OTE appeared to backtrack yesterday on its decision to raise Internet connection rates by up to 500 percent after a storm of protest hit the telecom giant from politicians and consumers that labeled the move as illegal and an abuse of power.

OTE, the country's largest phone company, said on Tuesday that its EPAK connection charges, which offer users Internet access via a regular phone line, will increase 75 percent during the day and 500 percent for those wishing to surf at night.

In a bid to justify the price hike, OTE said yesterday that it has not upped its EPAK prices since 1999, when the service was first introduced.

«However, OTE, in cooperation with the telecoms regulator, is examining the gradual application of new prices,» OTE pointed out.

The price hike requires a green light from telecom regulator EETT, the National Post and Telecommunications Commission, which disapproved of the move yesterday.

«The sudden increase in cost to residents that use EPAK services is not in line with promoting the use of the Internet in Greece,» EETT said.

An estimated 20 percent of households in the country have Internet access, according to Eurostat, the statistical arm of the European Union. The penetration rate is one of the lowest in the EU.

The government has a stake in just over a third of OTE, which is listed on the Athens bourse, but controls the company.

The issue has created a political headache for the ruling conservatives, who have stressed in the past that their policies aim at increasing Internet usage.

Among the protests voiced this week about the price hikes were parliamentary deputies from within New Democracy's own political trenches.

Sources said yesterday that OTE's move was made without the consent of any ministers.

On the other hand, the extent of the government's possible involvement in OTE's pricing policy is a source of concern to the large foreign institutional investors who have taken positions in the telecoms company.