Greece Hits EU Internet-Use Bottom

73 Percent of Greeks Have Never Used the Internet

Cultural factors and OTE's wholesale monopoly holds independent web serviceproviders captive in a minuscule local market compared to its booming EU counterparts

Dimitris Yannopoulos

Athens News

THE FAILURE to educate Greeks on the benefits of internet access, coupled with a monopoly control over end-user networks by the state-controlled 'national carrier', OTE, is the main factor cited by local firms to explain Greece's backwardness in this strategic market.

Nearly three-quarters, or 73 percent, of Greeks have never used the internet, the highest percentage of non-internet users in the 25-member European Union, according to figures released by Eurostat on April 7. The EU's statistical agency also found that internet use among Greek students was lower than among all their European counterparts and that less than 1 percent of Greek households had a broadband internet connection, compared with 23 percent of households throughout Europe.

Greece also had the third-lowest rate of internet access by households (22 percent) in Europe, after Lithuania (16 percent) and the Czech Republic (19 percent). Greeks also use the internet less frequently than other Europeans: only 18 percent of Greeks use the internet at least once a week compared with 43 percent of EU residents.

The country also has the highest rate for those who have never used the internet, which accounts for 71 percent of men, 75 percent of women, 31 percent of students, 59 percent of workers and 72 percent of the unemployed. The corresponding EU averages by contrast are 39 percent for men, 47 for women, 7 for students, 29 for working people and 48 percent for the unemployed.

Local-loop monopoly

Independent internet service providers (ISP) complain that deep-seated cultural and market barriers have kept the majority of Greeks oblivious to the Information Revolution that swept across the world over the last decade.

"Apart from the obvious but not decisive disadvantage of the Greek language, neither the local education system nor the public sector, nor even the major media firms have done much to cultivate the enthusiasm which prevails in the rest of the industrialised world about internet use," said Dina Karvouni, a spokeswoman at Forthnet, the country's first and fastest growing independent ISP.

On the other hand, there are long-running problems and bottlenecks in the country's development strategy and market structure "arising from the flawed initial planning for the provision of fast, ADSL access by OTE, and the latter's monopolistic practices towards independent providers," Karvouni told the Athens News.

Tellas, a subsidiary of the Public Power Corporation, insists that cultural factors have not been an obstacle to the development of web services in countries that have remained more isolated from both Anglo-Saxon and EU cultural and market ties than Greece. "International experience has shown that the real driving force behind the expansion and diversification of broadband internet services is the carrier that controls the access network to the end user (called 'local loop' or 'last mile')," Tellas marketing manager Antonis Tzortzakakis told the Athens News.

The fact that the specific service has not been fully deregulated yet and is under the control of OTE, "is due to the delay in the enactment of the law on electronic communications", he explained. As a consequence of this delay in the implementation of EU regulations, "the procedures for the Local Loop Unbundling (LLU) could not be promoted by any ISP in the local market," Tzortzakakis said. This meant that advanced internet services that are currently booming in the rest of Europe, such as internet telephony (Voice-over-IP), wireless telecoms and Digital Video on Demand, cannot be provided yet, noted Karvouni.

Squeezing out competitors

Neither should the small size of the domestic market be considered an impediment, since population density in Greek urban and tourist areas would more easily accommodate local internet hubs. "Past years' local telecom policies, on the contrary, have focused on preventing alternative carriers from increasing their share" until OTE is capable of plugging its holes in infrastructure, technology and efficiency, said Tzortzakakis.

"This fact led to the squeezing of the entire telecommunications market, including internet users, and made it harder for alternative carriers to expand further in potentially lucrative services," he added.

Nevertheless, local business firms have been much quicker in realising and exploiting web access, to enhance their competitive edge, which explains why they were closer to their European counterparts in internet use, according to the Eurostat survey. With 92 percent having at least a simple dial-up connection to the internet and 44 percent having a broadband connection, Greek business compares favourably with the 91 percent of European companies with a dial up and 63 percent with broadband connections.

But there's a ray of hope finally breaking through the inertia. "A more concerted campaign of informing the Greek public about the potential benefits from fast internet access since last year has triggered an explosive growth of demand for new broadband connections for both corporate subscribers and private households," Karvouni noted, despite the still low profit margins allowed by OTE's monopoly over local-loop facilities.

(Posting date 24 April 2006)

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