BUSINESS

Ten pct tax on pay TV stopped sector’s growth in its tracks

VANGELIS MANDRAVELIS

TAGS: Business, Taxation

The special tax on pay-TV services introduced last year has damaged what had been one of the country’s few flourishing sectors, to the extent that growth in Greece’s pay-TV market ground to a virtual halt in 2016, posting a negligible increase of 0.2 percent over the 2015 level.

According to figures announced by the country’s two main service providers, OTE (for Cosmote TV) and Forthnet (Nova), the market at the end of 2016 amounted to about 940,000 subscribers. That was up by just 2,000 subscribers from 2015, when the annual rise had come to 79,000 subscribers. In 2014, some 153,000 new subscribers signed up.

Experts attribute this course to households’ financial woes and mainly to the new 10 percent levy on pay-TV bills. As in the case of mobile telephony, the Finance Ministry calculates value-added tax both on service charges and on the levy – which means taxing the tax.

The new tax was imposed almost a year ago, on June 1. However, industry professionals estimate that the measure had affected the pay-TV market’s momentum long before it was actually enforced. For months before last June it had been presented as a certain tax measure in the context of the first bailout review, leaked to the media by the government in February 2016. That inevitably put many households off becoming subscribers and convinced others to end their contracts.

Forthnet head Panos Papadopoulos has made no secret of his concern regarding Nova. Commenting on the 2016 results, he blamed its narrowing subscription base on “the continued recession in the economy” and the 10 percent tax imposed on pay TV, as well as the negative performance of soccer’s Super League, where Nova has invested heavily.

OTE raised its market share to 53 percent in a tough period, earning 55,000 subscribers when Nova lost 54,000. There also are customers of smaller services such as Cyta and Vodafone. Penetration remains low at 24 percent of households.
 

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