 service. The independents charge that CyTA’s pricing effectively squeezes their profit margins and is in abuse of the latter’s dominant position in the market.
Neophytos Papadopoulos, Director of Telecom Regulator’s office told the Financial Mirror that contrary to impression, the Regulator is involved in setting the regulatory framework for the outbound international calls until they exit Cyprus, but is not responsible for how the calls terminate.
MOBILE CUTS OK
The recent price reductions announced by CyTA on mobile telephony however are not affected by the dispute on international rates.
Papadopoulos explained to the Financial Mirror that since the mobile price reductions are above the costs of CyTA, the Telecom Regulator’s office will not issue any directives on this matter.
Since last September, CyTA has handed its cost details to the Telecom Regulator, who can decide on whether price reductions by CyTA are fair and in the spirit of competition or not. In the case of the mobile call reductions, these have been deemed to be above the costs of the Authority.
CyTA announced that as of April, 2005, it is changing its pricing policy, scrapping the peak/light hours and shifting to charging per second instead of per minute irrespective of when the call is placed.
CyTA said it will charge its mobile customers according to the amount of time talked, with the charge declining from 3.3 cent per minute for up to 6 minutes per month to 1.8 cent per minute for call durations in excess of 1.000 minutes per month. For the soeasy prepaid subscribers, the prices are slashed to 3.9 cent per minute to fixed or mobile from 6c and 5c respectively.
CyTA also launched its dual SIM card service, ideal for those with car phones with the one-off subscription charge fixed at CYP 10.
WHOLESALE RATES
Papadopoulos however revealed that CyTA’s attempt to hike the monthly rental on fixed lines from CYP 5 to CYP 8 has been blocked, and following a new directive, the new price will most probably hover around CYP 7 per month rental.
Equally important is the impending directive set to be issued on Friday, April 8, 2005 determining the price range for rates that CyTA can charge the independent companies for various services.
The inter-connectivity rates between CyTA and the independents are seen as crucial in opening up the market and allowing the offering of new services.
