ECONOMY

Broadband connectivity increases fast, but Greece still lags far behind the EU average

Broadband connections in Greece have increased almost threefold over the past year, mostly because of reduced connection fees, but the country still lags far behind other eurozone members as far as fast Internet access is concerned. Prices for ADSL connections have fallen rapidly over the past couple of years: A 384-kbps (kilobits per second) connection, the most common among Greek Internet users, averaged 74.90 euros per month in January 2004, 63.96 in July 2004, 55.40 in January 2005, 53.20 in July of 2005, 43.20 in January 2006 and 23.40 in July 2006. During the same period, prices for a 512-kbps connection dropped from 117.93 euros per month to 29.80 and for a 1,024-kbps connection, the top speed offered by almost all providers, from 216.80 to 41.20 euros, according to government figures. Still, connection prices are higher than those in Europe, a fact attributed to the small market and the small number of providers. At present, there are about 27,000 applications for broadband connection per month. This, along with some providers’ offer to upgrade their clients’ connections at no extra cost, makes government officials hopeful that the pace of broadband connections will accelerate, reaching an estimated 4.1 percent of households by the end of the year. On July 1, broadband penetration in Greece reached 2.66 percent of households (about 296,800 connections), up from less than 1 percent from July 2005 and 1.5 percent at the beginning of the year. In the European Union, broadband Internet penetration reached 12.8 percent in January 2006 (14.46 percent in the old 15 member states), from 8.6 percent in January 2005 (9.81 percent in the old 15 member states). Most new broadband connections (as a percentage of population) were made in Finland, Luxembourg, the Netherlands, the UK, Denmark, Sweden and France. Greece has earmarked about 450 million euros for projects that will spread broadband connections across the country, with the majority of the funds coming from the European Union’s Third Community Support Framework (CSF III). In keeping with the delays that have plagued the absorption of the funds under both this government and its predecessor, the calls for competitive bids for these projects have just been prepared, just a few months before CSF III, which began in 2000, is to expire. Greece will have until 2008 to absorb the funds and, according to European Regional Policy Commissioner Danuta Hubner, the deadline will not be extended. The management of the Hellenic Telecommunications Organization (OTE) announced yesterday that it has already installed 500,000 ADSL gates, more than doubling the capacity of its network. «Broadband connectivity has a high priority in OTE’s strategy,» said Chairman and CEO Panayis Vourloumis. «To this end, we continue to invest in developing and constantly expanding our network, making our broadband services accessible to more citizens. Our next target is to reach 500,000 clients by the end of the year,» he added. OTE also plans to have 750,000 ADSL gateways installed by the end of 2006. Its subsidiary OTEnet is the dominant Internet service provider in the local market. In the past, Internet users have accused OTEnet of using its dominant position to keep access charges high. OTE also plans to offer speeds higher than 1024 kbps to its clients, in view of its offer of new products such as video and TV streaming to its clients. Some of its smaller competitors, notably Vivodi Telecom, have started offering such services, which need higher connection speeds – 2048 kbps for average customers – to companies. Another Internet provider, Forthnet, announced that from mid-August it will extend its connection with networks abroad to 3 gigabits per second (3Gbps), the largest capacity among Greek Internet providers.