BUSINESS

Access to the Internet remains too expensive in Greece despite recent connection price cuts by service providers

By Yiannis Elafros - Kathimerini

OTE and the rest of the Internet providers are offering price cuts for «fast Internet» (DSL and ADSL) connections. These offers, however, are inconsequential; ADSL remains inordinately expensive, making broadband connections a luxury for the great majority of Greeks. At a time when Europe is embracing broadband Internet at high speed, Greece is limping way behind, despite the government's announcements about spreading the information society across the country. OTE has already announced it will «reduce prices for its DSL connections from 20-49 percent,» starting tomorrow. Other companies have been forced to follow. OTEnet, the OTE subsidiary that provides Internet access, sells the OnDSL Kit 384 - a package which contains the necessary hardware plus access at 384 kilobits per second (kbps). The price is 109 euros for the hardware plus a two-month connection. After the end of that period, however, the cost escalates to 46.80 euros per month. If one wants to connect at the fastest speed offered by OTEnet - 1024 kbps - the price shoots up to 149.15 euros. FORTHnet is offering ADSL in a Box Plus (hardware, the connection fee for a new line plus a four-month subscription at a 384 kbps connection speed) for 199 euros. Hellas On Line offers a 384 kbps connection at 47 euros per month plus some offerings. Tellas has similar offers. Be warned, however, that the above prices do not include 19 percent Value Added Tax. Even after these offers, the cost of a DSL line is several times that of several foreign countries. A group of 2,000 citizens, which sent letters complaining about the situation to OTE and the Transport and Communications Ministry, conducted market research and found that the price of a one-month subscription at a speed of 1024 kbps was, in May 2005, the following: 1.50 euros in France, 2.98 in Japan, 4.99 in Italy, 5.30 in Sweden, 5.51 in the UK, 11.97 in Belgium, 16.48 in the Netherlands, 16.67 in Poland, 19.95 in Germany, 41.05 in the Czech Republic, 60.75 in Croatia, 86.05 in Turkey and 149.15 in Greece. One would think that, in Greece, the telephone lines are not made of copper but of gold. What is the reason for this enormous disparity? First of all, the fact that OTE enjoys a quasi-monopolistic position in the market. As a result, it has been squeezing consumers, especially those who try the technology first, in order to make them pay for its investment in broadband Internet and for certain commercial reasons: for example, it had delayed offering ADSL connections in the past in order to market its slower ISDN connections. Privileged OTE Almost all its competitors - with the exception of Vivodi, which has been developing its own network - are using OTE's network, thus saving on investment expenditure but being saddled with line-leasing fees. Internet users also pay OTE for their connection with another provider, plus fixed charges. It's no wonder that the number of DSL connections in Greece has remained below 100,000, less than 0.7 percent of the population, while the average in the 15 «old» EU members - excluding the 10 newcomers, who joined last year - is over 12 percent, according to European Commission data. Overall, Internet connectivity remains very low in Greece. In 2004, only 18 percent of households were connected (up from 14 percent in 2003) compared to 39 percent in the 15 old EU member states. Surveys show that the main reason is lack of knowledge and training (41 percent) followed by connection costs (21 percent). «This game of multiple fixed charges and multiple pricing levels must stop. Internet connection must have a single cost,» says Nikos Vassilakis, president of the Association of Greek Internet Users (www.eexi.gr). Internet is not just DSL and other broadband networks. There are also the slower PSTN and ISDN connections, used by the vast majority of Internet users. «Here there has been neither a drop in prices nor an upgrade in services offered. These users are taken for granted. Anyway, all providers are focused on broadband, where added value is enormous,» Vassilakos says. The government's plan to offer cheap Internet access to university students has not been implemented because of a scuffle about which provider will undertake it. Initially, the providers attempted to limit access by providing charges for time and download volume. The uproar forced them to abandon that part of their proposal.

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