|
 ADDRESS
BY CYTA CHAIRMAN MR STAVROS KREMMOS ON THE OCCASION OF THE PRESENTATION OF THE
ORGANISATION'S 2006
RESULTS
One point, many
services!
Ladies
and Gentlemen,
One Provider for All
Telecommunications Needs
In the Electronic Communications sector, a truly massive upheaval is taking
place on a global scale. In this highly dynamic environment, a decisive role is
now being played by the developing convergence of telecommunications, IT and the
means of communicating. For this reason we now refer to Electronic
Communications and not merely Telecommunications.
In the now liberalised
environment that is the telecommunications market in Cyprus, we operate
seriously, responsibly, consistently and with an awareness of our leading role.
Amid these structural
changes, a pioneering CYTA is building a modern, European Cyprus. Our objective
is to provide substantial assistance as Cyprus develops into an Information and
Knowledge Society, a basic requirement for economic and social prosperity in the
new era.
2006 Financial
Results
CYTA continued to make progress in 2006, with very satisfactory financial
results.
Operating revenue
amounted to £249 million compared to £230 million in 2005, representing an
increase of 8%, while operating expenses remained at around £210 million.
Earnings before
interest, tax, depreciation and amortisation amounted to £93 million, (an EBITDA
margin of 37%, compared with £72 million or 31% in 2005), representing an
increase of 29%.
As a result of our
tariffs policy and subsequent cost management, the
operating profits rose from £18
million or 8% of revenues in 2005 to £40 million or 16% in 2006.
Surplus amounted to £50
million compared to £27,5
million in 2005. The surplus
after tax increased from £18 million in 2005 to £34 million in 2006.
CYTA continued its
development policy with capital expenditure in excess of £54 million. This was
financed entirely by its own funds and constituted 22% of operating revenue.
In the framework of
governing legislation, CYTA transferred to the State from its accumulated
surpluses a dividend of £55 million.
Telecommunications
Environment
The end of CYTA’s monopoly and our participation in the new environment
gives us the opportunity to become even better, to offer more services and to be
judged in a local and international competitive environment.
The organisational
changes that are being promoted today and which require the abandonment of the
vertical division of separate strategic Units and the adoption of their
horizontal unification into new entities, with the main focus on services,
customers, networks, technical support and financial management respectively,
all contribute to maintaining our competitiveness.
Traditionally, CYTA has
provided and continues to provide quality services at low rates compared to the
European Union and other countries. This has been the case for a number of
years, a fact that has been confirmed in related studies by the Organisation of
Economic Cooperation and Development (OECD). Our policy of providing quality
services at the lowest possible prices will continue.
CYTA and Society
For many years CYTA has been reinforcing its activities in the framework of
its Corporate Social Responsibility (CSR), with regard to its environmental,
social and economic responsibilities in their internal and external dimensions.
The internal dimension
of CSR covers issues such as human resource management, health and safety in the
workplace and the management of the environmental effects of the Organisation’s
operations.
In this context, in 2006
we carried out a CSR self-assessment exercise with the help of an external
consultant in accordance with the European Foundation for Quality Management
(EFQM) model for CSR.
One example of the
important social contribution projects carried out during the year under review,
was the continuation of the road safety project with the organisation of
seminars for National Guard conscripts and graduating secondary school students.
Over the past three years, since the start of the project, more than 35.000
soldiers and students have attended these seminars.
Also of great
significance was our financial assistance to the Centre for Preventive
Paediatrics and our participation in the "Sunflower"
project for the prevention and timely diagnosis of cancer.
Other projects were the
free connection of all schools to the Internet and the provision of lower
monthly subscription fees, the CYTA Parks and the football sponsorship
programme. It is worth noting our sponsorship of the national team and the teams
of the 2nd, 3rd and 4th divisions, most of which belong to refugee or rural
clubs.
In 2006 we supported the
Cyprus Olympic Committee in the creation of a multi-use space in the Olympic
Building in Lefkosia (Nicosia), which has been named the CYTA Fair Play Hall.
The greatest
contribution to society by the Organisation’s personnel has been that of life,
in the form of the voluntary and spontaneous donation of blood by more than six
hundred regular donors who make us feel truly proud.
One Organisation,
Many Achievements!
The year under review, like the first half of 2007, was an especially
creative time, full of challenges and successful entrepreneurial moves.
I am very proud to say
that after a long time on the road to business excellence, which culminated the
week of 25-29 June 2007 with on-site monitoring by the experienced assessors of
the European Foundation for Quality Management (EFQM) in Brussels, the Foundation
officially declared that our Organisation be Recognised for Excellence and
placed us in the highest ranking of five stars. It is the first time that such
recognition has been granted to a Cypriot enterprise. Our course towards
business excellence will continue as we strive to obtain the European Excellence
Award.
Another milestone was
the winning by CYTA and its subsidiary Digimed Communications of a project to
develop broadband infrastructures in various regions of Greece with a total
population of approximately one million. The project is co-financed by the 3rd
Community Support Framework and the Greek government and managed by Information
Society SA which belongs to the Greek Ministry of Communications and Transport.
The success of this particular project is crucial as the Organisation considers
that its long, successful experience and its technical know-how in the Cyprus
market will enable it to become a major player in the Greek telecommunications
market. With Digimed we proceeded with the establishment of CYTA Hellas SA
(which was contracted to Information Society SA for the implementation of the
project).
Our presence abroad also
continued through our subsidiaries Actel Ltd in Hungary, CYTA UK Ltd in the UK
and CytaGlobal Hellas SA in Greece.
Our subsidiary companies
in Cyprus - CytaCom
Solutions Ltd, Emporion Plaza Ltd and Iris Gateway Satellite Services Ltd
- were also very active.
Another notable
achievement for CYTA was the agreement concluded with Mediterranean Nautilus Ltd
for the construction of the independent MINERVA submarine cable subsystem
between Cyprus and Italy, with the potential of international expansion towards
Western Europe and the USA. Our consistent policy has been to reinforce the
important role that Cyprus already fulfils as a telecommunications hub in the
Eastern Mediterranean region.
The Cytamobile-Vodafone
portfolio was enhanced with several new services, the most important being
Vodafone Mobile Connect, which provides easy, reliable wireless access via
Cytamobile-Vodafone’s 3G and GPRS networks to the Internet and to corporate
applications, and supports the sending and receiving of e-mail and SMS messages.
Unfortunately, however, the expansion of the GSM mobile telephony access
network was not without obstacles. Our inability to develop new base stations
was due, on the one hand, to delays in legislation on the location of such
stations, with the subsequent inevitable negative reaction from the public and,
on the other hand, to the court verdicts that forced us to demolish a number of
base stations.
CYTANET introduced the
Safe Internet service which permits users, parents in particular, to filter the
online content to which their children have access. Particular focus was given
to the further expansion of the CYTANET Wi-Fi zone with the establishment of new
Hot Spots and the provision of personalised solutions to specific customer
groups such as hotels.
In the broadband
services sector there was a significant increase in our subscriber base and we
expanded to semi-urban and rural areas the geographical coverage of i-choice and
miVision. New channels were added to the basic miVision package, added value
came in the form of LTV and Alpha programmes, live broadcasts were enhanced with
more football, basketball and volleyball matches, the TV-mail and Games on
Demand interactive services were introduced, the film library was enriched with
a large variety of movies and the miFilm channel was upgraded.
During the year under
review we continued to provide quality, personalised service to customers via
all channels of contact, thanks to pioneering systems such as Customer Relations
Management (CRM) and Next Best Offer (NBO).
Another important
development in 2006 was the implementation of innovative human resources
management systems such as Personal Competency Management, Development Centres
and flexible working hours.
The CYTA brand has
particular value in the minds and hearts of Cypriot consumers. Recognising the
true value of its brand, CYTA is working to protect and reinforce it. In 2006,
having completed a significant part of the project to formulate a Communications
and Brand Strategy for the Organisation, we proceeded to introduce important
tools and mechanisms aiming at the promotion of our corporate values.
Our Organisation has
adopted the Principles of Corporate Governance wherever they do not contravene
the laws governing CYTA’s operations, even though we are under no obligation to
do so since CYTA is not listed on the Stock Exchange. We believe that good
Corporate
Governance is crucial to the smooth operation, long term survival and,
more generally, the creation of value for our Organisation. The greatest
benefit, however, is the creation of a climate of trust with all our
stakeholders - owners, customers, personnel, society.
The Research &
Development sector at CYTA has been reinforced by our participation in the share
capital of the research organisation EURESCOM and also by our active involvement
in the activities of the Cyprus Research Promotion Foundation and the European
Union’s 6th and 7th Framework Programmes.
The future of
telecommunications lies in converged services. CYTA’s vision is to create a
totally connected environment with the objective of improving our customers’
quality of life when they are communicating, working or being entertained.
Customers will be able to "move"
between various wireless and wired technologies, choosing the device they want
and using a number of applications. Converged services are divided into basic
communications, personal communications, business communications and
entertainment.
We are delighted to be
proceeding with the introduction of the first converged services which will
become commercially available next December. One such service involves
videotelephony, over and above what is currently provided via mobile phone,
which will offer an improved customer experience since users will be able not
only to hear but to see the person to whom they are talking. We shall also be
providing voice services via the Internet which will enable customers to carry
out up to five simultaneous conversations via a single broadband connection,
offering freedom of movement in the home through cordless telephones and giving
each member of the family their own personal number as well as basic facilities
such as call forwarding.
Legal and regulatory
framework
As an Organisation, we are striving to change CYTA’s existing legal and
regulatory framework so as to have the necessary administrative autonomy and
operational flexibility to respond to the dynamically altered new environment.
Our objective is to be
able to put a fast and efficient decision-making process in place. At the same
time, we wish to implement a transparent monitoring mechanism which will serve
the three pillars of Corporate Governance: objectives, accountability,
supervision.
Ladies and Gentlemen,
At this point, I would like to express warm thanks
to our customers, with whom we have reached the top. We hope to remain deserving
of their expectations by offering them total electronic communications
solutions.
I thank the Minister of Finance, Michalis Sarris,
for his excellent collaboration and the other ministries, the House of
Representatives, organisations and social groups.
I also extend thanks to all our associates, Legal
Advisors, Auditors and those who support us with their specialist knowledge.
Special thanks go to the Auditor-General of the Republic and those who work with
her for their substantial cooperation, and to the Office of the Commissioner of
Electronic Communications and Postal Regulation and the Commission for the
Protection of Competition.
It would be an omission if I were not to thank the
Media and in particular the journalists for the excellent collaboration that we
have enjoyed.
I owe great thanks to Chief Executive Officer Nicos
Timotheou who is retiring with honour, having left his mark on this robust
edifice that we call CYTA. Congratulations are also due to the Organisation’s
management, the unions and my colleagues on the Board for their positive
attitude, high productivity and decisiveness in the execution of their duties.
To close I would like to recall a
great truth. All successful endeavours are team efforts. This is why our
Organisation’s success is due to the continuous and untiring efforts of all our
people - the people who work for CYTA.
Thank you.
Stavros Kremmos
President
10 July 2007
^
top |
