Southern Cyprus Confirms GSM License Auction Details

Greek Cyprus has said that it will auction off the country's second GSM license by the end of this year, breaking the local monopoly operated by CyTA. Communications Minister Averof Neophytou told reporters "We pledge to begin the auction process in an effective, impartial and transparent manner,"

The process of the auction will begin in November, following a series of beauty contests that will begin in October. The license is expected to be formally awarded by next January. Any company having a financial interest in the Turkish GSM networks, Turkcell or Telsim will be barred from the auction, as those networks are also operating their own GSM network in the Turkey controlled North of the country. "The new entrant should not be taking part in the consortia which illegally operated in occupied Cyprus," said Neophytou. He made no comment though on whether investors in the two Turkish GSM networks, Aycell and Aria that do not operate a network in Northern Cyprus would be allowed to enter the bidding process.

The new license holder will be obliged to provide 50% population coverage in two years and 75% after four years. The new entrant, and incumbent CyTA will also be offered a free 3G license if they commit to a launch within 10 years. The new license will be for 20 years and a duopoly will exist for five years, or until the new entrant achieves a 25% market share, whichever comes sooner. After then, the government says that it may auction a third GSM license.

While the island nation has a resident population of about 690,000 - the actual population surges during the peak tourist season thanks to an annual influx of around 2.5 million visitors, and would bring in substantial international roaming revenues for the the new entrant.'"

Posted to the site on 13th August 2002