Projected investments by mobile network operators by 2023
EU funds allocated to broadband infrastructure in Greece
Budget for the Ultrafast Broadband action, the largest PPP project in the country’s history
Greece’s ranking in the EU’s 2019 Digital Economy and Society Index
The digital era is here, and Greece is ready to sync with European advances in information and communication technologies (ICT). The country is using high-tech networks and an enormous range of resources to connect large urban centres with hundreds of inhabited islands and countless mountain villages.
The digital transformation aims simultaneously to develop a strong digital technology industry and educate the next generation. And so far, some key steps have been completed.
In 2016, Greece’s previous government set up the Ministry for Digital Policy, Telecommunications and Media, which was tasked with overseeing the country’s smooth switch to digital services.
In July 2019 the then-newly-elected government, led by Prime Minister Kyriakos Mitsotakis, transformed the body into the Ministry of Digital Governance, reconciling – for the first time – digital policy, e-governance, and citizen services.
The ministry has set out ambitious goals, having expressed its commitment to converge with the European average in terms of digitalperformance andcompetitiveness by the end of its term. Steps are being taken to galvanise the country’s digital transformation and attract investments. But the ministry’s immediate priority is the simplification of the public administration and its services
“Our focus is, in fact, on two pivotal concepts: simplification and interoperability. Our goal is to not only digitise bureaucracy, rather it is to simplify it and let different databases and registries ‘talk’ to each other,” says Minister of Digital Governance Kyriakos Pierrakakis.
In September 2019, the former President of Estonia, Toomas Hendrik Ilves, was appointed as an advisor to the Ministry of Digital Governance. Ilves is credited with having successfully transformed his country into “the most advanced digital society in the world.”
The legal groundwork has been laid for the launch of a fibre optics network, coupled with plans for free WiFi by way of 3,000 hotspots across the country, though the timeframe remains unclear.
However, Greece still has a lot of catching up to do.
Reluctance by many to adopt technologies is holding back digital services, while the state has been slow in going online, which is weighing on competitiveness levels in the business environment. Despite improving its performance in recent years, Greece is a laggard within EU rankings that assess the digital performance of member states.
On the flipside, the country has put together a revised legal framework for the deployment of new generation access (NGA) network infrastructure, including fibre optics, seeking initially to triple network speed.
According to its NGA action plan, Greece aims in 2020 to achieve 30Mbps+ internet access availability for all Greeks and 100Mbps speeds for at least half of all Greek households.
Indicatively, in 2018 Greece held the lowest rate in the EU for fast broadband take-up with only 11% of subscriptions.
Greece is currently entering one of the most crucial moments in its history.
Mobile network operators have been spearheading efforts, taking Greece from a single copper telecom access network into the fibre optics era and from asymmetric digital subscriber line (ADSL) to NGA.
Telecom experts say the biggest challenge for Greece right now is to keep up with customer demand for faster internet connections, both in fixed and mobile, amid rising demand for content and the creation of content.
Greece’s mobile phone market is made up primarily of three players: Cosmote, WIND, and Vodafone, a subsidiary of Vodafone Group.
Cosmote, a fully owned subsidiary of the Hellenic Telecommunications Organization (OTE), is leading the pack with a 46% share of the market, followed by Vodafone (31%) and WIND (22%), according to telecoms regulator Hellenic Telecommunications and Post Commission (EETT). Forthnet, one of the country’s important internet service providers (ISPs), is also preparing to enter the market as a mobile network provider via the mobile virtual network operator (MVNO) model, through the Vodafone network. Their launch is scheduled for 2020.
OTE, 46%-owned and managed by Germany’s Deutsche Telekom, has committed to investing €2 billion until 2022 in Greece, says Evrikos Sarsentis, Mergers, Acquisitions & Investor Relations Director at OTE Group.
“Within this total, OTE aims to make available fibre-to-the-home (FTTH) to 1 million homes, or approximately 25% of all Greek households,” says Sarsentis.
“This is, by far, the largest investment by a Greek telco and follows another period of major investments in the previous four years, of equivalent size, when OTE rolled out fibre-to-the-cabinet (FTTC) to about two thirds of the population, and established the best 4G network in the country,” adds Sarsentis.
OTE is also preparing for the next generation of wireless communication – 5G – which the EU expects to launch in all member states towards the end of 2020.
Local operators Vodafone and WIND also plan to invest at least €500 million each over the next four to five years in the development of next generation networks. Vodafone recently launched its first pilot 5G network in the central Greek city of Trikala, which is the first ‘smart city’ in Greece, and has implemented a number of innovative technologies there.
WIND, mainly owned by investment funds GoldenTree and Cyrus (but being considered by other private equity funds for a possible transaction), is investing an estimated €100 million per year in a bid to connect residents with broadband communications, says George Tsaprounis, Head of Corporate Affairs.
“We have already completed the construction of 300,000 optical fibre lines across Greece and at the same time, our 4G-network coverage is at about 95%,” says Tsaprounis
Meanwhile, Greece’s drive to upgrade and further develop its digital infrastructure is also spurring what is set to be the largest PPP project in the country’s history. The project, dubbed the Ultrafast Broadband (UFBB) action, entails a budget of €700 million, with €300 million deriving from European Union funding.
The UFBB targets 2.4 million citizens that fall beyond the remit of private investor interests and is set to generate more than 810,000 connections of at least 100 MBps ranging from 100 Mbps to 1 Gbps.
In what is seen as a big vote of confidence, in November 2019, 10 companies expressed their interest in participating in the construction and operation of the UFBB’s fibre optic network.
“Through this project we will give millions of citizens and businesses access to speeds that meet modern requirements.We sent a message of cooperation to the private sector and we have received a reply to our call,” said Pierrakakis in a press release.
Further demonstrating Greece’s commitment to its digital transformation was the launch of the Digital Greece theme park and pavilion at the 83rd annual Thessaloniki International Fair (TIF) in September 2018 – the country’s most influential political, business, and trade event.
For the first time, start-ups were given a chance (at no cost) to participate and present their projects while networking with industry giants including the likes of Facebook, Microsoft, Google, and Cisco, among others.
This initiative was taken one step further in January 2019 when Digital Greece helped a number of Greek start-ups participate in the world’s largest innovation exhibition, CES 2019 in Las Vegas.
In the meantime, the Greek Ministry of Digital Governance is working on making the majority of government services operational on mobile phones.
“This requires large-scale technology projects, which may need considerable time to be implemented,” explains Minister of Digital Governance Kyriakos Pierrakakis.
“This said, we are trying to streamline the process and speed up things through public-private partnerships (PPPs) in the technology sector,” he adds.
In the meantime, the minister said a recent revision of the law improves, simplifies, and digitises cell tower licensing – a major project, which will have a tremendous impact on deploying a 5G network in the near future.
The country and its residents have a great deal to gain from the digital transition, particularly when taking into account that Greece is made up of 6,000 islands, of which 227 are inhabited, and many remote mountain towns and villages.
Reliable, high-speed digital technologies can breathe life into these isolated areas and create new possibilities.
Ensuring a high level of connectivity translates into equal opportunities in education, welfare, and work, along with improved competitiveness for business ventures and products. It also serves as an incentive to repopulate rural areas – a key goal of the European Commission.
Both the public and the private sector stand to gain across the civil spectrum – national, municipal, and communal.
Rolling out high-speed fibre optic technology to create a robust broadband market will require different types of investments, including public and private partnerships.
Besides attracting investors, broadband and digitalisation can also create the market conditions for innovative models of financing and business.
Crucial to the success of the endeavour is winning over the public for the expansion of the next-generation broadband infrastructure. Although there is a very high demand for such infrastructure within the cities, in more isolated, localised communities, pushback has been strong, with residents exhibiting more technophobic reactions to the digitalisation movement.
For example, a majority of the city council in Kalamata – in the southern Peloponnese – voted to suspend a pilot 5G network programme in their city, citing fears of possible negative effects on citizens’ health. This came after a group of citizens termed the advanced 5G wireless technology an “experiment” in their city, claiming Kalamata citizens were being treated as “guinea pigs” with the aim of “sterilising” them, linking their claims to unsubstantiated theories about a falling birth rate among Greeks and other commonly held immigration concerns.
“The state could and should digitise all its activities to improve the services offered to Greek citizens and promote transparency; businesses need to adopt digitalisation to become more efficient and improve their services; and citizens need to adopt technologies and stop being technophobic if we are to progress,” says Sarsentis.
Aware of the benefits, the private sector and businesses recognise the need for digital transformation. According to a 2019 report by start-up accelerator Found.ation and tech sector partner EIT Digital, the majority (82%) of Greece’s enterprises have already launched digital strategies.
Aware of the benefits, the private sector and businesses recognise the need for digital transformation. According to a 2019 report by start-up accelerator Found.ation and tech sector partner EIT Digital, the majority (82%) of Greece’s enterprises have already launched digital strategies.
Dozens of municipalities across Greece are following the bright example of Trikala, a town in central Greece, introducing tech-based initiatives for their citizens by tapping into European innovation and funding programmes.
In this direction, more than 200 municipal authorities across Greece have secured – through the EU’s ongoing WiFi4EU initiative – a total of €3 million for the implementation of wireless broadband infrastructure, offering free internet both in and around public buildings, health centres, parks, and squares.
Examples of successful e-government services include the tax platform TAXISnet, citizen services offices KEP, and public administration portal Ermis. And yet, Greece is still lagging behind its EU counterparts in terms of the provision of digital public services.
Though Greece has a plan, the funds, the know-how, and the human capital, it still holds one of the lowest scores on the Digital Economy and Society Index (DESI) for 2019.
Released by the European Commission, DESI ranked Greece 26th among the 28 EU member states for its poor scores in connectivity (28th), human capital (25th), use of internet services (26nd), integration of digital technology (22nd), and digital public services (27th).
To complicate matters further, only 46 out of 100 Greeks between the age of 16 and 74 have at least basic digital skills in comparison to 57% in the EU in 2017.
And the challenge is even greater when considering that not only do a large number of Greek citizens lack basic digital skills, many aged 35 to 44 use the internet less than once per week.
Another major obstacle is the high cost of internet usage in Greece.
Due to continued austerity in line with demands from international creditors, Greece has upped taxes on mobile telephony services. Approximately 40% of all charges paid for mobile phone contracts represent indirect taxes levied by the state. And while the government has expressed its intention to tackle this issue, Greece remains the second costliest country within the EU, as far as telecommunication services are concerned.
On the back of fibre optic technology, artificial intelligence (AI) can evolve into a considerable factor for growth.
A study carried out in May 2019 by Accenture in collaboration with Microsoft found Greeks to be optimistic, albeit confused, about the prospect of an AI-led future.
Greek executives, meanwhile, may acknowledge the strategic importance of AI, yet appear to be reluctant to actively invest in the technology.
Others still oppose changes brought on by the digital era.
According to the previously mentioned Found.ation report, only 9.8% of employers believe their employees’ mentality is very supportive of changes or new tools, while 57.3% classify their organisation’s ability to undertake digital technology projects as very low to basic.
“What we must all understand is that we are still at the beginning, and the changes that are coming will be even more sweeping than anything we have seen so far,” says Tsaprounis at WIND.
As the onset of 5G technologies promises to be life-changing, Greece is upping its game in ICT investments and getting ready for big digital leaps.
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Greece is undergoing a digital transformation to reduce bureaucracy, simplify procedures, and help the country converge with the EU average by the end of the government’s current term, says Digital Governance Minister Kyriakos Pierrakakis.
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