New-generation products, high-end networks and advanced satellite communications are paving the way for Cyprus to successfully build a dynamic digital future and to ensure its status as a convenient regional communications base of strategic importance.
As an international services hub and an attractive investment destination, Cyprus is keenly aware of the importance of keeping up with cutting-edge communications technology to support its thriving business environment. The island’s strategic geographical location, its established framework for technology and research initiatives, and skilled workforce are all part of the equation to upgrade its telecoms landscape in line with the EU 2020 Digital Agenda and to ensure Cyprus is prepared to face the future.
The country and key players in the sector have been working hard to diversify beyond the traditional telco products and to explore more value-added services to help create alternative revenue streams by providing competitive, new-generation products and modern integrated digital solutions. Today, Cyprus’ communication offering is being strengthened by high-end mobile networks, advanced satellite systems, fixed broadband via fibre connections and through the development of innovative digital services related to the Internet of Things (IoT).
The island already has a fully digital network with reliable high-speed international connectivity via eight fibre-optic submarine cables, including the world’s longest optical submarine telecommunications cable, SEA-MEWE-3, which links directly with Southeast Asia, the Middle East and Western Europe. Cyprus also has dedicated fibre links to major international Points of Presence and Connectivity, ensuring all the right connections are in place.
The New Frontier: Space
Cyprus’ climate and geographical location offer optimal conditions for satellite communications as well as access to the geostationary arc from the Atlantic to the Indian Ocean – and being in the most south-eastern part of Europe, Cyprus can also ‘see’ satellites located above Asia and Australia and gather data where other European ground stations have no communication. This has resulted in multimillion investments into Cyprus from satellite companies, which has supported the creation of an extensive and growing satellite network, as well as teleport sites and major satellite earth stations, to supplement the country’s efficient fibre-optic connections and provide integrated solutions for a reliable worldwide 24/7 connection.
A key player in the fibre-optic cable and satellite networks is Cytaglobal, which is a semi-autonomous Strategic Business Unit under state-owned operator Cyta and specialises in providing global electronic communication products and services. Through its global network, Cytaglobal also provides a wide range of international telecommunications products.
Another major player in satellite services is Greek-Cypriot consortium Hellas Sat, which was formed in 2001. This agreement helped put Cyprus on the global satellite map and was an important step in strengthening the country’s position as a successful regional satellite communications centre. In February 2019, the company successfully launched its third satellite into orbit, Hellas Sat 4, on board Arianespace’s first launch of the year from the Spaceport in French Guiana.
The launch started a new chapter in the space history of Cyprus and Greece with its mission to provide innovative satellite services and expand the operations of Hellas Sat in Europe, the Middle East and Africa – which will bring further geopolitical, technological and commercial benefits to both countries. The new satellite will extend capacity and geographical reach to meet the growing demand for applications that include video, internet and mobile phone services, maritime connectivity, cellular backhaul, corporate networks and government services.
It is also the most advanced commercial communications satellite ever built by Lockheed Martin and constitutes another milestone for Cyprus as the satellite is marked with the Cypriot flag and is positioned in airspace allocated to Cyprus and Greece by the International Telecommunications Union (ITU).
Cyprus has been gaining ground in the field of space-tech services and has so far granted 10 licences to organisations to launch telecommunication satellites using space that Cyprus has secured through ITU. The number of licences is substantial, as many countries in the world have issued only one license. The country’s economic benefit from these services is expected to multiply as more satellites are launched. This type of activity also boosts the prestige of Cyprus as a country engaged in space technology services, and its strategic advantages are increasingly promoted in a bid to attract infrastructure to Cyprus from the European Space Agency.
The growing sector has also inspired new endeavours on the academic front, such as the Eratothenis Excellence Centre, created by the Cyprus University of Technology in January 2018, to conduct research into space technologies. Its Excelsior project envisions the creation of some 200 new jobs and the placement of Cyprus on the international research and innovation map for space technologies – a move that will benefit the entire region. A Cyprus Astronomy and Space Academy was also inaugurated in 2017 in Nicosia, supported by the government, and boosting the country’s profile in the European space industry.
The launch of more satellites into Cypriot airspace will benefit the country and its economy through the fees paid by companies taking advantage of Cyprus’ airspace and frequencies, and satellites like Hellas Sat 4 will have a supporting role to play in filling the gaps of the ground network once the country rolls out 5G technology.
Mobile and Broadband Coverage
Cyprus’ mobile network currently covers around 97% of the population, which is also paving the way towards the implementation of the country’s 5G network. In terms of high-speed broadband coverage (Next Generation Access Coverage), Cyprus has been performing better than the EU average over the last few years, with high-speed broadband available to almost 90% of households. In addition, a total of 32 Cypriot communities have received EU funding to cover the cost of installing Wi-Fi hotspots in public spaces, including town halls, public libraries, museums, public parks or squares. The WiFi4EU initiative is part of the ambitious overhaul of EU telecoms rules, including new measures to meet Europeans’ growing connectivity needs and to boost Europe’s competitiveness.
As part of the government’s Broadband Plan 2016-2020, the target is to reach 100% coverage and speeds of at least 100Mbps by 2020. Competition among various operators has resulted in a good offering of high-speed and cost-effective broadband access services throughout the island. However, according to a recent European Commission study, prices for mobile broadband in Cyprus are more expensive than the EU average. This is a challenge Cyprus will have to tackle in order to remain competitive and attractive for relocating expats and companies looking to base regional headquarters on the island.
State-owned operator Cyta continues to dominate the market offering a full range of telecommunications services. The second largest operator is MTN, now rebranded epic after it was bought by Monaco Telecom S.A. for €260 million in July 2018. Other key players with a prominent role in the telecoms landscape are Primetel and Cablenet.
Rolling Out 5G
Currently, Cyprus mobile operators offer high-speed 4G broadband mobile access technology and are constantly updating and evolving their networks, as well as investing in new technologies. In addition, Cyprus has secured EU structural funds for the deployment of step-change technology, for the roll-out of Fibre-To-The-Home (FTTH) networks. By 2020, FTTH networks are expected to extend to every private residence.
Preparations for official 5G licensing have begun and are expected to be completed in the last quarter of 2019, with the entire process expected to finish by 2020, a goal set by the EU. Meanwhile, telecom companies Cyta, epic, and Primetel have been licensed to run pilot 5G programs. The 5G network is expected to have 10 to 100 times higher data transmission rates than today’s networks, 1,000 times more data volume, five times lower network delay, optimised battery life of connected devices and significantly improved geographical coverage.
The government has launched a Broadband Subsidy Grant Scheme to encourage investment in high-speed networks. For companies to participate in the grant scheme, they must provide at least one product with a connection speed of at least 100Mbps.
Strategic collaborations have also been a key element in the race to develop cutting-edge services in Cyprus. For example, epic and Chinese giant Huawei signed a cooperation agreement in 2019 to develop a 5G network in Cyprus – first through a joint research programme and future plans to offer a set of commercial services. This cooperation will help the company take a bold step into the advanced global 5G ecosystem and allow it to play a part in the national strategy to upgrade the country’s role and contribution to telecoms across the entire region. Commenting on the deal with the Cypriot operator, Huawei said it was clear that European markets are first and foremost focusing on the development of an advanced technology, aiming to meet the needs of the new era.
However, some telecom experts have raised doubts whether the target 2020 deadline can be met citing that the market and providers are not ready for the upgraded mobile technology, as there is not sufficient infrastructure, standards or end-devices to support 5G. Another challenge could arise from the current controversy between Huawei and the US if it results in limitations on the Chinese firm’s product promotion, as this could delay 5G implementation in Cyprus and the rest of Europe.
This could be a particular blow for Cyprus, as at the moment more than 90% of local consumers in Cyprus are served in one way or another by Huawei products. The Chinese tech giant has a 10-year presence in Cyprus and has developed extensive partnerships with all telecom providers in the country to provide high-level IT and communications services – and is the only company which produces equipment for all stages of implementing 5G technologies.
A Digital Future
Cyprus has been on a stable path to economic growth over the last few years, a trend that is also visible in the government’s focus on creating a more efficient communications landscape. Developing digital policies that attract further investment are opening new doors to take advantage of the numerous economic opportunities provided by the dynamic digital era. Global demand for bandwidth is growing at an incredible pace, with key drivers being the rise in cloud computing, data transfer and storage, as well as the Internet of Things (IoT). Also, global data centre IP traffic is set to grow threefold over the next four years, as more companies begin utilising data centres to cut costs and streamline work flows.
This in turn will increase the demand on networks to ensure seamless and secure transfers between data centres and business locations. With its infrastructure and talent pool, the country is well-placed to boost its competitiveness and realise its vision of a digital future if it stays on track and keeps up with the rapid evolution of the global communication and tech industry. Cyprus has already successfully capitalised on its location at the crossroads of Europe, Asia and Africa, and can continue to strengthen its role as a convenient regional communications base of strategic importance.
For more information, contact Cyprus' investment promotion agency, Invest Cyprus.
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