Concerns emerge over Cyta restructuring contract

18 Sep 2014

The Watchdog Committee of Cyprus’ House of Representatives has reportedly demanded more information regarding the Cyprus Telecommunications Authority (Cyta) board’s decision to choose German company Detecon International to conduct a study into the telco’s organisational structure, the Cyprus Mail reports. Detecon, which is partly owned by telecoms giant Deutsche Telekom (DT), will be tasked with Cyta’s organisational restructuring prior to its forthcoming privatisation. However, Aristos Damianou of the Progressive Party of the Working People (Anorthotiko Komma Ergazomenou Laou, or AKEL) has pointed out that choosing Detecon to oversee CyTA’s re-structuring ‘is a possible scandal and a conflict of interest’, as DT had previously expressed interest in acquiring Cyta in the event of its privatisation.

Meanwhile, Cyta spokesperson Lefteris Christou has justified the decision to choose Detecon by saying: ‘We were looking for a company that has done this kind of work before. We needed someone with extensive experience in the telecommunications field,’ adding that it was not the first time that Cyta has partnered Detecon to improve its organisational structure: ‘We had a similar deal back in 2007. Detecon came up with suggestions for our organisational structure which were implemented successfully.’

As previously reported by TeleGeography’s CommsUpdate, the Memorandum of Understanding (MoU) signed between the Cypriot authorities and the European Commission (EC), the European Central Bank (ECB) and the International Monetary Fund (IMF) in November 2013, stipulated that the government should present a privatisation plan for a number of state-owned enterprises (SOEs) and semi-governmental organisations (SGOs), including Cyta, by the end of December 2013. The Cypriot government subsequently approved a roadmap for the privatisation process before the deadline expired, and confirmed that the procedure will start in 2016, with Cyta the first company to be privatised. State spokesperson Christos Stylianides clarified that none of the SOEs and SGOs will be 100% privatised, as the government plans to retain a stake in each one.

Cyprus, Cyprus Telecommunications Authority (Cyta), Detecon International, Deutsche Telekom (DT)