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1
THE ROLE OF MOBILE TELEPHONYIN BROADBAND CONVERGENCE
56 Kifissias Ave., Maroussi 151 25 Telephone: 210 63 00 066
Fax: 210 610 60 93e-mail: info@eekt.gr
George Stefanopoulos
General Manager of ΕΕΚΤ
ACHIEVEMENTS and CONTRIBUTION of MOBILE TELEPHONY in GREECE
OPPORTUNITIES and PROSPECTS – “THE BROADBAND CHALLENGE”
ELEMENTS OF DELAY and OBSTACLES
CONDITIONS for GROWTH and FUTURE CONTRIBUTION
CONTENTS
Source for the Presentation Data
Study by the Athens University of Economics and Business (ΟΠΑ) & the ICAP Group
«Social-Economic Assessment of the Mobile Telephony Sector in Greece»
The Corporate Reputation Index (TRI*M) is composed of 5 factors for the Sector: Overall Reputation, Favourable Opinion, Trust, Success, Quality of Products & Services - SourceTNS ICAP
ACHIEVEMENTS and CONTRIBUTION of MOBILE TELEPHONY in GREECE
Corporate Reputation of Mobile Telephony in Greece
70
50
30
10
59
43
2738
21
34
Δείκτης Εταιρικής Φήμης: Α.Ε. – Ε.Π.Ε.
Αρνητική Εταιρική Φήμη
Θετική Εταιρική Φήμη
496Mobile
Telephony
494Fixed
Telephony
498Banks
481Airline
Companies
473Shipping
458Food &
Beverage Sector
70
50
30
10
5345
7
3422 18
70
50
30
10
5244
8
31
1322
Δείκτης Εταιρικής Φήμης: Ο.Ε. – Ε.Ε. - ΕΛ.ΕΠ
Αρνητική Εταιρική Φήμη
Θετική Εταιρική Φήμη
496Mobile
Telephony
499Fixed
Telephony
497Banks
469Airline
Companies
475Shipping
480Food &
Beverage Sector
General Public
Αρνητική Εταιρική Φήμη
Θετική Εταιρική Φήμη
971Mobile
Companies
994Fixed
Telephony
953Banks
858Airline
Companies
896Shipping
967Food &
Beverage Sector
Large Enterprises Small Enterprises
The Sector enjoys the highest Corporate Reputation Index among other sectors – quite a fair outcome
Mobile Telephony – Contribution to the Economy
The Mobile Sector’s Gross Value Added, produced within Greece, amounts to €3.305 million
The Gross Domestic Product of the Sector and its suppliers amounts to €4.404 million
Source: Merrill Lynch (2008) European Wireless Matrix Q3
The Sector’s contribution to the economy is close to 2% of GDP, the second best percentage figure in the EU
Contribution of Mobile Telephony to State Revenues
• The State and the Social Security Funds absorb 41% of the total turnover produced by the Sector in Greece
• Contributions by the Sector to State revenues and social security funds amount to €1,8 billion, or 0,8% ofGDP
Government revenues(in thousand euros)
444.712
191.592229.600
79.082
247.036
83.997
28.85369.167
423.995
0
100.000
200.000
300.000
400.000
500.000
VAT Corporate tax Income tax Mobiletelecoms salestaxes and other
Social securitycontributions
Taxes and contributions from theprovidersTaxes and contributions from therest of the value chain
Based on the 2008 Budget figures, the Sector’s contribution to State revenues corresponds to the sum of the investment budgets for
Education and Industry
Contribution of Mobile Telephony to the Labour Market
Productivity per employee employed by the Sector’s enterprises amounts to €246.000 and the average annual gross salary to €36.000 (relatively to €26.900 on average for the Greek economy)
Employment
31.213
32.55891.755
6.613
24.600
27.983
0
20.000
40.000
60.000
80.000
100.000
Provide
rs
Suppli
ers &
retaile
rsValu
e Chain
Total
Indire
ct ben
efits:
Public
secto
rMult
iplier b
enefits
Total
Gross labour income (in thousand euros)
2.542.054
856.375
875.814
809.866
615.843
240.5320
700.000
1.400.000
2.100.000
2.800.000
Provide
rs
Suppli
ers &
retaile
rsValu
e Chain
Total
Indire
ct ben
efits:
Public
secto
rMult
iplier b
enefits
Total
The Sector contributes to employment creating 92,000 jobs with a total gross income of €2,5 billion
Prices of Mobile Telephony Services
Mobile telephony appliances and services show the greatest cumulative decrease in prices (56,4% and37,5%, respectively) relatively to all other 652 goods and services that made up the Consumer Price Index
basket between the years 1999 and 2007
-60%
-40%
-20%
0%
20%
40%
60%
Mob
ile te
leco
ms
equi
pmen
tM
obile
tele
com
s se
rvic
esW
irele
ss te
leco
ms
equi
pmen
tFi
xed
tele
com
s se
rvic
esFi
xed
tele
com
s eq
uipm
ent
Audo
visu
al e
quip
men
t -Au
tom
obile
sH
ouse
hold
equ
ipm
ent a
nd re
pairs
Phar
mac
eutic
als
Mus
ical
inst
rum
ents
- La
rge
Fina
ncia
l ser
vice
sW
hite
goo
dsG
lass
war
e an
d ta
blew
are
Furn
iture
- Fl
oor c
over
sPe
rson
al c
are
Hom
e an
d ga
rden
tool
s &
Non
alc
ohol
ic b
ever
ages
Hai
r & b
eaut
y sa
lons
Smal
l rec
reat
ion
equi
pmen
t -H
ouse
hold
cle
anin
g su
pplie
s an
dC
loth
ing
Alco
holic
bev
erag
esBo
oks
- new
spap
ers
-Fo
odG
ener
al C
onsu
mer
Pric
e In
dex
Rec
reat
ion
serv
ices
Oth
er s
ervi
ces
Hom
e re
pairs
Insu
ranc
e pr
emiu
ms
Foot
war
eTu
ition
Soci
al s
ecur
ity s
ervi
ces
Med
ical
& d
enta
l car
eH
olid
ay p
acka
ges
Wat
er s
uppl
y, d
rain
age
and
Res
taur
ants
and
caf
esH
ospi
tal c
are
Tran
spor
tatio
n eq
uipm
ent
Ren
tTr
ansp
orta
tion
serv
ices
Mai
l ser
vice
sH
otel
sTo
bacc
oEl
ectri
city
, nat
ural
gas
and
oth
er
Contribution in holding back the CPI (cumulative effect of -2,34% for the period 2000-2007). More and more affordable prices to everyone
8
Global use of Mobile Telephony Services in Greece
Economic Assessment
Turnover: €4,6 billion (2007)Job creation: 92.000 positionsGDP Contribution: €4,4 billion (≈2%)Contribution to state revenues: €1,8 billion (as much as the 2008 Gov. Budget for education and industry together!)
Penetration
Depth: 168% (in 2008), starting from zero basis 16 years agoGeographic coverage: 100%Users within the population: 82%
Limited network coverage Network coverage at 99% of population Continued reduction in prices
High cost of services Rapid growth of subscribers Development of new technologies
Penetration with business customers Significant declines in prices and services
Source: Analysis by ICAP
Evolution of Mobile Telephony in Greece
Maturation and development of 3G
servicesRapid growth stage
Introduction of Mobile Telephony
in Greece
- 48 167 273 555 940 2.056
3.894
5.932 6.934
8.606
10.600 11.304
12.431
14.081
16.000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
HSDPA technology
(for high speed data transfers)
Creation of 2G networks in Greece
SMS services
Early pre-paid card phones
3GUMTS
services
GPRS (2.5G- WAP, MMS)
services
Num
ber o
f act
ive
mob
ile c
onne
ctio
ns (0
00)
To date, no other sector in the Greek economy has achieved such high market depth and accelerated penetration
9
Mobile Telephony compared to other SectorsReturn on Capital Employed
Return on Capital Employed - Greece 2007No of ROCE
Industry € mil. Companies %Trade in pharmaceuticals, cosmetics & cleaning 448 295 26,3Trade in chemicals, gases, colours and explosives 185 186 25,8Tobacco manufacturing 106 5 25,5Trade in medical and lab supplies 193 230 24,6Trade in various goods 304 433 21,7Oil and coal products 603 18 17,8Trade in electrical and electronic goods 150 272 17,5Trade in clothes, footware and leather goods 215 495 14,4Retail trade (Supermarkets) 261 233 14,1Business services 141 647 14,0IT 148 310 13,6Investment companies 140 13 13,6Mobile telephony 883 3 13,2Non metallic mineral products 464 477 10,9Pharmaceuticals, cosmetics & cleaning supplies 365 97 10,8Health care 216 258 10,0Holding 1.175 154 9,0Trade in fuel, lubricants and gases 118 117 8,9Beverages 323 143 8,7Transportation services 418 289 8,6Transportation equipment dealers 193 726 7,5Metal products 238 436 7,0Food 325 772 5,1Real estate 521 847 4,9Metallurgy 110 29 4,2Technical - Construction 383 1625 2,4Energy - Water 329 99 2,0Leasing 113 12 1,8
Sources: ICAP Data Bank, ICAP Analysis; Industries with profits greater than €100 mil.- gaming and banks have been excluded
Profits before taxUseful life of capital expenditures in different sectors
Source: AT Kearney - Mobile Industry Observatory 2008
Years7
20
25
40
41
54
60
80
80
0 10 20 30 40 50 60 70 80
Mobile telephony stations
Fixed telephony (copper)
Power stations (thermo-electric)
Power stations (lignite)
Power sub-stations
Power networks
Water processing units
Water reservoirs -Adequacts
Water supply pipelines
The Sector’s return on capital employed is average although net income is high, due to high capital expenditures with very small useful life
10
Freedom of immediate communicationAccording to the general public (66%), the main advantage of mobile telephony is the sense of freedom gained from using the mobile phone
SecurityThe sense of security is also a significant advantage because communication is possible from any place as well as in emergency situations
Perceived benefits / advantages from using the mobile phone - Spontaneous
66
10
4
1
34
37
21
Freedom to communicate anywhere and at anytime
Sense of security of being able tocommunicate from anywhere
Safety and even being saved in emergencysituations (such as health, earthquake, fire etc)
Ability of being located anywhere
Efficient management of personal andbusiness affairs
Can be used as an appliance for carrying out various activities from any place, such as
internet use and e-mail messaging
Substitute for various other appliances (suchas listening to music at any time)
Contribution of Mobile Telephony to the Public
People acknowledge the sense of freedom and security as the most basic benefit of using the mobile phone
11
OPPORTUNITIES and PROSPECTS – “THE BROADBAND CHALLENGE”Mobile telephony and Broadband The mobile phone as a broadband appliance
There are inherent variations in Greece regarding access to the internet via computers:•Geographically: possession of a computer and access to the internet is far higher in Attica than any other area in the country
•Educationally: possession of a computer and access to the internet is far higher among population groups that have secondary and university education than groups with basic or primary education
On the contrary, the possession and use of the mobile phone does not show any geographical or educational dependency, which makes the mobile phone an ideal “vehicle” to attract towards broadband applications and services the population groups which are presently cut off or are inferior
Broadband penetration per country (EU 2007) . .
Source:: 13nth progress report on communications in the EU (January 2008)
35,60%34,60%34,20%
31,20%29,80%
25,70%25,60%
23,80%23,64%23,30%
19,00%18,30%
17,40%17,30%17,10%
16,10%14,60%14,20%
9,80%9,10%8,80%8,40%
7,60%
0,00% 10,00% 20,00% 30,00% 40,00%
DKFI
NLSENOUKBEDE
EU-15FRATESIESIIT
PTCZHUROGRSKPLBG
There is enormous potential to eliminate the digital divide by means of mobile telephony
12
7/10 small enterprises and 8/10 large enterprises claim that it is impossible/ considerably difficult to carry out their business activities without the use of a mobile phone
Necessity of the mobile phone for the operation of an enterprise
13 1018
9 9 5 10 9 14
1717
17
18 1514
15 14
21
6463
6068
63 70 6360
52
6 10 5 614 12 13 18 14
Total (n=158)
Industry(n=30)
Commerce(n=60)
Services(n=68)
Total (n=422)
Industry(n=103)
Commerce(n=164)
Services(n=126)
Tourism(n=29)
Impossibleto carry outbusiness
Quitedifficult tocarry outbusiness
would bequite easy tocarry outbusiness
no need
Small Enterprises Large Enterprises
Contribution of Mobile Telephony to the Enterprises
The mobile phone has become an irreplaceable work tool – a fundamental condition for the professional success of Greek users
13
Mobile Telephony and new technologies9/10 enterprises agree that mobile telephony brings the enterprise closer to technology and development
Sense of security and efficient managementThe majority of enterprises also acknowledges the reduction in the insecurity and uncertainty of communication as well as the more efficient management / organisation of business matters
92
81
80
79
78
77
76
66
63
49
97
90
89
91
86
85
86
70
84
80
53
55
48
84
88
84
Has considerably benefited the freelancing
Mobile telephony brings the enterprise closer to technologyand development
Uncertainty and insecurity is reduced given the possibility ofaccess at work and everywhere
Leaving mobile phones ON at meetings is annoying
Work activities are organised more effectively
Mobile telephony has changed the operation of the enterpriseto the better
Improves customer relations
Use mobile phones at work for personal reasons keeps theemployee from doing his work
The enterprise operates more efficiently
Can move work anywhere by using the mobile phone
Use of mobile phones at work for personal reasons causesproblems to the enterprise
Noise in the working environment has greatly increasedbecause everyone uses his/her mobile phone at any time
Use of mobile phones for personal reasons must be permittedonly in specific areas of the enterprise
Small Enterprises (n=500) Large Enterprises (n=500)
Mobile Telephony, Enterprising and Technology
Assessment of mobile telephony’s influence on enterprises
The two highest scales(4=agree and 3=probably agree)
Mobile telephony has brought the Greek enterprise closer to technological developments and will continue to do so
14
New technologies and developmentsOverall recognition regarding the influence of mobile telephony on society with respect to parameters involving issues of familiarization with new technologies and developments, issues ofimprovement of the standard of living (as for people who live in remote areas or people with special needs and the elder) and even issues of crisis management (since mobile telephony can significantly help the work of authorities and carriers in emergency situations)
Assessment of mobile telephony’s influence on society
93
87
85
83
82
79
75
73
72
92
93
90
Mobile telephony brings us closer to technology anddevelopment
Mobile telephony has made life easier to inhabitants ofremote areas
Mobile telephony helps considerably the work of authoritiesand carriers in emergency situations
Mobile telephony has familiarized Greeks with the newtechnologies
It is annoying that some people do not turn off their mobile incinemas, theatres, presentations etc.
People with special needs and disabilities have benefittedthe most from the growth of mobile telephony
Feel unsafe because many drivers drive without using Bluetooth technology
Has specifically benefitted the elderly who live alone
It is annoying when people talk loud on their mobile in publicplaces (public transport, restaurants etc.)
Mobile telephony has changed our lives to the better
Noise in public places and public transport has increasedtremendously because everybody uses his/her mobile any
where and at any time
In general mobile telephony has brought people closer
The Public’s familiarization with technological developments
The two highest scales(4=agree and 3=probably agree)
Mobile telephony has a very positive influence on society. The familiarization with technology that it offers makes the mobile
phone ideal for broadband applications
15
Mobile vs Fixed Telephony
Usage level
Greece has the 3rd highest usage of total telecom services (fixed plus mobile) in Europe
mobilefixed
Minutes of use per person per month in fixed and mobile telephony (EU -2007)
Sources: OMSYC;IDC;Wireless Intelligence; A.T. Kearney analysis; ICAP analysis
7446
78
69
8781
100
122
105143
119
113
156153
145
238
16467
156
94
229136
150
125153
58
63
38
55
4262
62
62
92104
148
163
121135
156
65
139241
155
225
97196
184
192
264249
19
157
30
0 100 200 300 400
Slovakia
RomaniPoland
Czech
Bulgaria
LithuaniEstonia
Hungary
Portugal
SloveniBelgium
Netherla
UK
SpainFrance
Ireland
LatviaAustria
German
Italy
LuxembFinland
Switzerl
Denmar
GreeceSweden
Norway
minutes (time)
Mobile Telephony is becoming the main mode of communication as its usage has
already surpassed the usage of Fixed telephony in most European Countries
16
Growth of Data Services
Ανάπτυξη συνδρομών 2G και 3G σε 4 έτη, απο 20εκ. συνδρομές
0
20.000.000
40.000.000
60.000.000
80.000.000
100.000.000
120.000.000
140.000.000
1993/2002 1994/2003 1995/2004 1996/2005
Mobile 2G Mobile 3G
OECD mobile 2G and 3G, four year grow th from 20 million subscribers World-wide Growth of 3G
World-wide the adoption of 3G networks follows the initial growth of the 2G networks with a time lag of approximately nine years
3G usage in Greece
One in five (5) Greeks has used data services through the mobile phoneOne in eight (8) Greeks has experience in using the mobile Internet (through mobile phones or other portable wireless access appliances)
Use of data services through mobile appliances will make the economic and social convergence a reality
Use of mobile data services in Greece(Jan 2009, n=928, research by ΟΠΑ)
Non-users
Users
Trough service menus Through the internet
Growth of 2G and 3G subscriptions within 4 years, starting from 20 million subscriptions
17
Mobile Telephony and BroadbandImportance and Broadband Penetration
Greece lags considerably in Broadband penetration contrary to its successful course in mobile telephony
• Fixed broadband access lines: 9,1% in Greece relative to 20% in the Ε.U. (beginning of 2008)
• DSL Coverage: 10% relative to 89,3% in the Ε.U. (end of 2007)
• Percent of Population with internet access: 22% in Greece relative to 58% in the OECD countries (2008)
Broadband penetration is so important that this specific index is one of the 13 indices used to assess the degree of innovation within the economy of a country (the sole index with relevance
to telecommunications)
Correlation of productivity and broadband in the EU 2001 - 2004
100
200
300
400
500
600
0 10 20 30 40 50 60 70 80 90 100
% of workers with access to broadband
Prod
uctiv
ity per sector (base=100)
The spread of Broadband is a precondition for the technological development of Greece
18
Scenario A: Without revenue growth from new services:
• Contribution to GDP: 16% Reduction (1,61% in 2013 relative to 1,92% in 2007) • Contribution to employment: 12% Reduction (81.000 jobs relative to 92.000) • Contribution to State revenues: 18% Increase (€2.152 million relative to €1.819 million)
Scenario B
Scenario A
Estimated Future Contribution of Mobile Telephony
Scenario B: With revenue growth from new services:
• Contribution to GDP: 3,6% Increase (1,99% in 2013 relative to 1,92% in 2007) • Contribution to employment : 9% Increase (100.000 jobs relative to 92.000) • Contribution to State revenues : 46% Increase (€2.654 million relative to €1.819 million)
Estimate of sector's contribution to national GDP in 2013
5,91%
2,84%
6,50%
2,97%
-0,01%
3,55%
-1% 0% 1% 2% 3% 4% 5% 6% 7%
Average annual GDPgrowth (2008 - 2013)
Average annual change ifsector's GDP contribution(2008 - 2013): Scenario A
Average annual change ifsector's GDP contribution(2008 - 2013): Scenario B
current prices constant prices
Growth of broadband services Growth of the Sector Contribution to the economy
19
OPPORTUNITIES and PROSPECTS – “THE BROADBAND CHALLENGE”
CONCLUSIONS
• The ease of immediate access to unlimited sources of information through mobile broadband , at any place, establishes broadband mobile telephony as the technology of the future. The State should not remain inert to this challenge.
• The continued growth in mobile communications, particularly in the next generation of mobile broadband services, has a fundamental role to play in helping the Greek economy to overcome the present global challenges. Access to advanced communications throughout a challenging geography is a critical national objective for Greece and the Mobile Network Operators in Greece are committed to making this happen.
20
Sensitivity regarding issues of health and mobile telephony antennaeThe majority of people claim that there is a connection between danger to the health and mobile telephony antennae.However, 1/5 state that they can not know what is actually true, specifically due to the contradicting scientific studies or the insufficiency of scientific data.
Opinions regarding the dangers related to mobile telephony antennae
78 77 79 75 78 78 77 79 81 82
1 2 12
1 2 2 118 17 17 14 11 8
6 6 6 5 6 5 6 5 6 8
16 14 1515
Total(n=1000)
Men(n=491)
Women(n=509)
15-24(í=168)
25-34(í=184)
35-44(í=170)
45-54(í=151)
55-64(í=129)
65-74(í=126)
75+(í=72)
It has not been proven yetthat there is danger butsufficient data for this issueis still missing
Do not know what isactually true because thereare scientists who claimthat there is danger butothers who do not
There is no danger for thehealth of people who liveclose to a mobile telephonyantenna
There is danger for thehealth of people who liveclose to a mobile telephonyantenna
ELEMENTS OF DELAY and OBSTACLESPublic Concerns
Despite the recognition of the mobile telephony’s positive influences, users state that there is danger for the health of people
who live close to mobile telephony antennae
21
Are you concerned of possible consequences to health from radiation ? (very much/quite so)
(source: Eurobarometer)
As well, 87% of Greeks state that they are «not satisfied» with the information that is provided regarding any possible consequences to health from radiation, while the European average is at 42%
Eurobarometer 2007, Electromagnetic Fields
http://ec.europa.eu/health/ph_determinants/environment/EMF/ebs272a_en.pdf
There is more concern in Greece than in Europe
86% of Greeks are concerned about possible damage to health from radiation, while the European average is at 48%
22
Greece is last regarding broadband and turnover from related services
Source: Merrill Lynch (2008) European Wireless Matrix Q3
Share of revenues by data services
Degree of Usage
Greece still lags Europe 15 with respect to the portion of turnover produced by data services
23
ELEMENTS OF DELAY and OBSTACLESCONCLUSIONS
• Consumers must be informed of the safety and potentials of the technology they use on a daily basis for their communication and briefing (i.e. their mobile phones/computers) and the Investorsas well as the Employees of the Sector should enjoy the support of the State towards the development and viability of their Sector.
24
Reduction of bureaucracy and creation of an attractive environment for investment towards the development of 3G networks
Improvement and simplification of the legal framework respecting the development of networks and the licensing of Base StationsPolitical and social consensus based on the reports of the scientific communityTargeted campaigns for informing the publicFair tax treatment of the mobile communications services and reduction of the tax divide with the rest of Europe (annulment of the “special mobile tax”)
National targets for mobile communicationsTargeted growth of applications within the Public Administration and promotion of electronic governance with emphasis on wireless and mobile servicesFull exploitation of the digital dividend towards the attainment of real convergence of mobile communications, fixed communications and content servicesDevelopment of synergies with European policies and actions
CONDITIONS for GROWTH and FUTURE CONTRIBUTIONS
25
CONCLUSIONS
Mobile Telephony is an important and
dynamic Sector with a lot of prospects
• For years it has been the fastest growing sector of the economy
• It has contributed in essence towards the development of technological enterprising, specifically of Mass Media and of new businesses
• It has contributed in essence towards the development of suburbia and the familiarization of Greeks with the new technologies
Mobile Telephony may be the catalyst for
broadband convergence if
combined with the appropriate national
policies
• The digital divide of Greece from the rest of Europe may be bridged through the development of a “broadband culture”, specifically in remote areas of the country and for population groups with special sensitivities
• Today, the mobile phone is the only broadband appliance with global acceptance and use in Greece
Mobile Telephony must become a “priority sector”in the drawing up and the
implementation of national policies regarding
broadband
26
THE ROLE OF MOBILE TELEPHONYIN BROADBAND CONVERGENCE
56 Kifissias Ave., Maroussi 151 25 Telephone: 210 63 00 066
Fax: 210 610 60 93e-mail: info@eekt.gr
George Stefanopoulos
General Manager of ΕΕΚΤ
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