Greek telecom market makes small gains after steep decline

15 Dec 2011

Greece is among the countries hardest hit by the Eurozone monetary crisis, and data from TeleGeography’s GlobalComms Database reveal the effects of the sharp downturn on the country’s telecom market. However, recent trends suggest that the embattled Greek telecoms sector is gradually stabilizing.

All three of Greece’s mobile operators, Cosmote, Vodafone, and Wind Hellas, recorded subscriber gains of approximately two percent in Q3 2011. Nevertheless, subscriber numbers remain far below the levels seen in December 2009. Cosmote’s total subscribers remain approximately 15 percent below the levels of December 2009, while Vodafone and Wind Hellas are still 38 percent and 28 percent below their year-end 2009 subscriber tallies, respectively.

According to GlobalComms, Greece had the highest cellular penetration in Western Europe at the end of 2009, with a rate of 186 percent. This figure plummeted to 141 percent at year-end 2010, placing it fifth out of the 20 countries in the region. By Q3 2011, its position slipped to sixth, with penetration of 139 percent. These declines reflected both the falling demand for multiple SIM cards among consumers and businesses in an economic downturn and the removal of significant volumes of pre-paid accounts following a user identity registration scheme. However, after decreasing for five consecutive quarters, mobile subscribers grew in Q2 and Q3 2011, resulting in respective quarterly rises in population penetration of 1.8 and 2.7 percentage points.

Aiming to increase its subscribers in the converged fixed-mobile sphere and become the biggest rival to Cosmote’s parent OTE in all telecoms sectors, Vodafone is seeking to merge with Wind Hellas. A Vodafone/Wind Hellas merger would require EU clearance, as well as approval from local regulatory and anti-monopoly authorities, as it could effectively transform Greece’s telecom market into a duopoly. A formal application is expected to be submitted to the European Commission by the end of 2011.

“The assets that Vodafone would acquire through a merger with Wind Hellas include extensive fixed backbone and local loop unbundling (LLU) broadband access infrastructure,” said TeleGeography analyst Tom Shepherd. “The merged company, in cooperation with Vodafone Greece’s part-owned LLU network operator Hellas Online (HOL), would account for approximately 18 percent of the country’s fixed-line subscribers, 25 percent of broadband subscribers, and 50 percent of mobile subscribers, which translates to an almost 40 percent market share across the three segments. This means that OTE and the Vodafone/Wind Hellas/HOL alliance would control a combined market share close to 94 percent.”

TeleGeography’s GlobalComms Database service is a constantly updated online database of wireless, wireline, and broadband competition.

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