US embassy cable - 05ATHENS445

UNCLAS ATHENS 000445 
 
SIPDIS 
 
STATE FOR EB/CIP 
USDOC FOR ITA/MAC/EUR/CALVERT 
USDOC FOR ITA/MAC/EUR/OEE/EED/JBURGESS 
 
E.O. 12958: N/A 
TAGS: ECPS, EINV, GR 
SUBJECT: TRANSPORTATION AND COMMUNICATIONS MINISTER ON 
INTERNET PENETRATION IN GREECE AND OPPORTUNITIES FOR 
INVESTMENT 
 
 
SUMMARY 
-------- 
 
1.  In a February 7 meeting, Transportation and 
Communications Minister Liapis informed the Ambassador about 
projects to expand broad band connections to the Greek 
regions and install optical fiber rings in 50 cities.  He 
said that participation by U.S. firms in these projects would 
be welcome, and GoG tenders will be announced in the near 
future.  Liapis also vowed that the GoG will take steps to 
implement EU directives on telecommunications deregulation. 
End Summary. 
 
2.  In a February 7 meeting with Minister of Transportation 
and Communications Mikhalis Liapis, the Ambassador inquired 
about efforts to extend internet penetration in Greece. 
(Note:  Greece has the lowest internet penetration in Europe: 
only 19.6 percent for private households and 20 percent for 
Greek businesses).  The Ambassador noted that wider diffusion 
of internet usage would make Greece more attractive to U.S. 
investors, especially firms offering financial services or 
wishing to use Greece as base to extend to other Balkan 
countries.  Minister Liapis pointed out that high costs and 
the limited availability of broad band connectors are among 
the main obstacles to wider internet usage.  (Note: The state 
telecom company (OTE), which has a near monopoly on Greece's 
telecom backbone infrastructure, is notorious its for high 
interconnect fees and poor service). 
 
3.  Liapis noted that his government is taking advantage of 
EU-sponsored information society intiatives to encourage 
private companies and public agencies to invest in 
information technology.  There is a 185 million euro fund 
(co-financed by the GoG and the EU Third Community Support 
Framework) to extend broadband access to regions outside 
Athens and Thessaloniki.  He said Greece would welcome 
participation by U.S. companies in preparing the feasibility 
studies for that project.  He said there are plans to install 
optical fiber rings in 50 Greek cities, and that GoG will 
announce tenders for that project in the near future. 
 
4.  Liapis said the government's objective is to absorb EU 
funds earmarked for IT programs as quickly as possible. 
(Note:  Over the past year, the GoG reportedly approved about 
30 IT projects with a budget of 100 million euros.  The 
information society program announced by the GoG on February 
1 has a total budget of 2.7 billion euros, including EU 
community support funds and companies' contributions to be 
invested by 2006).  Liapis also stated that GoG is ready to 
apply EU directives on IT and fulfill its obligations. 
 
5.  Comment:  Last year, the EC was forced to take Greece to 
the European Court of Justice because of its failure to 
incorporate several EU directives regarding the deregulation 
of the telecommunications market.  The EC has also taken 
Greece to task for lack of progress in promoting IT 
investments that would help the country converge with its EU 
partners. It appears that the government, prompted by EU 
criticism as well as the need to enhance Greece's 
competitiveness and attractiveness for FDI, is taking some 
long overdue steps to address the country's shortcomings in 
the diffusion of computer and telecommunications 
technologies. 
 
WALLES