More investment needed in broadband, wireless

…Telecom Regulator sees opportunities in broadband within next 2 years

…Wifi Max auctions set to be held in 2007

 

Cyprus should follow the example of a growing number of countries joining the information society and introduce incentives to attract private companies to invest in the sector in order to exploit the opportunities in e-learning, commerce and medicine among others.

Telecom and Post Regulator Vassos Pyrgos said that in the next two years, his office will be concentrating on efforts to open up the broadband and wireless market to attract new investments in the field.

“Our duty is to create the right environment for fair competition so that every household gets access to broadband and wireless services,” Pyrgos said during the presentation of the 2005 annual report by the Office of Electronic Communications and Postal Regulation (OCECPR).

Pyrgos wants to encourage investment in the broadband sector with the objective to increase the penetration rate and in order to reverse the digital gap between urban and rural areas, as opposed to the current situation whereby the bulk of broadband connections are only available in the major towns.

The broadband penetration rate is currently 7.3% based on the whole population, but if the number of connections are compared to the number of households of around 225.000 to 250.000, then the penetration rate increases, according to the Director General of the OCECPR, Neophytos Papadopoulos.

Pyrgos acknowledged that the broadband market is still in its infancy and the number of connections increased after CyTA, the state-owned telecom secured the transmission rights of Cyprus football following its deal with LTV.

“The absence of products is limiting growth. While at the moment people are shifting to broadband for entertainment only (football, online gaming), the future is in multi-purpose services such as triple play (voice-data-video), which will develop into interactive services for e-learning, commerce and medicine,” said Pyrgos.

The OCECPR is hoping that the government committee, set up under the auspices of Finance Minister Michalis Sarris, will soon come up with policy direction to boost broadband services.

“An important role remains with the government at this stage, which, through the development of products such as e-Government, e-Health and e-Education represents the biggest provider of content,” said Deputy Telecom and Post Regulator Panayiotis Kakkouras.

 

Fixed Wireless Access

 

Another way of speeding up broadband connections in the cities and rural areas is through Fixed Wireless Access, or broadband through high frequency transmission, with the OCECPR currently in the process of dividing the island into different zones.

“The auction for wireless services and provision of permits will be made in the second half of 2007 with new companies commencing operations in 2008,” he said.

The authorization and promotion of wireless access systems, such as Wifi Max, aim to increase competition in the broadband sector and allow Cyprus to meet the objectives of the Lisbon Agenda and the targets for 2010, which Cyprus has adopted.

 

 

 

Transmitters

 

Broadband access, especially through a wireless network needs a secure and reliable transmitter network, something that is now hampering the smooth operation of the two companies involved in mobile telephony, Cytamobile Vodafone and areeba.

Pyrgos confirmed that Cyprus has been found to be in infringement of EU laws on the availability of transmitters, which local authorities are now disputing and pulling down through court orders, something that eventually affects reception.

“Before the arrival of areeba, nobody cared about the location of transmitters, but then it became a serious issue that is now haunting CyTA as well,” said Pyrgos, adding that there is now a code of conduct for the location of transmitters, with clear cut procedures as to how an operator may place transmitters.

The OCECPR also had to draft procedures on rights of way afforded to telecoms for extending their network through the road network. Here as well, before PrimeTel commenced operations, no local authority was concerned with how CyTA would proceed with roadworks to extend its network, but after PrimeTel showed up, everybody wants right of way and is putting obstacles, barring the smooth expansion plans of the alternative provider, said Pyrgos.

In the context of liberalization of the market, four companies apart from CyTA have proceeded with the provision of Directory Services with mixed results, with at least one having a very complicated pricing system, which is hampering its smooth growth and not helping in efforts to grab more market share away from CyTA to the alternative operators.

 

Market shares

In fixed national telephony, CyTA maintains a total market dominance with a 94% market share as at June 2006, with the remaining 5.9% shared between OteNet, Telepassport and PrimeTel.

The situation is slightly better in fixed international telephony, with CyTA’s share at 81.3% by June 2006 with 19.7% with the alternative providers such as OteNet, Telepassport and PrimeTel.

In the Internet sector, CyTA only held a 62% market share by June 2006 with Otenet, Avacom, Primetel and Spidernet sharing 37.8% of the market. In the broadband sector, CyTA had 98.2% of the market by September 2006 compared to 1.8% for Primetel, which however, only started retail operations that month.

In mobile telephony, Cytamobile Vodafone has 91.9% of the market with areeba controlling a respectable 8.1% share with the mobile telephony penetration rate at 102.1%.