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southern Balkan region is a major potential market for a variety of
companies and one Greek operator is set to take the lion’s share
of telecommunications in the region.
The state-owned Hellenic Telecommunications Organisation (OTE) expects
mobile telephony to leapfrog fixed-line services in the region in the
next few years.
In November last year, OTE bought Macedonia’s second GSM (global
system for mobile communications) licence for $25 million. This gives
the operator a footprint covering the entire southern Balkan region
– a market of 45 million people compared with Greece’s 10.5
million. The potential is huge: mobile penetration in the region is
still only about 15 per cent, far below western European levels.
Cosmote, OTE’s
mobile phone subsidiary, acquired 90 per cent of Albanian Mobile Communications
(AMC) in 2000. The Greek firm rapidly rolled out an expanded network
and within a year had increased its subscribers from around 13,000 to
more than 200,000.
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This
was a tremendous advance for a company that only launched commercially
in 1998, well behind the other two operators Panafon and Stet Hellas.
Cosmote clinched the number one spot in the Greek mobile market last
year, pushing Panafon (53 per cent owned by Vodafone) into second place.
Cosmote has more than 2.7 million subscribers today, a 55 per cent rise
on the previous year. Of those, nearly 1.5 million have a contract while
the rest are prepaid users.
At the time of its launch, the mobile penetration rate in Greece was
only nine per cent, so Cosmote’s strategy was to enter the market
with lower tariffs, says marketing and public relations director Marilena
Fatsea. “Consequently, mobile telephony became accessible
to everyone.
“The
penetration rate is now more than 63 per cent. Within three years, Cosmote
succeeded in covering virtually 100 per cent of the population. Even
the most remote areas of Greece enjoy mobile communications thanks to
us.”
Within a year of acquiring AMC, Cosmote has turned the operator into
one of the most profitable in Europe. “This was achieved by repeating
the successful model that was applied in Greece – the rapid roll-out
of a superior GSM network, simple tariffs and access to all,” says
Ms Fatsea. “AMC contributes very positively to our financial results
by adding approximately nine per cent of revenues and 15 per cent of
group profitability.”
Late
last year, OTE was in talks with Telenor on whether to buy the Norwegian
company’s 18 per cent stake in Cosmote to add to the 59 per cent
stake it already owns. The listed company, which is offering free monthly
internet connection to new customers, features in the FT500 survey.
In the first nine months of 2001, OTE reported a 282 per cent rise on
consolidated net income to $111 million. Company earnings before interest,
tax, depreciation and amortisation (EBITDA) in the period increased
by 152 per cent to $257 million.
Ms
Fatsea says future plans include foreign expansion and the exploitation
of new technology, including third generation (3G) mobile telecoms.
“We were the first to offer GPRS (general packet radio service)
in Greece and with it we set up a nationwide network. We are developing
GPRS services according to market demand, which is the name of the game
right now,” she adds.
Meanwhile, Lannet Communications,
a subsidiary of Greek textile group Klonatex, hopes to gain a five per
cent share of the fixed-line market by 2005. Lannet completed its interconnection
with OTE’s network late last year, following the deregulation of
Greece’s local-loop telecoms market.
Lannet plans to invest $66 million over the next three years to strengthen
its position in the local IT market. Chief executive Stavros Papapanagiotou
says Lannet, which was set up in 1999 and began commercial operations
in January last year, is now the biggest private investment company
in the country.
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“The
difference between Lannet and other companies in the market is that
its concept is to be an added-value operator,” he says.
“Lannet provides tailor-made solutions for Greek corporations.
We try to provide both data and voice services and we have invested
a lot of money in infrastructure.”
Lannet posted revenues of $10.39 million for 2001 and is aiming for
$23 million this year. The company aims to capture a five per cent market
share in the telecoms sector by 2005 and a listing on the Athens
Stock Exchange main market by June 2002.
The company, which uses a unique billing system, has a wide range of
corporate clients, including banks, hotels, construction firms, shipping
lines and retailers. The interconnection with OTE has enabled Lannet
to extend and improve its services, and it is now providing fixed-line
phone services to households.
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