ECONOMY

Domestic telecoms market viewed as close to saturation

The Greek telecommunications sector may be close to saturation, as active mobile telephone numbers outnumber the country’s population, and the sector’s portion of the telecoms market in revenues was above 55 percent in 2004, a survey by Hellastat says. The report suggests that the situation in the market is like a complex web spun around state telecom OTE, the market’s spine, which is seen as the great loser in 2004. Its revenues dropped by 8.7 percent, or 2.85 billion euros, largely due to the decline of fixed telephony against mobile telephony. OTE recorded a drop of 30 percent in operating profits and of 133.7 million euros in net results. Its volume has shown an average 6.2 percent annual decline over the last four years. In contrast, 43 companies in the telecoms sector showed a rise in sales in 2004, with combined revenues of 7.65 billion euros from 7.19 billion euros in 2003, an increase of 6.3 percent. All mobile telephony companies enjoyed a rise, with market leaders CosmOTE and Vodafone increasing revenues by 17.2 percent and 14.2 percent respectively. TIM had a 4 percent rise but its gross profit margin declined to 46.2 percent from 50 percent in 2003, lowering net profits 22.6 percent. New market players have made excellent inroads. In fixed-line services, Tellas increased its turnover by 149 percent last year, recording operating profits for the first time. Q-Telecom, Greece’s fourth mobile network, registered a 75 percent rise in volume, reporting positive net results for the first time, at 1.13 million euros. Finally, the report considers crucial for the growth and profits of companies the convergence of calling rates from fixed to mobile phones with the EU average within three years, which means a 25 percent reduction from current rates.