Ri­vals MTN and PrimeTel fail to cap­i­talise on 4G - Con­tract wins vs pre-paid

Financial Mirror (Cyprus) - - FRONT PAGE -

State-owned Cyta, the telco that should have headed for pri­vati­sa­tion within the next three years, has been steadily los­ing mar­ket share to its ri­val mo­bile phone op­er­a­tors, who, nev­er­the­less, failed to cap­i­talise on the launch of high-speed 4G tele­phony ear­lier this year.

The to­tal num­ber of mo­bile phone sub­scribers con­tin­ued to de­cline in the first half of 2015, to its low­est level since the sec­ond half of 2011, down 14,385 to 1,096,417 from June last year. The fall is mainly at­trib­uted to the eco­nomic cri­sis with sub­scribers can­celling more pre-paid lines than monthly con­tracts.

In­ter­est­ingly, the pre-paid mar­ket is at its low­est level of the past six years, while con­tract sub­scriber lev­els are at their high­est of the past six years. The turn­ing point was the end of De­cem­ber 2013, when both ser­vices were tied, with pre-paid mo­bile tele­phony be­ing the dom­i­nant be­fore that.

With Cyta’s mar­ket share at 63.85%, the once for­mer state monopoly had a to­tal of 700,062 sub­scribers at the end of June, los­ing 32,778 sub­scribers in a year. This sug­gests that its gam­ble to de­lay its na­tion­wide trans­mis­sion of the 4G plat­form to the end of the year may pay off as the thresh­old 700,000 sub­scriber mark must be main­tained if it wants to re­tain value and be at­trac­tive to new in­vestors.

Al­ready, since Oc­to­ber, Cyta had been se­lec­tively up­grad­ing sub­scribers and ge­o­graph­i­cal ar­eas to test its na­tional re­cep­tion, with the telco an­nounc­ing that it was na­tion­wide re­cep­tion as of Novem­ber.

In an ef­fort to boost rev­enues, Cyta has been pri­ori­tis­ing cor­po­rate cus­tomers at the ex­pense of or­di­nary users, but

offering this will never bring down the huge pay­roll, as an­a­lysts sug­gest that the state-owned telco’s 2,000 staff makes it “hugely over­sub­scribed” with lower out­put than its ri­vals.

MTN, whose CEO had pub­licly chal­lenged Cyta some two years back, claim­ing the South African net­work would reach a 50% mar­ket share, too, has missed its mark.

In April, it launched a ma­jor cam­paign em­ploy­ing For­mula rac­ing driver Tio El­li­nas, say­ing in its ad­verts at the

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