EETT decision puts Forthnet as a mobile provider (MVO)

By its decision, EETT (National Telecommunications and Post Commission) imposes on Cosmote and Vodafone the framework for Forthnet's activity in mobile telephony as a virtual provider (Mobile Virtual Network Operator - MVNO), defining the basic terms of a commercial agreement.

Η This decision theoretically paves the way for other entities that may wish to enter the mobile market as virtual providers, a development that could significantly differentiate the telecommunications market data.

However, in order for this to happen, the view of the existing providers that there is not enough room for MVNOs to operate will be "tested" beforehand because the prices are already low, due to the competition between the three companies. So far this result has not been overthrown with the controversy being that the wholesale prices proposed by the mobile providers are responsible.

The only company that operated as MVNO in Greece was Cyta after a commercial agreement with Vodafone. As it is known, Cyta was later acquired by Vodafone.

Characteristic are what the president and CEO of Wind, Nasos Zarkalis, said at the last Infocom conference, commenting on the first information regarding this decision - EETT's intervention: "I have welcomed many who want to become virtual providers, they are just coming, they analyze the market and see that the prices are so low that they can not ensure a viable model and they leave "he noted and added:" The example of Cyta is typical. "Its entry into mobile as a virtual provider did not contribute to the viability of its business model."

The decision of EETT is a consequence of an appeal by Forthnet which during the discussions with Cosmote, Vodafone for a long time was not satisfied with the conditions it set. Similar discussions have taken place with Wind, which was terminated by Forthnet itself, not continuing as it does with the other two companies.

Cosmote, Vodafone as well as Forthnet received the final text of EETT's decision last Friday and now their reaction is expected.

From the side of Cosmote, executives note that they are studying the decision and it is too early to make public their opinion. The same is reported by Vodafone, adding that the measures imposed by the Commission are not justified by the facts of the case, nor by the general market conditions. Information indicates that the matter is very likely to reach regular justice.

However, until any legal action is reached and if Forthnet moves to request the activation of the decision of EETT, the two companies are obliged to proceed with the process of drafting a contract for the disposal of their network.

Forthnet may contact both parties and then decide to seek a commercial agreement with one of them. In fact, the decision of the Commission, in addition to the various fees, explicitly states that from the moment the request for the use of the network is made, within one month an agreement must be concluded and notified to EETT.

Regarding whether Forthnet has the ability to make this investment, at a time when its sale process is pending and it is looking for liquidity, its executives state that the initial goal is to provide the mobile service to its existing subscribers. They add that it has the infrastructure of interconnection and pricing and any investment "is as far as possible".

It is estimated that the above development may be the occasion to clarify the landscape in the negotiation process between the creditor banks that recently increased their stake in Forthnet to 36% and Vodafone - Wind that have submitted a bid for its acquisition.

As commented by executives of the telecommunications market it is as if there are parallel universes. On the one hand, the telecommunications company is facing a financing problem and has been sold for at least 14 months. A tender is underway with a single candidate consortium of its two competitors which does not end (in other words there is no one else interested in investing in it to stay as it is). At the same time, its management is promoting its expansion into new services, seeking a commercial agreement with features that would not be given voluntarily by the counterparties, among which are the candidates to acquire it.

At the same time, Forthnet has a commercial agreement with the two candidate companies to acquire it, according to which Vodafone - Wind has access to Nova TV content.

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