Cyprus Finance Minister Harris Georgiades has reaffirmed the need for the partial privatization of the Cyprus Telecommunications Authority to go ahead as laid out in the government’s budgetary plan.
Georgiades, presenting the state’s budgetary plan for 2019, stressed the need for the partial denationalisation of the Authority in order for it to be able to face commercial challenges in the telecommunications field.
Opposition AKEL MPs questioned Georgiades on what financial data is the government’s policy for partial privatisation of Cyta based on.
Cyta’s privatisation was part of the government's commitments to the country’s international lenders after the bailout in 2013 but it did not proceed because of disagreements put forward by the majority of parties in parliament.
Responding to MPs questions, Georgiades noted that Cyta’s market share is constantly shrinking, while competition and technological developments are rapid.
"We regard the involvement of a strategic investor to be necessary for the organisation to escape public service standards and to be able to operate as a flexible company. This will enable Cyta to face the ever-increasing pressures from competition and technological developments," said Georgiades.
The Finance Minister warned that "if we remain in a state of complacency, considering that Cyta can continue to operate in the context of the 1980s and 1990s, we will be making a serious mistake that will jeopardise a large and important organisation."
The Authority has a share of close to 70% of the fixed telephony and around 54% of the mobile phone markets. As far as the mobile phone market is concerned, the authority has lost a share of nearly 23% in eight years.
Georgiades said that there should not be any concern over the future shareholding structure of the organisation as there are ways to ensure that the state will remain in control.
Georgiades reminded MPs that bills pending discussion in Parliament foresee that the state will retain the majority of shares in the successor company that will be created.
The partial privatisation of Cyta is on the list of reforms promoted by the government, along with other similar projects such as the commercial exploitation and development of the Larnaca port and Marina with a deal with a strategic investor which is expected to be finalised in November.
Meanwhile, documents accompanying the budget’s submission to the House include reference to plans for the privatisation of the Cyprus Stock Exchange and the activities of the state lottery.