Φώτο: Shutterstock

Oligopoly, not taxes, to blame for high telecom charges in Greece-survey

According to the survey, mobile phone tariffs in Greece are among the highest in Europe and the country remains the least competitive in the EU and OECD in this sector. Interestingly, the report was commissioned by the Competition Commission and not by the National Telecommunications and Post Commission (EETT), which has been monitoring developments in the domestic market for years.

Greek telecom companies have been hit with a serious headache after a report was published by the Competition Commission yesterday, which says that very high mobile phone tariffs in Greece are not due to heavy taxation (as claimed by telecom companies) but due to oligopolistic conditions in the market.

The review of Greece's mobile telecom sector, controlled by Deutsche Telekom (via subsidiary Cosmote), Vodafone and Wind, is of enormous concern and reflects a breakdown of competitive practices in the economy at the expense of the consumer.

According to the survey, mobile phone tariffs in Greece are among the highest in Europe and the country remains the least competitive in the EU and OECD in this sector. Interestingly, the report was commissioned by the Competition Commission and not by the National Telecommunications and Post Commission (EETT), which has been monitoring developments in the domestic market for years.

The report, put together by Finnish company Rewheel, shoots down claims by Greek telecommunications companies that high prices in mobile telephony are due to e high taxes, concluding that telecom tariffs in Greece are high even without the taxes.

It also disproves the argument that final prices paid for by consumers are lower than those on official price lists due to discounts and offers. According to the report, mobile phone companies "in many markets often discount the prices they advertise on their websites in special agreements that apply only to certain categories of consumers. In this sense, Greek mobile phone companies are not unique. These discounts usually range from 10 percent to 30 percent."

"In Italy, Vodafone's price for a mobile app that includes 50 gigabytes of data (and unlimited minutes of talk time and SMS) is 12.99 euros. However, consumers who request a new number, and consumers who intend to change providers enjoy a discount of about 31 percent, as the charge for them is 8.99 euros per month. Vodafone Greece "provides a 35 percent discount on the RED Start package list charge, from 43 euros to 27.95 euros per month, only when the consumer requests a new number or when he intends to change provider, transferring his line from Cosmote or Wind (in line with Vodafone Italy). However, even at this price point, this program, which only provides 3 gigabytes of data (and 1000 minutes of talk time and SMS), costs three times more than some Italian consumers pay to buy 50 gigabytes of data (and unlimited minutes of speech and SMS)," says the report.

Rewheel explains that "with a monthly budget of 60 euros - a monthly amount that very few consumers in Greece can spend - Greek consumers could buy a mobile app in October 2019 with a maximum of 5 gigabytes of data and 1000 minutes of talk time within Greece. Greece was ranked as the country with the fewest data gigabytes that could be bought for 60 euros in October 2019 ". Following reductions in March, "the consumer in Greece with 60 euros could buy an extra gigabyte than in October 2019 (6 versus 5 gigabytes)".

According to the Finnish company, "prices in Greece are very high even if mobile phone taxes are exempt" and "most Greek consumers pay 10-20 euros a month to buy programs with minimal data (eg 200 megabytes), while in many other EU countries, where the consumer prices are generally much higher, consumers buy 5-100 gigabytes at around 15 euros a month."

As for the reasons why the tariffs are high, it is emphasized that EU prices in mobile telephony markets are mainly influenced by the degree of competition rather than by general price levels or other exogenous factors.

In particular, “the prices of mobile telephony in the EU28 markets are determined both by the number (3 vs. 4) of mobile telephony companies operating in them and their characteristics. Any network and spectrum sharing agreements could also, depending on the scope and geographical scope of the agreement, reduce or even significantly prevent effective competition in mobile phone markets. "

Greece's mobile phone market has been controlled by the same three players for the last 20 years: Cosmote, which belongs to the Deutsche Telekom group, Vodafone, which belongs to the Vodafone group, and Wind Greece, in which institutional investors participate. The market share of the three mobile operators, according to EETT, has been largely stable since 2009. Cosmote controls about 50 percent of the market, Vodafone about 30 percent, and Wind about 20 percent.

RELATED ARTICLES