Greece Broadband Plan

Greece - Broadband Action Plan to 2008
Enhancing broadband by spurring competition…
Enhancing broadband by spurring competition…

… or “A journey of a thousand-miles begins with a single step“
… or “A journey of a thousand-miles begins with a single step“

Dr Yannis Larios
Dr Yannis Larios
Advisor to the Special Secretary for Digital Planning
Advisor to the Special Secretary for Digital Planning

Where (and when!) it all started…
started…

… or “the first step“
… or “the first step“

Where (and when) the “broadband journey” started…
“broadband journey” started…
In 2004, Greece was lagging behind in Broadband – We needed a “Digital Leap”
In 2004, Greece was lagging behind in Broadband – We needed a “Digital Leap”

!
! We wanted to move from these facts...
We wanted to move from these facts...

In 2004, broadband penetration in Greece
2004
In 2004, broadband penetration in Greece
was at 0,1%-0,2% of population, admittedly
was at 0,1%-0,2% of population, admittedly
lagging behind the EU-25 average
lagging behind the EU-25 average

Source: 10th Report on the Implementation of the Telecommunications Regulatory Package - 2004

!
! To this new reality…
To this new reality…
2006
“…with CAGR (Compound Annual Growth
“…with CAGR (Compound Annual Growth
Rate) of 215%, Greece comes first as the
Rate) of 215%, Greece comes first as the
country with the highest broadband
country with the highest broadband
annual growth rate in 2006 globally”
annual growth rate in 2006 globally”
(Point Topic, World Broadband Statistics, March 2007)
(Point Topic, World Broadband Statistics, March 2007)

Source: Point Topic, World Broadband Statistics
-- 3 --
3

The first steps of the journey…
journey…
Years 2005-06: the “magic touch” of competition & the “Digital Strategy” bring Broadband Growth
Years 2005-06: the “magic touch” of competition & the “Digital Strategy” bring Broadband Growth

BB Lines % Penetration

800.000 7,00%

6,50%
700.000
6,00%

% of broadband penetration
broadband connections

600.000
5,00%
4,39%
500.000

4,00%

400.000

2,67% 3,00%
300.000

2,00%
200.000 1,50%

0,85%
1,00%
100.000 0,47%
0,02% 0,02% 0,09% 0,23%
0,00%

0 0,00%
Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 May 07
(est.)
quot; EC Telecoms Directives transposed

quot; Bundles bring 2Mbps access to less than €25/mo. (-80% since 2004)
quot; The Digital Strategy 2006-2013 is announced by the Government
quot; The “Broadband Action Plan to 2008” is fully unveiled
quot; The incumbent doubles speeds for the same price, starting Autumn 2006

Speaking of “competition’s magic touch”…
“competition’s touch”…
Prices have been slashed by almost 80% in 2 years…
Prices have been slashed by almost 80% in 2 years…

Average broadband connection cost (January 2004- January 2007)
Average broadband connection cost (January 2004- January 2007)
250

225
216,8

200
188,2
175 165,0
163,94
€ / mo.

150

Basic
125 117,93 Middle
106,81
High
96,34 106,6
100 92,1

74,90
75 63,95 60,9
55,40 53,2
41,2 40,1
50
29,8
43,2 27,9
25
23,4
21,7
0
Jan 04 July 04 Jan 05 July 05 Jan 06 July 06 Jan 07

-- 5 --
5

Where the market would bring us…
us…
Forecast: Penetration at 8% by the end of 2008
Forecast: Penetration at 8% by the end of 2008

9,00%

2
8,00%
R = 0,9999
7,00%

6,00%

5,00%

4,00%

3,00%

Estimated Growth
2,00%
driven by market
1,00%

0,00%
Jul 02 Jan 03 Jul 03 Jan 04 Jul 04 Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08

-- 6 --
6

So… the market would bring us to ~8% of penetration in 2008…
So… 2008…

but then, we wanted even “more” for Broadband!…
“more” for Broadband!…

…and that’s where the Broadband Action Plan came !
…and that’s where the Broadband Action Plan came !

-- 7 --
7

More for broadband: The Broadband Action Plan
Additional steps at this “journey”…
Additional steps at this “journey”…

9,00%

2
8,00%
R = 0,9999
Digital Strategy 2006-2013:
7,00%

The “Broadband Action Plan” has set the target of
6,00%
“Broadband Convergence” to the EU avg. by 2009

5,00%

4,00%

3,00%

Estimated Growth
2,00%
driven by market
1,00%

0,00%
Jul 02 Jan 03 Jul 03 Jan 04 Jul 04 Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08

-- 8 --
8

The Broadband Action Plan
Enhancing Broadband by leveraging Structural Funds…
Funds…

… or “paving the way for the next broadband steps!“
… or “paving the way for the next broadband steps!“

The Broadband Action Plan …
…
Enhancing Broadband by leveraging Structural Funds (€450 mil)
Enhancing Broadband by leveraging Structural Funds (€450 mil)

Fields of
Interventions The Target
intervention
• Metropolitan Area Networks in 75 Municipalities (€63 mil)
• Wireless broadband networks in 120 Municipalities and 20 TEDK(€42 mil)
Development of
• 770 wireless hotspots at almost 400 enterprises (€21 mil)
Broadband
• Broadband utilization of the HellasSAT satellite (€10 mil.)
Infrastructure
• “Broadband large project” at the regions of Greece (€210 mil) Broadband
• New law on Investments
Penetration Target:

• Incentives for the development of broadband services by private firms (€36 mil.)
Development of • “Smart regions” with the use of broadband (€10 mil.) from 0,1% (2004) to
Broadband • Broadband services and Digital TV for disabled persons (€50 mil.)
Services • “Digital Local Authority” (€60 mil.) Broadband
convergence (2009)

Demand
• Broadband demonstration projects in 85 spots throughout the country (€11,5 mil.)
stimulation for
• Broadband Demand stimulation across Greece (€50 mil.)
Broadband
• “Communication campaign” for increasing broadband awareness (€4,4 mil.)
Services

-- 10 --
10

A major intervention of the Broadband Action Plan…
Plan…

“Broadband Access Development in under-served Territories”
“Broadband Access Development in under-served Territories”

a project levering Structural Funds and Private Investments (€210 mil.)
a project levering Structural Funds and Private Investments (€210 mil.)

to both promote local access and broadband infrastructure
to both promote local access and broadband infrastructure

plus stimulate demand across the country
plus stimulate demand across the country

in places where citizens & businesses have difficulties gaining access
in places where citizens & businesses have difficulties gaining access

-- 11 --
11

Broadband Access Development in under-served Territories
under-served
We set ambitious but realistic tangible objectives
We set ambitious but realistic tangible objectives

! To increase broadband population coverage to 90% by 2008
! To increase broadband population coverage to 90% by 2008
(compared to less than 40% in 2004)
(compared to less than 40% in 2004)

! To increase broadband geographical coverage to 60%
! To increase broadband geographical coverage to 60%
(compared to less than 10% in 2004).
(compared to less than 10% in 2004).

! To increase competition in the broadband market and achieve
! To increase competition in the broadband market and achieve
competitive retail prices, converging to the EU average
competitive retail prices, converging to the EU average

! To increase demand for broadband services, by also allocating part of
! To increase demand for broadband services, by also allocating part of
the budget to demand-stimulation actions
the budget to demand-stimulation actions

under-served
Objectives were ambitious, but then we made some …..
Objectives were ambitious, but then we made some …..

Strategic Choices:
:

! We wanted to engage the market and enhance competition
! We wanted to engage the market and enhance competition

! We opted for technology-neutrality
! We opted for technology-neutrality

! We wanted to utilise Structural Funds in the most efficient way
! We wanted to utilise Structural Funds in the most efficient way

! We adhered to eEurope 2005 and i2010 principles for Broadband and
! We adhered to eEurope 2005 and i2010 principles for Broadband and
regional development
regional development

! We opted for transparency and speed of implementation
! We opted for transparency and speed of implementation

under-served
Strategic Choice 1: Engage the Market – Enhance Competition
Strategic Choice 1: Engage the Market – Enhance Competition

!
! We divided Greece into 7 regions of
We divided Greece into 7 regions of
equal broadband potential ( ~65% of
equal broadband potential ( ~65% of
Greece & ~6 mil residents, or ~60%
Greece & ~6 mil residents, or ~60%
of the Greek population).
of the Greek population).

!
! Each region has been tendered
Each region has been tendered
separately
separately

!
! Bidders were allowed to participate in
Bidders were allowed to participate in
no more than 3 regions, thus ensuring
no more than 3 regions, thus ensuring
that at least 3 different telcos would
that at least 3 different telcos would
assume regional broadband
assume regional broadband
development
development

!
! The project focuses only on “white”
The project focuses only on “white”
(no broadband at all) and “grey” zones
(no broadband at all) and “grey” zones
(insufficient competition/no access to
(insufficient competition/no access to
infrastructure) across Greece,
infrastructure) across Greece,
excluding Athens and Thessaloniki
excluding Athens and Thessaloniki
-- 14 --
14

under-served
Strategic Choice 2: Technology-neutrality
Strategic Choice 2: Technology-neutrality

! No technology-specific requirements were set at the tendering process
! No technology-specific requirements were set at the tendering process

! Bidders participated on the basis of qualitative & citizen-related service
! Bidders participated on the basis of qualitative & citizen-related service
objectives, such as
objectives, such as

# Minimum broadband speeds were set per user category (households, SMEs etc.)
# Minimum broadband speeds were set per user category (households, SMEs etc.)

# Maximum retail prices were set per user category
# Maximum retail prices were set per user category

# Minimum population and geographical coverage objectives had to be met per
# Minimum population and geographical coverage objectives had to be met per
region
region

# We tested our constraints beforehand, by building broadband business-cases per
# We tested our constraints beforehand, by building broadband business-cases per
region, including all local economic and demographic dynamics.
region, including all local economic and demographic dynamics.

-- 15 --
15

under-served
Strategic Choice 3: Efficient use of Structural Funds to leverage investments

Total Project Budget: €210 mil.

50% 50%

European Regional
European Regional Private Investment: €105 mil.
Private Investment: €105 mil.
Development Fund: €105 mil.
Development Fund: €105 mil.

-- 16 --
16

under-served


76% 24%

Demand Stimulation: €50 mil.
Demand Stimulation: €50 mil.
Development of broadband
Development of broadband
infrastructure and promotion
infrastructure and promotion
of local access: €160 mil.
of local access: €160 mil.

-- 17 --
17

under-served
Strategic Choice 4: adhere to eEurope and i2010 principles for regional development
Strategic Choice 4: adhere to eEurope and i2010 principles for regional development

! It was designed on a per-region basis, taking into account local
! It was designed on a per-region basis, taking into account local
parameters
parameters

! It provides impetus to regional development, by directly addressing
! It provides impetus to regional development, by directly addressing
the specific needs of the regions
the specific needs of the regions

! It puts broadband into the equation of regional development.
! It puts broadband into the equation of regional development.
Broadband investments would come at a delay otherwise.
Broadband investments would come at a delay otherwise.

-- 18 --
18

under-served
Strategic Choice 5: Transparency and Speed of Implementation

! Project parameters have been designed in transparent way through a
! Project parameters have been designed in transparent way through a
regional demand-supply broadband model
regional demand-supply broadband model

! Extensive 6-month consultation process with the market
! Extensive 6-month consultation process with the market

! Winning bids easily determined by an equation known to all
! Winning bids easily determined by an equation known to all
participants, that included all key-project parameters
participants, that included all key-project parameters

! Record-times for contract awards:
! Record-times for contract awards:

quot; Project tendered on September 2006
quot; Project tendered on September 2006

quot; Contract awards on February 2007
quot; Contract awards on February 2007

-- 19 --
19

under-served

quot;The contracts for all Regions have been signed:
quot;The contracts for all Regions have been signed:

quot; Region 1 Operator: Hellas on Line


quot; Region 3 Operator: Tellas


quot; Region 5 Operator: CYTA Hellas

quot; Region 6 Operator: Forthnet

quot; Region 7 Operator: Forthnet

under-served
These innovative aspects, brought the endorsement of the European Commission
These innovative aspects, brought the endorsement of the European Commission

Competition Commissioner Neelie Kroes
commented on the project:

“I am pleased to endorse public funding
for the deployment of broadband networks
in under-served regions of Greece.

The project has a total budget of €210
mil. and is to date the most significant
broadband project undertaken by a
Member State.”

EC Press Release – 07.07.2006

-- 21 --
21

under-served
SIX Innovation points make the difference….
SIX Innovation points make the difference….

! it leverages €210 mil. of Structural Funds and private expenditure
! it leverages €210 mil. of Structural Funds and private expenditure
efficiently to promote broadband growth
efficiently to promote broadband growth

! it includes a significant demand-side element, by complementing
! it includes a significant demand-side element, by complementing
infrastructure development with broadband-use stimulation
infrastructure development with broadband-use stimulation

! it is technology-neutral. Bidders participated on the basis of qualitative &
! it is technology-neutral. Bidders participated on the basis of qualitative &
citizen-related service objectives (retail prices, population coverage, etc.)
citizen-related service objectives (retail prices, population coverage, etc.)

! it has a strong regional dimension and the widest coverage!
! it has a strong regional dimension and the widest coverage!
(~ 60% of Greek population, 50%+ of households!)
(~ 60% of Greek population, 50%+ of households!)

! it has been designed in transparent way, with the participation of the
! it has been designed in transparent way, with the participation of the
market
market

! it secures competition.
! it secures competition.

The Broadband Action Plan
Other complementing steps…
steps…

The Broadband Action Plan …
…

Fields of
Interventions The Target
intervention
• Metropolitan Area Networks in 75 Municipalities (€63 mil)
• Wireless broadband networks in 120 Municipalities and 20 TEDK(€42 mil)
Development of
• 770 wireless hotspots at almost 400 enterprises (€21 mil)
Broadband
• Broadband utilization of the HellasSAT satellite (€10 mil.)
Infrastructure
• “Broadband large project” at the regions of Greece (€210 mil) Broadband
Penetration Target:

• Incentives for the development of broadband services by private firms (€36 mil.)
Development of • “Smart regions” with the use of broadband (€10 mil.) from 0,1% (2004) to
Broadband • Broadband services and Digital TV for disabled persons (€50 mil.)
Services • “Digital Local Authority” (€60 mil.) Broadband
convergence (2009)

Demand
• Broadband demonstration projects in 85 spots throughout the country (€11,5 mil.)
stimulation for
• Broadband Demand stimulation across Greece (€50 mil.)
Broadband
• “Communication campaign” for increasing broadband awareness (€4,4 mil.)
Services

-- 24 --
24

Broadband Action Plan
Other complementary broadband projects (partly financed by ERDF+ESF)…
Other complementary broadband projects (partly financed by ERDF+ESF)…

! Development of Metropolitan Area Networks in 75 cities across Greece, on
! Development of Metropolitan Area Networks in 75 cities across Greece, on
the basis of eEurope access guidelines (€65 mil.)
the basis of eEurope access guidelines (€65 mil.)

! Wireless broadband networks in 120 Municipalities and 20 TEDK (€42 mil)
! Wireless broadband networks in 120 Municipalities and 20 TEDK (€42 mil)

! 770 wireless hotspots at almost 400 enterprises (€21 mil)
! 770 wireless hotspots at almost 400 enterprises (€21 mil)

! Broadband utilization of the HellasSAT satellite (€10 mil.)
! Broadband utilization of the HellasSAT satellite (€10 mil.)

! “Smart communities” with the use of broadband (€10 mil.)
! “Smart communities” with the use of broadband (€10 mil.)

! Broadband services and Digital TV for disabled persons (€50 mil.)
! Broadband services and Digital TV for disabled persons (€50 mil.)

! “Digital Local Authority” (€60 mil.)
! “Digital Local Authority” (€60 mil.)

! Broadband demonstration projects in 85 spots throughout Greece (€11,5
! Broadband demonstration projects in 85 spots throughout Greece (€11,5
mil.)
mil.)
-- 25 --
25

Broadband Action Plan…
Plan…
A “local recipe” that might be of interest to other Member-States
A “local recipe” that might be of interest to other Member-States

Structural Funds put into good use
Structural Funds put into good use +
+

an approach with the market, facilitating competition in the market
an approach with the market, facilitating competition in the market +
+

thorough planning but with a regional focus
thorough planning but with a regional focus +
+

a government deciding not to put its tail into technology-decisions
a government deciding not to put its tail into technology-decisions

=
=

a “Digital Leap” in Broadband
a “Digital Leap” in Broadband

-- 26 --
26

Thank you…

Dr Yannis Larios

ylarios@infosoc.gr
http://ylarios.blogspot.com

Greece Broadband Plan

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