NEWS

Simitis says no to OTE merger

Firmly scotching any prospect of state OTE telecom merging with its private, major supplier, Intracom, Prime Minister Costas Simitis said yesterday that the days of government support for local telecom manufacturers were over. We do not agree with the idea of a vertical integration or merger, Simitis told journalists at a Foreign Press Association lunch in Athens. On Friday, Intracom chief executive Socrates Kokkalis – who was present at yesterday’s lunch – floated the idea of a corporate partnership or cooperation with OTE or possibly with other Greek companies in the sector, to create a group with a strong international presence. His remarks followed the announcement, on October 31, of a merger between Greece’s two biggest banks, National and Alpha Bank. But Simitis said OTE should have the opportunity to take advantage of competition and seek the best possible solutions in its deals regarding procurements. Our policy, which started in the 1980s, used to be that OTE procurements should be used to develop the Greek telecom industry, the PM said. But that period is over. There is now the option of more suppliers, each of which has its own advantages and disadvantages. Last week, Kokkalis’s proposal – which was attacked by opposition New Democracy as against the principles of the free market, competition and transparency – was rejected by Transport and Communications Minister Christos Verelis. Intracom stocks lost 3.61 percent on the Athens Stock Exchange yesterday, bringing its total losses over the past two sessions to over 9 percent. They are on a good road, Greek Prime Minister Costas Simitis said, but he was also cautious. I have no illusions that these talks will produce a magic and immediate solution to the Cyprus issue, he said. It needs work, it needs thought, it needs action. But it is a way forward and this is what we must welcome.