Homework 1: Greece

Angelica Lindström angli@kth.se

Introduction
The greek telecom market is regulated by one organization named Εθνική Επιτροπή
Τηλεπικοινωνιών και Ταχυδρομείων (EETT)[8] or the Hellenic Telecommunications and Post
Commission. The EETT is a state agency with the purpose of maintaining quality
telecommunication and postal services at affordable prices in Greece. To accomplish this
they encourage competition and investments in new technology[12]. It is part of EETT’s
purview to award or auction licences to start operating a given telecommunications
infrastructure and since 2000 holds auctions of spectrum[11][14].

The history of the greek telecommunications market begins with a state monopoly, the
market was liberalized in bits and pieces, with fixed line telephony being last to be released
in 2001 from the former state monopoly[13]. Given this it is my opinion that EETT’s role as a
market regulator predominantly lies in ensuring that the former state of monopoly does not
reassert itself.
General statistics
According to to the EETT market review 2014 Broadband penetration is estimated to be
28.7% of the population with broadband connections in Greece fall short of EU average by
2.4 connections per 100 residents. The average nominal speed of ADSL connections
reached 17Mbps in 2014 [11]. In 2014 the number of mobile telephony connections
amounted to 15.6 millions and active the number of active subscriptions was 12.3 million and
fourth generation networks (4G) reached 70% of the population in 2014 compared to 55% in
2013 [11].
Mobile network operators
According to EETT’s market review in 2014 the greek telecommunications market have
three main MNO’s Cosmote, Vodafone Greece and WIND Hellas[11]. According to that same
review the market shares were distributed in the following way:
Cosmote’s share in the total number of mobile connections in December 2014 was 44.6%
according to the EETT market review, which was a decrease previous year's report stated
45.6%. Vodafone Greece’s share of mobile connections increased to 30.4% from 29%
according to the EETT market review 2014. and WIND Hellas’ share dropped from 25.4% to
24.8% from 2013 to 2014 [11].

Cosmote; the largest mobile network operator/provider in Greece[1][2]. Cosmote is a fully

owned subsidiary of the OTE group, the former greek telecom state monopoly. The Greek
state still holds 10% of the share capital but the largest shareholders is Deutsche Telekom[3]
with 40% of the share capital. OTE group has a full range of telecom services with Cosmote
the subsidiary holding mobile networks[2]. The Cosmote 3G network covers more than 98%
of the greek population, in regards to the company's economic situation the Cosmote
website company profile states that:
“For 2015, the Group announced turnover of €3.902,9 mn, at about the same level as last
year. The Pro forma EBITDA reached €1.343 mn. and the Pro forma EBITDA margin at
34,4%. The level of free cash flow was in target with €507 mn.”

They also state that the group have reduced their net debt by 80% and so claim to be one of
the most robust telecommunications providers in Europe[2].

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The group reports their customer base in 2015 to have been:

● Fixed access line connections: 2,69 mn

● Fixed broadband active retail subscribers: 1,50 mn
● Mobile communications subscribers: 7.39 mn (Greece)
● Mobile communications subscribers: 14.88 mn (SE Europe)

Vodafone Greece; second largest mobile network operator in Greece and a part of the
telecommunications company Vodafone from the United Kingdom. Vodafone is globally
ranked 5th in revenue and 2nd in subscribers as of 2014 [4]. The VODAFONE group holds
99.878% of the Vodafone Greece Vshare capital, the rest is free floating [5]. According to
news site TeleGeography in 2014 the greek branch economics was [6]:

“ EBITDA for the same six months in 2014 was EUR76 million, down from EUR84 million
year-on-year, whilst CAPEX remained the same at EUR29 million.”
and the Vodafone Greece customer base consisted of [6]:

● Mobile communications subscribers: 5.02 mn (Greece)

● Fixed broadband active retail subscribers: 19,000

WIND Hellas; third largest mobile network operator in Greece, creditors took over the
company in 2010 and despite investment the subscriber base continues to shrink [7]
Customer base: Mobile communications subscribers and fixed broadband active retail
subscribers: 4 mn [7]

MVNO’s
According to the research website Telecompaper there are currently 11 MVNO’s active in the
greek telecom market. Of these 3 uses Cosmote infrastructure, 4 uses Vodafone Greece
infrastructure and 4 uses WIND Hellas infrastructure[15]. All but one of these, Cyta
Hellas[16], focuses solely on prepaid agreements[15].

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Spectrum

Figure 1: Spectrum allocation in Greece. Retrieved from

http://www.spectrummonitoring.com/frequencies/#Greece

Challenges
I can see two main challenges for the Greek telecom market:
Firstly; Greece has been having a shaky economic situation and in an economic recession
user buying capacity may become limited and so may lower the revenues for the entire
market. Which in turn limits capex and so may hinder the adoption of new technology and
the future development of the greek telecommunication market.

This is unfortunately not something that is easily fixed as it is a country wide problem and
not, in my opinion, something even a company dominating the market can avoid. The
adoption of technology may have to slow down until the greek economy is stable again,
doing so may allow the operators to break even while still providing functioning services that
the user can afford.

Secondly, but perhaps not a secondary challenge is that the greek telecom market is
approaching a duopoly. With the third largest mobile networks operator WIND Hellas losing
ground, Cosmote, with support from Deutsche Telekom, and Vodafone Greece are the only
real contenders left, which, In my opinion, makes for a largely uncompetitive market. This is
a problem as it may slow down the development and adoption of new technology in Greece
and may also affect users with increased prices for the same services.
This situation is very much not supported by EETT, as they strongly encourage competition,
and as of 2014 annual report EETT designated OTE/Cosmote a significant market power
(SMP) and has consequently imposed the regulatory obligations [10].

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In my opinion this may or may not help. It might prevent the situation to degrade into a
monopoly again but will it prevent a duopoly? From my perspective that depends on how
many competing mobile operators the greek population buying capacity is capable of
supporting, even with the prices driven down from competition. There is only so much prices
can be driven down and still hold the enterprises profitable without compromising opex, even
with support from the likes of Deutsche telekom or the Vodafone group. WIND hellas and
other smaller competitors without international support would have an even more difficult
time.

References
[1] Lancaster, H. (2015-10-14). “Greece - Telecoms Infrastructure, Operators, Regulations - Statistics
and Analyses” Retrieved 2016-11-03 from https://www.budde.com.au/Research/Greece-Telecoms-
Infrastructure-Operators-Regulations-Statistics-and-Analyses
[2] OTE/Cosmote. (n.a). “Company Profile”. Retrived 2016-11-03 from
https://www.cosmote.gr/fixed/en/corporate/company/who-we-are/profile
[3] Deutsche telekom. (n.a). “Deutsche Telekom”. Retrieved 2016-11-03 from
https://www.telekom.com/en
[4] GSMA Intelligence (2014-09-19). Retrieved 2016-11-03 from "GSMA Intelligence — Research —
Operator group ranking, Q2 2014".
[5] Vodafone group, (n.a). “Organizational structure”. Retrieved 2016-11-03 from
http://www.vodafone.gr/portal/client/cms/viewCmsPage.action?pageId=1591&request_locale=en
[6] “Vodafone Greece mobile subscribers surpass five million”. Retrieved 2016-11-03 from
https://www.telegeography.com/products/commsupdate/articles/2014/11/13/vodafone-greece-mobile-
subscribers-surpass-five-million/
[7] Maxwell,R. (2015-06-21). “What might happen to mobile service in Greece should there be default
against IMF, ECB, and debt”. Retrieved 2016-11-03 from http://www.phonearena.com/news/What-
might-happen-to-mobile-service-in-Greece-should-there-be-default-against-IMF-ECB-and-
debt_id70682
[8] EETT. (n.a). “EETT”. Retrieved 2016-11-03 from
http://www.eett.gr/opencms/opencms/EETT_EN/index.html
[9] PTS. (n.a). “PTS”. Retrived 2016-11-03 from https://www.pts.se/en-GB/
[10] EETT. (2015). “Annual report 2015”. Retrieved 2016-11-03 from
http://www.eett.gr/opencms/export/sites/default/EETT_EN/Publications/Proceedings/PDFs/2015.pdf
[11] EETT. (2014). “Market review 2014”. Retrieved 2016-11-03 from
http://www.eett.gr/opencms/export/sites/default/EETT_EN/Journalists/MarketAnalysis/MarketReview/
PDFs/2014.pdf
[12] EETT. (2014). “About EETT”. Retrieved 2016-11-15 from
http://www.eett.gr/opencms/opencms/EETT_EN/EETT/AboutEETT/
[13] Dimitrios K. Lymberopoulos. (n.a). “Telecommunications”. Retrieved 2016-11-15 from
http://video.minpress.gr/wwwminpress/aboutgreece/aboutgreece_telecommunications.pdf
[14] Haris Geronymakis Dep. Head Spectrum Management Department. (n.a) “Spectrum Auctions in
Greece” Retrieved 2016-11-15 from
http://www.ancom.org.ro/uploads/links_files/RSS_Haris_Geronymakis_EETT.pdf
[15] Telecompaper. (n.a). “MVNO LIST GREECE”. Retrieved 2016-11-15 from
http://www.telecompaper.com/research/mvno-list/greece
[16] CYTA. (2016). “CYTA”. Retrieved 2016-11-15 from https://www.cyta.com.cy/telephony-internet/en