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Table of Contents

Market Briefing
Published: October 2011
Pages: 59
Tables: 49
From: GBP 249.00  Buy Now!
Research from: telecomsmarketresearch
Sector: Networks & Infrastructure

This report provides a comprehensive overview of trends and developments in the Greek telecommunications market. The report analyses the mobile, internet, broadband, digital TV and converging media sectors. Subjects include:

• Market and industry analyses, trends and developments;
• Facts, figures and statistics;
• Industry and regulatory issues;
• Infrastructure;
• Major players, revenues, subscribers, ARPU, MoU;
• Internet, VoIP, IPTV;
• Mobile voice and data markets;
• Broadband (FttH, DSL, cable TV, wireless);
• Convergence and digital media;
• Broadband market forecasts for selective years to 2020.

Key developments:

Wind Hellas bankruptcy leads to debt-free player; economic effects on mobile market spending; amended laws reducing SIM card penetration; 2G spectrum to be refarmed for 3G and 4G use; GSM licence auction in 2012 expected to realise up to €360 million; Wind Hellas invests in HSPA+ network upgrade; Cosmoline’s WiMAX licence withdrawn; economic crisis stalls national FttH project; steady rise in digital satellite subscriber base; OTE’s VDSL launch delayed over regulator concerns for competition; six telcos negotiate for national open access FttB network; IPTV market stuck in doldrums; ATHENA submarine cable from Cyprus to Greece nears completion; regulator assesses work programme for 2011; OTE signs three-year wage deal in bid to save cash; operator data to June 2011.

Companies covered in this report include:

Vodafone, Cosmote, Wind Hellas, OTE, On Telecom and ForthNet, Hellas Online

Telecom market feeling the squeeze from economic plight

The ongoing global economic turmoil has exposed fundamental weaknesses in Greece’s economy and economic management, which relied on debt to support GDP growth, resulting in a high debt to GDP ratio. Double-digit fiscal deficits and a lack of political will to implement tough reforms to rein in public spending have triggered catastrophic downgrades to Greece’s credit worthiness, requiring the country to go cap in hand for financial assistance from the EU and IMF. The first loan package of €110 billion required the government to introduce unpopular austerity measures and sell off large holdings, including much of its remaining stake in the incumbent telco OTE, which is now 40% owned by Deutsche Telekom.

Despite the austerity programme, public debt had reached some €350 billion by September 2011. It is expected to account for 150% of GDP by the end of 2011 and 172% by the end of 2012, the highest in Europe. Privatisations should raise €5 billion by the end of 2011, €15 billion by 2013 and €50 billion by 2015, but it appears inevitable that Greece will default on some of its bonds as part of a new bail-out strategy. A new scheme, championed by Germany, would see Greek debt holders swap holdings for new, longer-maturing bonds.

Greece’s telecoms market has not been immune to the effects of the contracting economy, with a number of operators posting falling revenue figures and increased borrowing costs. The market has continued to grow, albeit at slower rates than a few years earlier, particularly during the second half of 2011. Retail competition has driven prices down, exacerbated by a greater number of bundled offers. The broadband sector has been buoyed by an increase use adoption of LLU among altnets though fixed-line broadband penetration remains below the EU average. The mobile sector has high SIM penetration, resulting in slower subscriber growth in recent quarters, yet despite investments by MNOs take-up of high-end data services and mobile broadband remains low.

Despite market liberalisation since 2001, OTE continues to dominate the markets for fixed-line voice, internet and broadband services. However the regulator has become increasingly successful in introducing competition, with local loop unbundling well underway and alternative operators launching competing services.

Greece’s mobile communications market is dominated by Cosmote, Vodafone and Wind Hellas. The bankruptcy of Wind Hellas and its re-emergence in early 2011 under the auspices of a new holding company, Largo Ltd, may lead to the operator’s mobile division being merged with Vodafone. This would create a duopoly of players, with Vodafone commanding at least 53% share of the market by subscribers. MNOs have invested in network upgrades to support HSPA+, though thus far take-up of mobile broadband and high-end data services has been slow. Nevertheless, the impending auction of 900MHz and 1800MHz spectrum, partly resulting from licences due to expire in 2012, will enable licensees to utilise former 2G spectrum for LTE.

In the digital media sector, DTTV continues to develop though there is considerable uncertainty that the 2012 ASO target will be met. This will put back the availability of digital dividend spectrum which has been set aside for mobile broadband use.

Greece– Key telecom parameters – 2010; 2012

Sector	2010	2012 (e)
Subscribers to telecoms services (million):
Fixed broadband subscribers	2.53	3.15
SIM cards in service	18.0	17.8
Mobile broadband	1.7	2.15
Fixed-line telephony	5.8	5.59
Fixed broadband penetration	22.4%	25.6%
Fixed-line telephony penetration	52%	49%
SIM penetration (population)	118%	116%

(Source: BuddeComm)

Key Highlights

• GSM licences due to expire in late 2012 have been put to auction rather than offered for automatic renewal. The move is aimed at generated as much revenue for the government as possible; the price per MHz by population equates to 40 times more than was raised in a similar auction in Germany in 2010. Other spectrum bands to be auctioned will complement existing holdings and allow for improved services for LTE in coming years.
• Although the transition from analogue to digital broadcasting started in late 2008, with an ASO date of early 2013 targeted, delays in licensing procedures and the building of transmission centres means that there is a real potential for the country to slip behind schedule. This will have knock-on effects for the assignment of digital dividend spectrum for other uses, notably mobile broadband which the government requires to meet its commitments to address broadband ‘white spots’ in rural areas.
• The government’s national strategy for fibre access networks, dating to 2008, aimed to build a nationwide open access FttH network providing 40% geographic coverage by the end of 2015 at an estimated cost of €2.1 billion (mostly derived from the private sector). Delays have pushed back delivery to 2018, while the regulator has since facilitated negotiations between six telcos to develop a cheaper national FttB network.

This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in Greece. It provides further information on:

• Market liberalisation and regulatory issues;
• The impact of the global economic crisis;
• Telecoms operators – privatisation, acquisitions, new licences;
• Mobile data market developments in coming years in light of spectrum auctions and new license awards in 2010;
• 3G developments, regulatory issues and technologies including HSPA and LTE;
• Broadband migration to an FttH architecture;
• Historical and current subscriber statistics and forecasts;
• ARPU statistics and forecasts.

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