The Commission for Protection of Competition (CPC) appears to have engaged in a major exercise to confuse the public following its decision late Thursday that the preliminary deal signed between CYTA and LTV is anti-competitive whereas the real agreement will likely be approved.
The decision, which received wide publicity in the press refers only to the Memorandum Of Understanding signed between CYTA and LTV on February 13, 2006 and has no bearing on the real and binding agreement that according to Financial Mirror sources was handed to the CPC recently.
Since CYTA maintains that the MoU was rushed through in order to thwart any attempt by LTV to sign similar deals with other companies, CYTA maintains that its binding deal, recently signed with LTV is still on and is being considered by the CPC.
In the new deal, likely to be endorsed by the CPC, CYTA and LTV will be allowed to proceed with their agreement, with the exception that LTV will not be allowed to enter into an exclusive agreement with CYTA.
The Financial Mirror understands that LTV has already started negotiations with alternative telecom providers such as OTEnet and PrimeTel to give them a different program mix, but which will also include Cypriot football.
MoU anti competitive
CPC Chairman George Christofides was called to rule on the MoU initiated between CYTA and LTV on February 13, 2006 according to which LTV would supply content to CYTA’s digital platform miVision.
Christofides said the two companies have been ordered to appear before the Commission on July 24 in order to defend their positions and seek a reduction in the punishment that the CPC may impose on them.
Under protection rules, the CPC may impose a fine of up to 10% of the gross revenue of each company if it finds that the agreement was made to stifle competition.
Christofides said the reason why the MoU was ruled as anti competitive and in violation of competition rules of the island is because it included exclusive clauses regarding the transmission of local football games.
The CPC also took into account the dominant market positions of LTV in the digital TV market and CYTA in the digital telephony market.
Another factor that was taken into consideration is the long duration of the deal — it would end 2020, as well as the huge amount of money that CYTA has agreed to pay to LTV over the duration of the deal and the fact that the deal blocked others from entering into the field.
Christofides said that the CPC wants to boost competition in the telecom area as well as the now forming digital market, with the objective of allowing major new players like OTEnet, PrimeTel and others to gain a foothold into the market.
MCC takeover
Christofides meanwhile clarified that the takeover bid submitted by LTV for control of Multichoice (Cyprus) does not fall into its jurisdiction since LTV did not manage to get more than 50% of the company.
LTV and MCC are involved in a bitter fight regarding future content management after LTV broke off its exclusive deal with MCC to sign the deal with miVision, which was countered by MCC, which managed to secure new content material from its Greek partners with the addition of 6 digital channels of films and sports.
