EETT: There is a big difference between the list prices and the final cost of mobile telephony

LAST UPDATE 11:46

The report conducted by Tarifica for the National Telecommunications and Post Commission (EETT) shows a gap between the “list prices” and the real cost of mobile telephony connections.

In particular, according to EETT, the consulting company analyzed the prices of the Greek market and in comparison with other 12 European countries with similar GDP per capita ranked our country in the four countries with the highest prices.

Tarifica then compared the prices it had collected with the detailed data of the Providers’ revenues (per service and per subscriber) in Greece. From this comparison, Tarifica found that there were large discrepancies between the publicly available prices of the Providers and the actual costs that subscribers are required to pay for their telecommunications services.

“To be precise”, states the announcement of EETT, “found that the average revenue per subscriber (Average Revenue Per User – ARPU), as shown by the market data of EETT would be mathematically impossible to achieve if the subscribers paid the advertised prices retail. Therefore, the real pricing of mobile communications in Greece is not reflected in the prices presented publicly (eg on websites) by providers “.

In the research conducted by IDATE for fixed telephony, as a basis for the price levels of fixed broadband communications in Greece, it used the criterion of average revenue per user (ARPU) considering that this gives an accurate estimate of the average price paid by consumers for services. . The calculation of the average revenue per user (ARPU) includes seasonal discounts and promotions.

In addition, IDATE has further investigated the availability of services to assess Greece’s position in terms of fixed broadband prices relative to other countries Average revenue per user as a percentage of Gross National Product (GDP). He found, among other things, that Greece has the second lowest average revenue per user (ARPU) for fixed broadband services (8.68 euros) among the 27 countries of the European Union. Greece has the third lowest average revenue per user as a percentage of GDP per month on a monthly basis among the 27 countries of the European Union.

The announcement of EETT in detail

The National Telecommunications and Post Commission (EETT) instructed two independent consulting companies of internationally recognized prestige, Tarifica and IDATE DigiWorld, to assess the current situation and express an opinion on the prices of mobile and fixed electronic communications in Greece. EETT participated in this process exclusively as a source of information and data for the market in cases where this was requested by the two companies, without expressing an opinion on the methodologies they used. These surveys are the first in a series of surveys aimed at highlighting a comprehensive and systematic picture of electronic communications pricing issues.

Both studies highlighted the difference observed in the Greek market between the prices advertised publicly by electronic communications providers through their websites (which are the source on which almost all published price comparison studies are based) and the prices Finally, they are offered to consumers as they are approached by the average revenue of providers per user (Average Revenue Per User – ARPU), which seem to be lower.

This results in comparisons of Greece with other countries only on the basis of publicly available list prices and without taking into account special offers (eg seasonal, retention and customer attraction) but also other, important factors, such as the quality of service offered and network development costs, can not easily lead to safe conclusions about the cost of electronic communications in Greece.

EETT points out that the interpretation of the results of surveys evaluating / comparing prices of electronic communications between countries must be done with a careful evaluation of the relevant methodologies so as not to create false impressions. Electronic communications are a very dynamic sector with continuous developments in the services and infrastructure sectors which are expected to continue in the future (in the context of the implementation of co-financed projects and private investments that have been announced). From the data of EETT published every six months, it appears that there is a very fast and stable trend of reducing the cost of electronic communications services in the last 4 years in our country, a fact that is confirmed by the Harmonized Index of Consumer Prices.

Specifically, with the data recently published by ELSTAT for the changes between 2020 and 2021, the index of communications, which includes mobile and fixed electronic communications (with a very large coefficient of gravity) presents with a large difference the largest annual decrease (by 2.5%) when the General Index shows an annual increase of 4.4% and most of the other indicators (other groups of goods and services) also show significant increases. For EETT, the priority remains the pursuit of the most affordable prices for consumers, ensuring the best possible quality of service.

Prices of mobile services

Tarifica first used the ‘rational’ consumer methodology, which is compatible with the methodology used by the OECD and the European Commission. Tarifica points out that simple comparisons based on criteria such as “cost per GB” (list price) and the amount of data offered per month do not provide a complete picture. The analysis was based on prices that are publicly available from providers (eg through their websites). The company in its analysis did not take into account prices resulting from retention and customer attraction offers, gifts and seasonal offers and discounts under combination programs (eg fixed-mobile services). Based on these, Tarifica’s analysis of the prices of mobile communications services in 12 European countries belonging to the same group of countries in terms of GDP per capita, concludes that Greece seems to be in the top four countries with the highest prices.

Tarifica then compared the prices it had collected with the detailed data of the Providers’ revenues (per service and per subscriber) in Greece. From this comparison, Tarifica found that there were large discrepancies between the publicly available prices of the Providers and the actual costs that subscribers are required to pay for their telecommunications services. To be precise, he found that the average revenue per subscriber (ARPU), as shown by the market data of EETT, would be mathematically impossible to achieve if the subscribers paid the advertised retail prices. Therefore the real pricing of mobile communications in Greece is not reflected in the prices presented publicly (eg on websites) by providers.

In addition, Tarifica proposes to investigate the effects of network development costs and quality of service / network speed on the formation of retail price levels, given the challenges posed by the strong seasonality of demand and the morphological relief of Greece. (eg a large number of islands). Tarifica refers to a study by the European Commission, in the context of roaming, on the costs of mobile networks, which shows that the cost of network per GByte for Greece is the second highest among the countries included in its analysis. In addition, it refers to data from the company Ookla (which have been established for service quality measurements internationally) according to which Greece is the third best in terms of service quality among the countries included in its analysis.

Prices of fixed communication services

IDATE has chosen to base its assessment of the fixed price levels of broadband communications in Greece on the criterion of average revenue per user (ARPU) considering that this gives an accurate estimate of the average price that consumers pay for services. The calculation of the average revenue per user (ARPU) includes seasonal discounts and promotions.

In addition, IDATE further investigated the availability of services for the assessment of Greece’s position in terms of fixed broadband prices in relation to other European Union countries, using the following internationally accepted weighting measures:

1. The average revenue per user as a percentage of the Gross National Product (GDP) per capita.

2. The average income per user as a percentage of the net average monthly salary (adjusted for living costs in terms of purchasing power parity).

3. The average income per user as a percentage of the minimum wage.

The comparisons based on these price accessibility criteria showed that Greece is consistently ranked in the best positions (1 – 3) among the countries included in the comparison:

– Greece has the second lowest average revenue per user (ARPU) for fixed broadband services (8.68 euros) among the 27 countries of the European Union.

– Greece has the third lowest average revenue per user as a percentage of GDP per month on a monthly basis among the 27 countries of the European Union.

Greece has the second lowest average income per user as a percentage of the average net monthly wage (adjusted for living costs in terms of purchasing power parity) among 26 countries of the European Union (excluding Malta).

– Greece has the lowest average income per user as a percentage of the minimum wage among 21 countries of the European Union.