The acceleration of the digital transformation of Cyprus is a key axis of Cyta's strategic direction and mission, according to the chairman of the board. of the organization Rena Rouvitha Panou. “This is an extremely big challenge, to which Cyta can respond immediately and successfully, utilizing its advanced technological infrastructure, combined with a high level of specialization and,” Ms. Rouvitha told members of the parliamentary Finance Committee. expertise of its human resources “.
The briefing by the President of Cyta to the Finance Committee took place in the context of the presentation and review of the budget for 2021. Last Thursday, four days after the significant success of Cyta to launch the first 5G network in Cyprus, a development that the On Monday, the Parliament approved the budget of the organization, with 44 positive votes and two abstentions (Ecologists).
Again for privatization
During the debate in the plenary before the Plenary, the interest of the deputies almost once again monopolized the debate on the intention of the government to partially privatize the organization, through the choice of a strategic investor, or to privatize it in full, intentions or thoughts that are categorically rejected by almost all opposition parties.
In the context of the debate on Thursday and according to KYPE, DISY MP Marios Mavridis argued that Cyprus has much higher charges in telecommunications than other countries, because, according to him, Cyta has high costs, resulting in competitors charging slightly lower, making super profits. “This model,” he said, “should not be continued and the market should be completely liberalized, so that consumers can enjoy lower prices.” Dividends, he concluded, “should not be given to the state, but returned to consumers.”
DISY MP Onoufrios Koullas said somewhat differently from Mr. Mavridis, arguing that there was never any talk of privatizing CYTA but of partial privatization, so that only one strategic investor, who will have know-how, would contribute to the modernization and its technological upgrade. He noted, at the same time, that it is this board, appointed by the current government, that did an excellent job at Cyta, closing holes, as was the case with CYTA Hellas, but also regarding the pension fund “.
The opposition is negative
Opposition MPs have expressed their complete opposition to any idea of privatization or privatization. AKEL MP Stefanos Stefanou said that in recent years Cyta has given the state, in the form of dividends or taxes, 850 million euros, while this year the state will receive another 20 million. In addition, he said, the organization is making a costly investment 130 million for the fiber-optic network for the state, something no private organization would do. He also congratulated the parties that stood in the way of the privatization of Cyta, because, as he said, this money would go to the pockets of individuals and not the state and citizens if such a thing happened. From the same party, the parliamentary representative George Loukaidis wondered what would happen if the president of DISY, as Minister of Communications under Glafkos Clerides, then managed to sell Cyta “for a lentil plate”, while noting that the organization not only managed to give 850 million euros to the state, but also gave decent wages to employees.
The vice-president of DIKO Christiana Erotokritou stated that DIKO is not going to consent to the sale of state wealth to anyone the government christens a strategic investor. From DIKO, also the parliamentary representative Panikos Leonidou said that the organization has offered a lot in this place over time and in difficult times gave a helping hand for the development of the state and the improvement of the life of the citizens.
Democratic Forces Cooperation MP Angelos Votsis said that today the competition is working and there are several private companies, while he said that Cyta should be supported, in order to make moves in the right direction for its modernization and improvement. At the same time, he said, the government should keep in mind that they will support the privatization of Cyta, while he said that strategic investors have entered the ports and now the first to complain about the prices are OEB and the CCCI.
Profitability from 2018 is important
Referring to the deputies of the Finance Committee, the President of Cyta, Rena Rouvitha, said that the forecasts included in the 2021 budget and in the Medium Term Financial Framework 2021-2023, have as a starting point the significant profitability of Cyta at levels over € 60 million after taxes, per year, for the three years 2018-2020. “Despite the uncertainty caused by the pandemic, the excellent performance of recent years allows us to be optimistic, and at the same time proud, of the dynamic course and prospects of the organization,” Ms. Rouvitha added. According to her, the milestone for the course of Cyta's financial results was the year 2018, a year in which net profit exceeded € 60 million, a level much higher than the corresponding results of previous years. This development was, to a large extent, he said, a result of the rational financial management that was adopted and that led, among other things, to the sale of Cyta Hellas. As a result, Cyta's financial statements have since been exempt from additional impairment losses on investments in foreign subsidiaries. He added that “the positive course of financial results was further strengthened in 2019, a significant year for Cyta, as targeted commercial operations achieved, for the first time in seven years, an annual increase in revenue from services of 2.6%, reversing the downward trend of the previous period. At the same time, the customer retention index in 2019 amounted to 93.5%, which is the highest level of customer retention in recent years and which contributes significantly to the course of revenue. The president of the organization added that for 2020, based on the preliminary financial results, “we find that the positive course continued and strengthened, despite the unprecedented conditions we experienced. The revenues of 2020 are expected to be lower than the revenues of 2019, but they exceed the level of 2018, highlighting their resilience “. According to the 2021 budget, the projected profitability after tax is projected to reach € 39.3 million, increased by € 3 million from the projected profitability in the 2020 budget. The course of the Agency's financial results is expected to increase for the years 2022 and 2023, according to Rena Rouvitha.
Revenue – expenditure for 2021
Revenues from services in the 2021 budget are projected at € 352 million, ie at approximately the same levels as the realized revenues of 2019, increased by € 9 million compared to the revenues in the 2020 budget. A significant part of the revenues is expected to comes from the use of mobile telephony, in parallel with the contribution of fixed telephony, internet and television services. Regarding the levels of total revenues, which include revenues beyond services, the forecast for 2021 amounts to € 357.2 million compared to the corresponding forecast of € 349.1 million for 2020, showing an increase of € 8.0 million
The total expenditure in the budget 2021 is projected at € 422.2 million, compared to the corresponding budgeted expenditure for 2020 of € 419.6 million. He clarified that the term “expenditure”, within the budget, includes the total amount of the planned capital expenditures (98 million) related to the creation of infrastructure in the medium or long term, which are amortized over the long term in the financial statements.
