ECONOMY

Communications market still backward

The European Commission’s 10th annual report on electronic communications underscores the primitive development of the Greek market. The report shows that Greece, along with Belgium, the Czech Republic, Estonia and Luxembourg, has yet to adopt primary legislation transposing the EU directives – on framework, access, authorization, universal service and competition – that ensure fair competition in electronic communications markets, as well as the EU directive on e-privacy. «The Commission has launched infringement proceedings for non-notification, and proceedings are pending before the European Court of Justice against Belgium, Greece and Luxembourg.» The three EU aforementioned members had until July 24, 2003 to adopt the directives into national law, with the exception of the e-privacy directive, where the deadline was October 30, 2003. Recent EU entrants the Czech Republic and Estonia had until May 1, 2004. This is why the Commission has given them some leeway in adopting the directives. The report also shows that Greece is dead last in fixed broadband penetration, with just 0.2 broadband lines per 100 inhabitants, when the average in the EU is 6.5 and, among the EU-15, 7.6. «Broadband penetration varies considerably across member states and is generally highest in those countries where viable infrastructure-based competition exists via cable and other alternative networks and via local loop unbundling,» the report says. The last term – local loop unbundling – means, essentially, the provision of access to households by «incumbent» firms, former state-owned monopolies, that is, to competing companies. The report itself remarks that the unbundling is the result of «decisive regulatory action, in particular in terms of pricing… and, in certain countries, new entrants are beginning to increase their investment in infrastructure.» In other words, Greece has not taken the necessary action to deregulate its market. The release of the report provided an opportunity for Tellas, a fixed-line service provider partly owned by Public Power Corporation, to attack OTE Telecom, the dominant company and former monopoly, for stifling competition. On average, former fixed-line monopolies in Europe still have a 70 percent market share in their respective countries, including 86.9 percent of the local call market, 72.8 percent of calls from a fixed phone to mobile networks, 71.3 percent of long-distance calls and 64.9 percent of international calls. OTE has an 85 percent market share, including 98 percent of local calls. The Commission has spoken well of the local market regulator, EETT, considering that the latter has blamed legal loopholes and insufficient powers of intervention for the still incomplete deregulation of the electronic communications market. EETT has been attacked both by OTE, which claims that it has imposed very low tariffs for competitors’ access to its network, and its competitors, which accuse it of not having done enough to foster competition. The Commission has said that OTE’s fixed-line competitors have not invested enough in developing their own networks.