PrimeTel, EAC’s strategic partner in the telecommunications sector, is about to shake the market with its Triple Play service and herald the first real challenge to the state owned CyTA in the fixed telephony and ADSL-linked home entertainment market.
Stephanos N. Stephanou, Marketing Manager at PrimeTel, told the Financial Mirror that following the successful testing of its services, the company will launch its full range of services within the first quarter of this year.
“We aim to reach 170,000 households, initially in the Nicosia and Limassol area with plans for rapid provision of services island-wide,” said Stephanou.
Challenge to CyTA
Unlike other telecom startups, PrimeTel is not a reseller relying exclusively on CyTA’s network to reach the public, but boasts its own broadband fibre optic backbone network of 8Gbps interconnecting Nicosia, Limassol, Larnaca and Paphos.
Having invested CYP 10 mln to rewire Cyprus and using the latest state-of-the-art equipment, PrimeTel is by far the only player with the financial muscle, knowhow and experience to fight CyTA for market share.
Being a strategic partner of the EAC, PrimeTel is sharing the electricity utility’s network for its own fibre optic cables, where available underground, but mostly overhead suspended from the EAC poles and now it is bidding hard to be allowed to place its equipment at the CyTA local sub-loops to gain access to the 170,000 households that it is targeting. Primetel has signed an agreement with CYTA for the use of its local cable network.
For the right to use the EAC network, PrimeTel pays an annual rent of CYP 300,000 to the EAC.
PrimeTel also boasts its own international network with network nodes in Greece, the UK and Russia, where its holding company, Teledev East has been active in the Russian region for over a decade.
This allows PrimeTel to route outgoing calls to the most popular destinations on its own network, allowing it to control quality and at the same time decide on pricing.
Once fully operational, PrimeTel is seen aiming for a minimum 10% to 15% of the market by introducing innovative products at premium quality combined with excellent support service at very competitive prices.
Triple Play
Triple Play is the industry term used to describe a combined package of fixed telephony, fast and continuous access to the Internet and home entertainment services like TV, movies and video-on-demand through one single connection.
PrimeTel Marketing Manager explained that a subscriber opting to choose PrimeTel would thus save the monthly rental paid to CyTA, gain access to the Internet at speeds of up to 24Mbps using ADSL2+ (the latest technology) and watch hundreds of TV channels and films on order, play on-line games, pause and record live TV and do home shopping by the use of the remote control.
Many of the features of the Triple Play services on offer have been designed by PrimeTel and tested over the years.
Delays
The Group’s vast experience and knowledge built over the last decade through the provision of similar services in the Russian Federation is seen reducing the chances of any technical glitches. In fact, the only delay may come from CyTA’s reluctance to implement and adhere to its signed and binding agreements to open up its network and allow PrimeTel to hire and place its equipment at the sub-loops.
“CyTA has given assurances to the Telecom Regulator that they will not engage in further delaying tactics, and we hope that they keep their promise, otherwise, Cyprus risks facing punitive fines imposed by Brussels as was the case in Portugal and Luxembourg, where state-owned operators were using delaying tactics to keep privately owned companies from entering the market,” said Stephanou.
PrimeTel is also facing other hurdles from the Ministries, the local Municipalities and other government departments for not allowing it to lay its fiber optic cables underground.
Strong backing
PrimeTel is 93% owned by Teledev East, the Cypriot telecom multinational active in Russia, which so far has invested CYP 10 mln in the Cyprus project and plans to invest more in the future once fully operational.
The main shareholders of Teledev East are Francoudi & Stephanou, Pericles Manglis group of companies, while smaller stakes are held by the Tseriotis family, the Cyprus Development Bank and Alco products
Meanwhile, the EAC has an option to buy up to 40% of PrimeTel through a privately arranged agreement. The option, which was initially signed for a five year term, expires in two-and-half years time.
