The new Greek digital economy

The information and communication technologies (ICT) sector is already important to the Greek economy and the country’s geostrategic location means it has the opportunity to become an ICT hub for the wider region. That’s the government’s aim and it’s focused on urgently digitizing the country and developing a strong digital technology industry.

“Adopting digital technology as a fundamental strategic pillar can and will reshape the wider Greek economy, driving innovation, growth and job creation,” asserts Anastasios Tzikas, President of the Federation of Hellenic Information Technology and Communications Enterprises.

There is now a Ministry for Digital Policy, Telecommunications and Media, as a central platform for all digital and ICT initiatives. It’s also updated its Digital National Strategy. Nikos Pappas, the department’s minister, says “Greece is experiencing a significant technological revolution.”

“Greece is experiencing a significant technological revolution.”
Nikos Pappas, Minister of Digital Policy, Telecommunications and Media

The updated strategy’s first priority is deploying new generation access (NGA) network infrastructures. Fixed high-speed broadband access is only 7% and it’s “the only European country with one telecom access network, an old copper one.” points out Panos Papadopoulos, CEO and Vice Chairman of internet and telecommunications services company Forthnet.

European funds have been allocated to broadband networks and other substantial investments are planned. Expectations are set for the EuroAsia Interconnector, linking the electricity systems of Israel, Cyprus and Greece, to include fiber-optic cables, for example.

The private sector is also investing in Greece’s networks. Forthnet is putting money into fiber-optics. OTE Group, Greece’s largest telecommunications provider, has already spent €2 billion on NGAs and plans to invest another €1.5 billion by 2020. Vodafone Greece is also investing and sees itself as a “catalyst in moving Greece to fiber and NGA,” says Chairman and CEO Haris Broumidis.

One way Greece intends to create a stronger ICT industry is by nurturing startups and research centers. Incubators have been set up, plus venture-capital schemes, accelerators and technology clusters for sectors like microelectronics, gaming, space and biotechnology. Entrepreneurial projects that have taken advantage of this support network include Taxibeat, a cab-hailing application recently sold to Daimler for €40 million, and Upstream, a mobile commerce platform, which has €25 million in European Investment Bank financing. These successes give weight to Pappas’ conviction that “Greece’s digital economy is the tool for sustainable growth.”

Nikos Pappas, Minister of Digital Policy, Telecommunications and Media

Point of view Nikos Pappas

How do you see Greece’s digital future?

Greece can become a regional hub in many areas, including transport, energy and communications. How? We have to build credible networks. The major initiative on which most applications will be built is new generation access networks (NGAs), such as fiber optics. Already, we have €400 million available from the EU to start working on this. Greece is near the bottom of the EU in development of these networks. Our administration has faced this reality with actions and numerous initiatives. We have brought in cost-reduction legislation. This obliges every company developing a network to allow other networks, such as fiber optics, to pass through. This ultimately reduces the total cost of NGAs by around 60-80%. Using fiber optics, we are going to triple or even quadruple network speed, multiplying Greece’s attractiveness to investors. The distance between the countries that take advantage of the technological revolution and those that don’t will grow dramatically. The government is commited to making this digital transition take place and maximizing its effects for our country and our citizens.

Why do you see Greece becoming a communications hub?

Greece is so close to many countries in the EU, as well as North Africa. Any product can come here, get an EU stamp and travel in a matter of a day, practically to everywhere. But investors look for stability and effectiveness, which is why one of the keys to Greece’s future is a first-class NGA network.

What do you aim to achieve by opening a Greek Space Agency?

Our country lacked an agency that could unite research centers, universities and entrepreneurs intrinsic to space-related business activities and policy. For years, Greeks have been present in international space agencies, including NASA, and you can find us in essential space projects, even missions, but our flag is nowhere! There is a Greek professor that worked on the first mission to Pluto. There is a Greek business that develops sensors enabling flying objects to locate their position on their own, without the need to communicate with any radar or satellite. Hellas Sat 3 was recently launched into the Greek orbital position of 39 degrees East. The question is how you persuade people to move towards using technology for their advantage in their businesses. We have the applications and the products, we are not lacking in ideas or entrepreneurship, but we are lacking in the coordination of forces. These are the kind of problems that we are trying to solve with the Hellenic Space Agency.

Panos Papadopoulos, CEO and Vice Chairman, Forthnet

Point of view Panos Papadopoulos

Forthnet is a leader in the fast growing media and communications sector in Greece and a pioneer in introducing Internet and pay-TV services in the country (controlling Nova, the first pay-TV platform to operate in Greece). What are the main priorities for the company in the medium to long term? What are your expectations for 2017?

We want to see the final positive conclusion of the second review, so that confidence will return to retail demand, which we expect will increase. All the delays for the past few months in the completion of the second review have affected demand in a negative way. But we believe that good news is coming soon, and the whole environment is going to change once again. Our focus for 2017 is therefore on the return for retail demand. In the medium to long term, we have important issues on the table right now regarding next generation network investments.  We believe that there is a big opportunity, and I will elaborate on this later on. A priority in the long term is, of course, providing other services such as mobile telephone networks using the MVNO (Mobile Virtual Network Operator) model or other pay-tv over the top services, in order to enhance our service portfolio with mobile services and over the top services. All these initiatives will allow the company to provide its users with an improved experience and innovative services, besides its current high-quality content assets.

When commenting on the company’s performance in 2016, you recently referred to the need to focus on a business plan with innovative services at its core. Can you please provide us some insight into this plan and what your priorities will be within the scope of innovation?

In the 2016 financial results publication we announced a huge strategic achievement, which was the conclusion of the refinancing deal with our lending syndicate. This give us the opportunity to focus once again on our normal operation and to try and achieve our goal of enhancing our services portfolio for our customers. This is why during the last month we announced new services such as Nova on demand. We are also in close collaboration with mobile network operators in order to conclude a deal to provide mobile services as a virtual mobile operator to our clientele in the coming months. On top of that, we also announced the renewal of our cooperation with Euroleague, which is the top basketball European championship, and currently considered to be our top premium sports asset with regards to quality. The Euroleague championsip is on an exclusive basis for the next three years. This is important for the whole country as we have two Greek basketball teams participating, which are the most popular teams. All these things have been a step forward right after our refinancing deal with our bankers. It was crucial to add this refinancing deal in order to focus on our normal business and to enhance the service portfolio to our customers.

The Greek government has developed Greece 2021, an action plan for sustainable long-term growth based on the development of high value added sectors, especially in niche markets within the scope of ICT where the country has a competitive advantage. In which ways do you believe Forthnet is leading by example in this direction?

We have a spinoff company called Forth-crs, which is an e-tourism solution provider. It is a company that bridges the gap between agencies and shipping companies. The company originated after years of R&D while trying to provide innovative services to our customers, which is a part of Forthnet’s DNA. Our spinoff company is targeting the shipping industry by providing very specific services to this sector. This is a different market segment that the mother company does not focus on. We saw the need to have an automatic system to sell tickets as there were too many ships traveling between the mainland and the islands. No one abroad has software like  this, so we developed a total solution, a system to provide automation of ticket selling. We interconnect all the shipping companies, ports and passengers. Forth-crs is a daughter company, 100% owned by Forthnet. If you visit the Greek islands during the summer, you will see that the ticket will have the Forth-crs stamp, as all the companies use Forth-crs as an intermediary between the shipping companies and agencies. This is just an example of our contribution to this ICT (Information and Communication Technology) sector and progress and development you mentioned before. To be honest, right now, we are trying to expand the services this company provides outside Greece. We have a branch subsidiary in Italy and we are trying to expand this business model along with the software and services to all the Mediterranean.

Minister for Digital Policy, Nikos Pappas, recently stated that ‘Greece needs to develop new high-speed networks, and improve its infrastructure in order to better exploit the comparative advantage offered by its geographical position, as a potential hub for north Africa and southeast Europe’. What role do you see Forthnet playing within this scope?

We believe in this concept. We are big supporters. We are big fans and we believe that there is great opportunity for international investors in this area. Greece is the only European country with just one telecom access network: an old copper network; this is the only way that we can connect with broadband internet in all homes and businesses at the moment. It is a unique situation in Europe and we believe that it is a big opportunity to grasp. As Forthnet, we can contribute with the clientele we currently have, as we serve more than 700 thousand unique households in Greece – 17% of the total households in the broadband sector in Greece. We have the experience to build, operate and to maintain this type of network.  And the most important thing is that we are currently the only industrial player with a clear fiber-to-the-home vision.

Could you elaborate on Forthnet’s plans to enter the still-lucrative mobile telephone market by becoming a Mobile Virtual Network Provider and its investment strategy? Are you also considering entering the fiber optics networks sector? What benefits would this bring to the company and to the Greek economy?

If you have the opportunity to improve the telecommunications infrastructure, by providing faster and better connections, the benefits for all businesses, either local or foreign, would be much greater. Right now, there is no real competition on the telecommunications infrastructure front. By creating real competition on the access side, both the quality and the price improves, and this in turn benefits the Greek economy in the long run. This also has an effect on the creation of jobs and GDP growth. But from an industrial point of view, we can emphasize that you are not going to find any other European country that has just one copper network without any competitive access infrastructure, and this is a real opportunity for the industry. I think that the government understands the potential because it is actively trying to explore this opportunity. Recently, they passed a law to help facilitate investments by reducing costs. In the past, we created a small pilot project in an area of Athens.  Last July, we signed an agreement with ZTE, a Chinese technology giant, whereby we developed a business plan together to invest in fiber optics in Greece. Further to this agreement, and also during the recent visit by Prime Minister Tsipras to Beijing for the One Belt, One Road Forum, we signed a cooperation agreement with Shanghai Gongbao Business Consulting Co. Ltd and KaiXinRong Group Co. Ltd to explore a business partnership for the financing of this fiber optic network. This partnership envisages the possibility to invest up to 500 million Euros over the next seven years for the deployment of a new telecommunication access network based on fiber optic technology, providing gigabit connection in Greece. The bulk of the investment will be carried out during the first three years when it is expected that there will be a subsidy of the demand for fiber optic connections by EU resources, managed by the Greek government.

In Forthnet, we have the expertise, we have a clear vison, we have the clientele and we will contribute all of that that to our cooperation agreement. The fixed broadband penetration of high-speed access in Greece is 7%, whilst the average in Europe is about 40%, and this is a big opportunity for investing in future proof technologies like fiber optics. High-speed networks and especially the development of a second access network, based on a future proof technology like fiber optics, is crucial and it will be catalytic for the Greek economy for the years to come.

Could you elaborate on Forthnet’s plans to enter the still-lucrative mobile telephone market by becoming a Mobile Virtual Network Provider and its investment strategy? Are you also considering entering the fiber optics networks sector? What benefits would this bring to the company and to the Greek economy?

One more peculiarity of our industry is that the MVNO penetration is under 1% of the whole mobile market, whereas in other EU countries, 40% of the mobile market is MVNOs. Companies that do not have their own network use the mobile network. They do not have the infrastructure, but they have the branding and the clientele. This is an underdeveloped market in Greece, and we believe there is a market opportunity. We are negotiating with mobile operators, which currently have the infrastructure, to be able to expand to this specific market. Our plan is simple. As a first step, to provide mobile services to our clientele, more than 700 thousand unique households which means targeting more than two million individuals.  We already provide their paid TV, landline and broadband, and would like to include mobile services in the package. Under this strategy we complement our strong content assets with mobile services, apps and experience. We are in close cooperation with other companies, as well as the Greek Communication Authority, and we believe that during the forthcoming months, we will be able to provide this to our customers and clientele.

What synergies do you foresee between the public and the private sector to keep up with the major changes occurring both on a European and an international level, with respect to new communication networks and the Internet of Things (IoT)?

It’s fundamental to have some form of cooperation between private sector companies and the public ones. In our industry, you could say that a typical example of such a synergy and cooperation could be the Syzeyxis network project, the National Public Administration Network. The Syzeyxis network is the telecommunications network of public services. It is a unique network that is going to interconnect all public sector premises by voice, video and data. This will increase the interoperability between all the public agencies, as well as the communication between the public sector and the outside community. All the public sector will communicate through this network, including all the universities, schools and hospitals. There is ample room for growth in this area, as until now they have been isolated government agencies and offices. The project is on the table, but it is not progressing as fast as we expected.

According to some players in the Greek IT sector, “mobile technology exports are bigger than olive oil”. What role do you believe ICT will have in the upturn of the economy?

We believe that with the correct innovation and the right strategic direction we could improve the general competitiveness and the overall position of Greece with regards to its digital index and benchmarking. We have excellent human capital, and we need the framework in order to support that and work towards economic growth.

Forthnet was about to restructure the company with a deal that did not go through with Vodafone and Wind. What type of partnerships or investments is Forthnet open to at this point in time?

As management, our mission statement is to improve the performance and our balance sheet in favor of all our stakeholders. We have the right strategy in place and all our competitors have been very attracted to our equity structure during the past few years. With regards to investments, in the short term, we are looking at those that focus on content and customer experience. In the long term, we are focused on the opportunity which is the deployment of the second access telecom network based on fiber optics. But we are always open to any discussions with potential benefit to all stakeholders. It is what we have done in the past, what we are doing now and what we will do in the future. We welcome whomever can create value to all stakeholders.

As CEO, you have been responsible for essentially stirring Forthnet through the most challenging crisis that has hit Greece and its modern history. Forthnet is a very emblematic company in Greece because of the role that it has played by bringing internet into the country. Forthnet is synonymous with innovation today and transformative services. Do you believe that 2017 could be a catalyst of change for Forthnet? What would you like to achieve ultimately as CEO of Forthnet over the next few years?

We want to be a part of the next generation fiber network era in our industry. We are the only player who can play this role right now as we have clear vision, the clientele, and the know-how. This will help us provide our clientele with more innovative services. 2017 could be a milestone year for our history due to the collaboration and participation in this next generation fiber networks area. We share the vision that this country needs a next-generation network infrastructure that is future-proof, based on fiber optics, and we are the right partner in this next step of the industry and of the country.

Haris Broumidis, Chairman and CEO, Vodafone Greece

Telecoms giant has Greece’s back

Vodafone Greece, part of international heavyweight Vodafone Group Plc, is a telecommunications provider for individuals and businesses, also engaged in spurring on economic and social development. Haris Broumidis, Chairman and CEO of Vodafone Greece, says: “The commitment of the Vodafone Group to Greece is evident by the €1.5 billion investment made in recent years and the 5-year investment plan for €500 million by 2020.”

Vodafone’s confidence in Greece aids the country’s equal participation in the European Commission’s vision of a European Gigabit society: widespread connectivity delivered by robust technologies. Broumidis says, “I see Vodafone as a catalyst for moving Greece into the digital era, from copper to fiber, and from ADSL to NGA; moving the country to a Gigabit society through the creation of next generation fixed and mobile networks.”

Vodafone Greece and the Vodafone Foundation also contribute to social programmes that improve access to healthcare and education for the most vulnerable. Among its 2,550 employees are highly qualified engineers supporting the Vodafone Group, and specialized teams addressing complex ICT situations for Greece’s big businesses. It is also the flag-bearer of one of the main concerns of its umbrella group: The Internet of Things (IoT); the connection of devices beyond computers and smartphones to the internet, touted to be the future way that businesses, governments and consumers will interact with the world.