Our aim is for CYTA to become a highly competitive business enterprise in this new environment, providing impeccable service to the Cypriot consumer,  while being recognised as a model business in our sector, both inside and outside Cyprus.

CYTA'S PREPARATIONS
CYTA is already preparing at a rapid pace. As part of this essential preparation, we are training our staff, increasing productivity and focusing our attention on the customer. We are making the slogan "Quality in Everything" a way of life.

And that is not all. CYTA is entering the game of modern business activity as a dynamic player, adopting flexible structures and new ways of thinking. We are boldly facing the challenges of the future in an organised fashion, enriching our network and services and rebalancing and adjusting our local call rates which for over ten years had remained fixed well below cost, thus creating the need for enormous cross-subsidisation. At the same time we have lowered international call rates becoming much more competitive.  We have decreased these rates four times in the past three years with levels of reduction approaching 80%.

ΤHE ACHIEVEMENTS OF YEAR 2000
Looking back over last year, one can recognise from CYTA's achievements that we have succeeded in enhancing the image of the Organisation in the eyes of the consumer.

Among the main achievements were the upgrading of the prepaid mobile telephony service under the new brand name "soeasy" to serve a new customer base, the introduction of the CYTAW@P service and our return to retail sales of telecommunications terminal equipment, enabling us to provide total customer service from a single point of sale at our Customer Service Offices.

We have maintained our first place regarding the Internet access service, with the CYTANET products continuing to serve the largest number of customers in Cyprus. At the same time, CYTANET has extended its activities to Lebanon and Syria, serving both Internet Service Providers (ISPs) and businesses.

In 2000 we introduced on a commercial basis ATM/Frame Relay high-speed data transmission services which were quickly taken up and we upgraded the Yellow Pages and Telephone Directory, for which a sales network operated with great commercial success.

A significant change to the Organisation's operations has been brought about by the extension of the servicing hours at Customer Service Offices and the Customer Technical Assistance units in which the staff now have enriched jobs: correcting faults, installing subscriber lines and even providing terminal equipment for the customer's office and home.

There was a dramatic improvement in customer service via the Directory Enquiries 191 and 192 services and the 132 Call Centre.  This improvement was mainly due to the utilisation of part-time staff, the hiring of whom was a result of an excellent cooperation between the unions and management.

THE ROAD TO CORPORATISATION
During 2000 significant steps were taken towards changing CYTA's legal and regulatory framework which will give the Organisation administrative autonomy and business flexibility. The transformation of CYTA from a public corporation into a state-owned company will enable it to proceed with dynamism into a new era.

A draft law has already been submitted to the House of Representatives for the Transfer of Assets and Business of the Cyprus Telecommunications Authority. The basic provisions of the draft law are that CYTA will form a Limited Company (CYTA Ltd) to which all the movable and immovable property, assets, liabilities and business of the present Authority will be transferred.

The Organisation's staff will have the option to choose either to continue their service with the new company (with the right to purchase shares in CYTA Ltd) or choose early retirement with a compensation package or to continue their service with the Authority (without the right to purchase shares). In any case, the jobs, duties, rights and terms of employment are secured, in accordance with current regulations and collective agreements.

Of particular significance was the parliamentary approval in April of 2001 of the Law on the Appointment, Powers, Establishment and Operation of the Office of the Commissioner of Telecommunications and Posts. The Law, which came into force on May 4, 2001 will lead to the appointment of a Commissioner of Telecommunications and Posts and the establishment of the Commissioner's Office.

The Commissioner will be responsible, inter alia, for granting, revoking and modifying general and individual licences for telecommunications services and networks, for setting the framework for charges, for administering the national numbering scheme and for advising the Minister of Communications and Works on telecommunications issues.

While the Law has come into effect, certain provisions related to the powers and duties of the Commissioner will not be effected until January 2003. The Law abolishes all CYTA's regulatory authorities and assigns them to the Commissioner.

The developments and challenges of this new era that is emerging are moving at dizzying speed. In the sector of telecommunications in particular, where technology plays a leading role, tomorrow is never very far away. The future is increasingly merging with the present.

This is why CYTA is not complacent. Now, more than ever, we are aware that we have to stay ahead of developments. Yesterday's achievements form the basis which will bring even greater success tomorrow. Our excellent staff, our superb network and the modern services we provide are the guarantee that CYTA will maintain its dynamism in the new telecommunications environment.

Stathis Papadakis, Chairman
Nikosia, June 20, 2001

The Information Society also affects the business model, as we know it today, creating new business conditions. Liberalisation of the market has created a dynamic and competitive environment, while at the same time the consumer is growing more demanding and exhibiting ever-increasing needs. In the new environment, inflexible and slow-moving state or private enterprises and organisations have no hope of survival.

Success depends entirely on the degree to which an enterprise can adapt to the new situation. The demands of the new era require a constant technological and qualitative upgrading of the products and services offered to customers, as well as greater flexibility so that the business can adapt to the constantly changing competitive environment.

THE MODERN BUSINESS
We, at CYTA, have listened to the signals of the times and in recent years we have begun the process of adapting to the new situation. Today's challenge is that of the future of us all. For this reason we, too, are facing it boldly, with determination and in a systematic and organised way. We are proceeding with dynamism, only looking ahead. We are changing our structures and our mindset. We are becoming flexible, we are increasing productivity, we are becoming extrovert and customer-oriented.

Our objective is clear: to become a modern and competitive corporation in the new competitive environment, a model company in our sector. Only in this way will we win the battle of competition.

A PRODUCTIVE YEAR
Looking back over 2000, one may discern with certainty the significant progress we have achieved. By raising productivity and increasing the number of new services we offer, CYTA has succeeded in making drastic cuts to its international telephone rates while achieving better financial results over the previous year.

Implementing a Balanced Scorecard and self assessment using the Excellence Model of the European Foundation for Quality Management (EFQM), we took significant steps forward in those business areas which determine our medium and long term strategic health:

• in the provision of new services and products and in customer service
  
• in improving working conditions, personnel competencies and job satisfaction
  
• in our social contribution
  
• in improving our business processes
  
• in better utilising our human and non-human resources
  
• in our strategy and procedures
  
• and in the quality of our leadership and management at all levels.
  

Market research has shown that while Cypriot consumers are becoming more and more demanding, we have managed to satisfy them to a greater degree than ever before. This is due, to a great extent, to the fact that we are continuously redesigning and improving the way in which we carry out our work, laying great emphasis on effectiveness, efficiency, quality and, above all, on customer needs and demands.

OUR BUSINESS PLAN FOR 2001
We are proceeding methodically with the implementation of our ambitious business plan for 2001, building on the foundations laid in previous years.

Our business plan has set ambitious goals including

• the enhancement of our GSM mobile telephony service with the introduction of GPRS and a mobile portal,
  
• offering total solutions that include structured cabling and modern customer premise terminal equipment
  
• enriching our broadband services portfolio to serve the needs of both business and residential users
  
• introducing a variety of Intelligent Network services
  
• transforming our mainly circuit switched core network to a packet switched one and
  
• offering superior customer service.
  

Another basic focus of our business plan is the further development of value added services including the provision of enriched content, distance learning, tele-medicine and e-commerce.

Our objective is to be omnipresent, catering for and satisfying all our customers’ needs in electronic communication.

AN INTERNATIONAL PERSPECTIVE
CYTA is today on a dynamic course. The abolition of its monopoly status, the liberalisation of the market and the banning of cross-subsidies are imminent. These changes will lead to losses in market share and revenue. Consequently, CYTA has an obligation to find alternative sources of income by offering new products and becoming active in new markets. At the same time, we must create the conditions that will enable us to maintain as much as possible of our current customer base. All of these factors create the need for alliances and partnerships both locally and abroad in order to achieve economies of scale as well as enhance our know-how and competencies.

This is why, on the international level, CYTA’s strategy aims at

• strengthening its position in the Eastern Mediterranean where it operates as a regional telecommunications hub,
  
• continuing its active participation in Mediterranean submarine fibre optic cable systems,
  
• providing international turnaround services and
  
• developing itself into an active telecommunications player in the Commonwealth of Independent States (CIS), the Balkans and the Middle East.
  

Year 2000 saw the continuation of the operations of the subsidiary company IRIS Gateway Satellite Services (GSS) Ltd, which mainly provides turnaround satellite services between Western Europe and the Far East. CYTA and a British company each have a 50% stake in IRIS GSS.

In January 2001, CYTA and a major Chinese manufacturer of high-tech telecommunications equipment jointly established BesTel Communications Ltd in Cyprus, which will promote and sell solutions in the telecommunications sector and the management and operation of telecommunications networks. The new subsidiary signals CYTA’s entry into a completely new business sector in a market of over 50 million people.  In parallel, another company has been jointly established together with a high tech telecommunications software company with the objective of offering specialised solutions to network operators.

In May 2001, CYTA and OTE of Greece signed a Memorandum of Understanding. This collaboration concerns the laying and maintenance of submarine fibre optic cable systems in the Eastern Mediterranean and the undertaking of major projects in the Balkans and in Central and Eastern Europe.  It aims at creating economies of scale and a new telecommunications balance in the region, since both Greece and Cyprus are already strategically placed: Greece for the Balkans and Cyprus for the Middle East.

OUR VISION
Our vision is to transform CYTA into the most competitive enterprise in Cyprus – so as

• to provide impeccable service to the Cypriot customer,
  
• to continue to provide the country with a modern electronic communications infrastructure which will enable Cyprus to become a prosperous Information and Knowledge Society in an acutely competitive, globalised environment,
  
• to be viewed as a model business in our sector both inside and outside Cyprus and to make a substantial contribution to the creation of a modern, European Cyprus.
  

Nicos M. Timotheou, General Manager
Nicosia, June 20, 2001