European Commission approves 12 million euro Cypriot scheme to support household access to high-speed broadband services

The European Commission announced that it has approved a Cypriot voucher scheme for a total of 12 million euros, to help households have better access to high-speed broadband services, with the aim of fostering digitalisation in the country.

According an announcement, the scheme supports the take-up of broadband services over the existing infrastructure, ensuring a wide availability of high-speed broadband services to citizens.

The scheme will run until 30 June 2025 and will be partially funded via the Resilience and Recovery Facility, following the Commission’s positive assessment of the Cypriot Recovery and Resilience Plan and its adoption by the Council.

The aid will take the form of vouchers to households that do not have a subscription to a connection providing at least 100 megabits per second (Mbps) download speed. The scheme will cover part of the set-up costs and the first 12 months of subscription to broadband services providing at least 200 Mbps download speeds.

The scheme is expected to benefit approximately 82,000 households. All broadband service providers capable of providing the eligible services will be eligible under the measure.

In a statement, Executive Vice-President in charge of competition policy Margrethe Vestager said that the scheme will ensure that citizens can have access to high-speed broadband services.

“This will contribute to the economic development and social cohesion in Cyprus, while ensuring that competition is not unduly distorted” she added.

The Commission assessed the scheme under EU State aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the European Union, which allows Member States to support the development of certain economic activities or of certain economic areas under certain conditions.

The Commission found the scheme to be necessary to address a market failure, namely the slow take-up of eligible broadband services by households in Cyprus. Even though networks able to provide the high-speed broadband services are widely available in Cyprus and despite households’ growing needs, data shows that the take-up of such services by Cypriot households continues to be relatively low, the Commission notes.

According to the assessment, the measure has an incentive effect, since connectivity and access to broadband services would not be facilitated to the same extent in the absence of public support.

Also, it has been found that the scheme has sufficient safeguards to ensure that undue distortions of competition are limited and that the aid does not have undue negative effects on competition and trade in the EU. In particular, the measure is proportionate as it is limited to the minimum necessary and in time. In addition, the scheme is technologically neutral, ensuring equal treatment of broadband services providers capable of providing the eligible services. Furthermore, the measure covers part of the costs of subscribing to new high-speed connections or of upgrading existing connections.

Finally, it is noted that Cyprus carried out a market assessment and a public consultation that show that the design of the measure prevents conferring a disproportionate advantage on one or more specific service providers to the detriment of others, also in the light of the wholesale access obligations provided by the relevant national regulation.

The Cypriot scheme will enter into force the day following its publication in the Official Journal of the European Union, which is expected in January 2023.