July 1999

Cyprus Master Report

I - General background

1. General policies

1.1 General media policy

• The market for radio and TV was liberalized in 1990 and 1992 respectively.
• The existing radio and TV stations fall under the jurisdiction of the Minister of Communications and Works. All relevant licenses are issued by the Authority of Radio / television of Cyprus.
• All operating stations need to comply with the code of conduct described in the laws mentioned in the Regulatory Framework section.

1.2 General telecom policy

The market for telecommunications is partially liberalized in the sense that while all voice telephony and mobile communication are monopolized by the Cyprus Telecommunications Authority (CY.T.A.), a state (semi-government) organization, certain services like data transmission, value added services, Internet services provision, and equipment provision are liberalized.

Nevertheless, in line with the relevant European Commission legislation, there is a strong movement headed by the Cyprus government to deregulate CY.T.A., thereby liberalizing the telecommunications market.

2. Institutional structures in charge of the regulatory issues

2.1 Ministry in charge of telecommunication issues

• Media : The number, geographical coverage, broadcasting frequencies and power of radio and TV stations operating in the country, and the licensing of new such stations are under the responsibility of the Ministry of Communications and Works. The latter operates in association with the Authority of Radio / television of Cyprus.

• Telecommunications : The liberalized sectors of the market (data transmission services, value added services, terminal equipment) fall under the jurisdiction of the ministry of commerce and industry.

2.2 National regulatory authority

• Media : The Authority of Radio/television of Cyprus which was established under Law 7(I) of 1998, and amended under Law 88(I) of 1998, article 51. This is an independent authority (managed by 7 board members appointed by the government) aiming among others at : 
  • Issuing, depriving, renewing and modifying relevant licenses ;
  • Supervising the application of the code of conduct by the existing radio and TV stations, and
  • Monitoring the international developments in the field of radio / television in order to suggest whenever appropriate the alteration of the existing legislation.
    
• Telecommunications : There is no regulatory authority in Cyprus. The Telecommunications Service Law grants CY.T.A. the right to exercise some regulatory functions such as numbering and type approval.

2.3 Frequencies allocation authorities

• Media : The Minister of Communications and Works
• Telecommunications : CY.T.A.

2.4 Office for the protection of economic competition

• Media : The Authority of Radio/television of Cyprus
• Telecommunications : Not available

2.5 Consultative councils

• Media : The Authority of Radio/television of Cyprus
• Telecommunications : Not available

2.6 Public communication operator

• Media : Cy.B.C. is currently the sole State media operator in Cyprus. The Corporation maintains two TV channels (RIK 1 and RIK 2), and 3 radio channels (first, second and third program of RIK).

• Telecommunications : CY.T.A. is currently the sole telecommunications provider in Cyprus for voice telephony and mobile communication. CY.T.A. is a semi-government organization, controlled by the State.

3. International relationships and agreements

• Media : Under Law 29(I) of 1992 the programs of Cy.B.C. are broadcasted in Greece, while the programs of the Greek State Television (ET) are broadcasted in Cyprus.

• Telecommunications : CY.T.A. belongs to and uses the services of the International Telecommunications Satellite Organization (INTELSAT), the European Telecommunications Satellite Organization (EUTELSAT), and the International Mobile Communications Satellite Organization (INMARSAT). It also uses other satellite systems such as the Sirius II, and the Russian GORIZONT system which it is also a shareholder in the ICO which will provide mobile satellite communications.

Furthermore, CY.T.A. is planning to create a teleport in Cyprus, in collaboration with the British company Merlin Communications Ltd. The teleport will provide satellite links between Europe and Asia for the relaying of television and radio programs between the two continents.

Finally, CY.T.A. collaborated with MATRA MARCONI SPACE and, through DIGIMED, became part of a multinational team of experts for the execution of a technical / financial study of the European / African Satellite Telecommunications System (EAST).

4. Regulatory framework

4.1 Historical overview

Media : Up until 1990 and 1992, the Cyprus radio and TV environment respectively was characterized by a monopoly situation. The Cyprus Broadcasting Corporation (Cy.B.C.) being the only organization broadcasting radio and TV programs. Cy.B.C. was and still is a semi-government organization, partly funded by the State, and being the state radio and television of Cyprus.

In 1990 and 1992 the market for radio and TV respectively were liberalized under law 120 of 1990 and 205 of 1991 (radio) and under law 29(I) of 1992 (TV) which provided the necessary authority to the Council of Ministers to issue licenses for the establishment and operation of private radio and TV stations which to broadcast on a frequency determined by the International Union of Telecommunications.

Initially, several radio stations were introduced. Subsequently, privately owned open TV stations also entered the market. Currently, there are 4 TV stations broadcasting on a national basis (Cy.B.C., Antenna, Sigma, Logos), 4 local TV stations (Fred, Extra, Paphos, FM), and 2 subscriber (pay) TV stations (LTV, Alpha). Furthermore, there are 5 national radio stations and in excess of 20 local radio stations operating in Cyprus.

Telecommunications : The Telegraphs Law of 1933 (Cap. 305) granted the Council of Ministers the exclusive privilege of controlling the licenses for establishing, constructing, and maintaining telegraphs and telegraph lines. All the relevant licenses should have to be issued by the Minister of Communications and Works.

The Telecommunications Service Law (Cap. 302) of 1954 is a law which established the Cyprus Telecommunications Authority as a public corporate body. The law granted CY.T.A. the performance of all functions relating to the provision and maintenance of telecommunication services. CY.T.A. was granted the exclusive right for the provision of telecommunication services and the operation and maintenance of a telecommunications network including basic infrastructure.

The Wireless Telegraphy Law (Cap. 307) governs the management of the electromagnetic spectrum and establishes the rights and obligations of the Republic and of the frequency users. The scope of the law covers :

• Frequency management activities relating to radio-communications
• the obligations of the persons who deal with these activities, and
• the manufacturing, establishment, installation, importation, use and maintenance of stations or apparatus which emit or receive electromagnetic energy.

4.2 Present general legislation

Media : Under laws 7(I) and 88(I) of 1998, the licenses for the establishment, installation and operation of radio and / or TV stations are issued and reviewed by the "Authority of Radio-Television of Cyprus". All the technical details of the planned stations (number of stations, geographical coverage, broadcasting frequency, power) are determined by the Minister of Communications and Works.

Telecommunications : The basic law governing the telecommunications sector in Cyprus is the Telecommunications Service Law, Cap.302 of 1954. The above law grants CY.T.A. the exclusive right to provide all telecommunications services in Cyprus. The provision of some telecommunications services namely voice telephony, telegraphs, CYTAPAC is governed by Regulations (secondary legislation).

Other laws governing the sector are inter alia the Telegraphs Law Cap.305 (amended), and the Wireless Telephony Law Cap.307 (amended). These laws are accompanied by regulations.

The above legislative measures are not harmonized with the relevant EU Directives.

4.3 Key legislative measures

Media :

Telecommunications :

4.4 Issues

4.4.1 Liberalisation

4.4.2 Licensing

• Media : Issuing, depriving, renewing and modifying radio and TV licenses fall under the responsibility of the Authority of Radio / television of Cyprus

• Telecommunications : No licensing regime for the provision of telecommunications services has been applied in Cyprus.

4.4.3 Universal service

Media : The Cy.B.C. is broadcasting via satellite radio and TV programs in Europe, North Africa, and the Middle East. The satellite used is the SIRIUS II, while the reception frequency is 12 264.52 MHz.

4.4.4 Tariffs policies

Media : Each TV station sets its own tariffs for advertisements, according to the estimated TV level of viewership of the specific program. However, it is known that these tariffs are only used as general guidelines, and that quite often the actual charges deviate considerably.  

4.4.5 Interconnection

Cyprus has direct telephone circuits with 60 telecommunications organizations in 51 countries. It has 42 direct signaling links which serve 154 destination point codes for the purposes of fixed telephony and international roaming for mobile telephony.

At the end of 1998, the total number of telephone circuits stood at 4,386, an increase of 9.8% compared to 1997, while the respective figure for ISDN circuits rose by 28.8% in 1998 reaching 21.

At the same time, 33 new Mbps transit connections were established, taking the total to 144 (an increase of 29.7% as compared to 1997), while the number of international leased circuits increased by 33% in 1998 from 103 to 137.

As far as mobile communications are concerned, CY.T.A. introduced CYTAGSM, a new mobile communications services which eliminates international boundaries in April 1995. CYTAGSM operates through a digital GSM system which provides almost global coverage and a wide range of additional facilities and services.

5. Freedom and protection

All copyright and intellectual property rights are preserved under the general law 59 of 1976 and 249 of 1977.

II - On-going developments

1. On-going developments in institutional structures

Within the context of CY.T.A.’s efforts for network development, the transmission network of CY.T.A. was fully digitized at the end of 1998, while in 1999 the total digitalization of the switched network will be completed (currently, 88% of the switched network is digitized). Furthermore, the third stage of the SDH (Synchronous Digital Hierarchy) network was completed in 1998.

For the introduction of new services, CY.T.A. proceeded with the installation of intelligent network and ATM (\Asynchronous Transfer Mode) network equipment. The installation of the ATM network is expected to be completed during the third quarter of 1999.

The international network was upgraded significantly. One important part is the completion of the LEV submarine fibre optic cable system which links Cyprus, Israel and Italy and the SEA-ME-WE3 intercontinental submarine fibre optic cable system which will start operations during the first half of 1999.

At the same time, CY.T.A. proceeded with the gradual upgrading of the local telephone network management center and a substantial number of local telephone exchanges. Through this upgrading, a developed network infrastructure is created with increased capacity and the capability of providing improved services. Also, the telephone exchanges are being made Year 2000 compliant.

As regards satellite communications, CY.T.A. belongs to and uses the services of the International Telecommunications Satellite Organization (INTELSAT), the European Telecommunications Satellite Organization (EUTELSAT), and the International Mobile Communications Satellite Organization (INMARSAT). It also uses other satellite systems such as Sirius II and the Russian GORIZONT system, while it is a shareholder of ICO which will provide mobile satellite communications. Finally, in 1998, CY.T.A. completed the installation of the satellite earth station which enables the transmission of the CYPRUS-SAT programs via the Sirius II satellite

2. On-going developments in the regulatory framework

2.1 Telecommunication liberalization

2.1.1 Overview

The government of Cyprus has decided to take the necessary measures for drafting a new telecommunications law, and for setting up and operating an independent Regulatory Authority.

Consistent with the above, Cyprus expressed its commitment to comply with the European Union acquis (aiming at ensuring technical compatibility between different systems with the European Commission standards, and at encouraging competition in the sector relating to the liberalization of service provision in the field of telephony, satellite services, mobile phones and subjects relating to the economic supervision of telecommunications and the separation of regulatory from operational functions) by December 31, 2003 (this including a transition period of 1 year).

Cyprus has also asked for the technical assistance of the EU for the implementation of some parts of the acquis so that there is a smooth transition from the present monopolistic situation to full liberalization.

In response, the EU invited Cyprus to give the necessary information to allow for an assessment of the time needed for full liberalization of the telecommunications market. Furthermore, with respect to the request for the transition period, the EU expressed the hope that adequate progress is made so that these requests are reduced or withdrawn.

2.1.2 Policy decisions

On June 10, 1998 and on October 7, 1998, the Council of Ministers adopted decisions concerning the Telecommunications Sector. These decisions referred to the following :

• Immediate separation of the Regulatory and Operational function and responsibilities
• Immediate establishment of a National Regulatory Authority (NRA) with the following functions and responsibilities :
• Type approval of telecommunications equipment ;
• Control of CY.T.A. prices and (at a later stage, following liberalization) control of market prices ;
• Granting of licenses to provide telecommunications services and operate telecommunications equipment ;
• Determination of the rules (technical and financial) governing telecom networks ;

Other competencies which fall within the framework of operation of a National Regulatory Authority (NRA). NRA will, at first, be set up in the directorate of Telecommunications of the Ministry of Communications and Works until further decision is taken.

Consultants will be commissioned to undertake the implementation within a year of the above decisions by the Council of Ministers.

The setting up of a committee composed of representatives of the Ministry of Communications and Works, the Ministry of Finance, the Planning Bureau, the Legal Service of the Republic and the Cyprus Telecommunications Authority, under the chairmanship of the Permanent Secretary of the Ministry of Communications and Works, in order to offer guidance and support to the consultants.

To assign to NRA in cooperation with the consultants, the preparation of a study on the adoption of a revised time-frame for the liberalization of the telecommunications sector.

2.2 New laws under preparation

As described in sub-sections 2.1.1 and 2.1.2 

3. Media and telecommunication markets : privatization, foreign investments, mergers and         acquisitions)

Following a successful bid in an international competition, CY.T.A. undertook the installation of a satellite system for monitoring and maintenance of EUTELSAT’s DAMA system which would provide VSAT satellite communications to Europe, Russia and the Middle East.

CY.T.A. is also moving ahead with the creation of a teleport in Cyprus, in collaboration with the British company Merlin Communications Ltd.

Finally, CY.T.A. collaborated with MATRA MARCONI SPACE and, through DIGIMED, became part of a multinational team of experts for the execution of a technical and financial study of the European African Satellite Communications System (EAST).