DSL: High toll fees charged for an extremely bumpy road

Greece is still in first gear on the information highway. DSL is the first wave of broadband Internet links that transform the Internet from a simple information search engine and electronic post office into a base for teleworking, e-government and two-way entertainment. Broadband links change the Internet’s role radically, potentially improving our lives. However, in Greece there are no more than 25,000 DSL links, less then 1 percent of all Internet links. Worst of all, OTE and its competitors cannot meet the demand. In the few areas where DSL is available, the wait is sometimes one or two months. And that is if you are one of the lucky ones, since there are many areas where DSL is just a dream. Outside Athens, it is only available in the prefectural capitals. The rest of the country is in digital isolation. Even in main towns, the situation resembles the old days when people waited months or even years for a simple telephone line. High fees OTE currently charges 35 euros a month plus VAT for a speed of 384 kilobits per second (kbps) and a maximum download volume of 1,000 megabytes (MB). However, for higher speeds such as 1054kbps (1 megabit [Mb]), without charges for volume, the total price (subscription and standard fee) skyrockets to 165 euros plus VAT. Add to that the charge of activating the ADSL OTE link (34.99 euros), the installation fee of 44.99 euros and the equipment (such as modems), and the total is quite high. These are OTE’s fees, but they set the tone for the rest of the market. In Belgium, the cost for 3MB and 10MB is just 20 euros, in Britain and Italy, the charge for 1MB is 40-45 euros. Meanwhile the cost of a DSL link in practice is high; one company said the annual cost is estimated at about 1,800 euros. Even these prices are cheap compared to what OTE was charging in late 2003 and early 2004 – 400 euros a month for a DSL link, managing to install just 2,000 broadband links by the end of 2003. The reason was none other than OTE’s effort to push its ISDN links; advanced technology certainly, but OTE’s storerooms were full of unsold modems from the national supplier, Intracom. OTE’s delay in promoting broadband links has been scandalous; supposedly it has been preparing for it for two years. In May 2003, it suddenly announced it would be providing DSL as of June, in a clear attempt to take its competitors by surprise. Now OTE promises it will open 50,000 broadband links in the final months of 2004, doubling its current figure. As of October 1, all DSL providers have reduced their fees by 20 percent, while special offers are also being launched, such as OTE’s Conn-X and Vivodi. However, since DSL has entered our lives, its Greek version has begun to present problems. «We have had a lot of complaints. Consumers buy DSL links, thinking that they will have Internet access 24 hours a day, and then it cuts out at the most crucial moment,» said Nikos Vassilakos, president of the Union of Greek Internet Users. To a great extent these problems are due to OTE’s infrastructure, which cannot cope with the new technology. Obviously this also affects the other companies, since nearly all of them use OTE’s network. Whoever buys a DSL connection in Greece is virtually buying a pig in a poke, since there are no guarantees regarding speeds. For example, if you buy 384kbps, in practice you only get a percentage of that, often as little as 10 percent, according to Vassilakos. Neither OTEnet nor the other providers claim otherwise, and do not guarantee the quality of the link, effectively telling their customers they will do «their best.» «It is a major problem for us not to be able to tell our customers precisely what speed they will have, even they want to pay more,» said Yiannis Kavaklis, Internet manager for Forthnet. «The lack of availability, poor quality and the providers’ inability to give their customers new products because of OTE infrastructure all discourage demand for DSL,» said Kavaklis. In order for it to maintain its market monopoly, OTE charges very high wholesale fees to providers (1.69 euros, compared to 19.90 euros for retail), virtually discouraging them from seeking a sector of the market.