Vodafone Greece is proceeding with the establishment of a subsidiary company for optical fibers, looking for opportunities within the context of the Recovery Fund, as revealed yesterday by the president and CEO, Mr. Haris Broumidis, during a press briefing. The company, which has accelerated its investments in 2022, is faced, like the entire industry, with the unfavorable economic environment, which has brought to European telecommunications increases at the level of inflation, with Greece having so far remained unscathed, something that is expected to change.
Having secured from the parent company higher resources per year compared to the announced investment program of 600 million euros until 2025, Vodafone is accelerating the development of its broadband network aiming to achieve of 100% 5G coverage in the next 2-3 years. Today, it has activated the 5G network in more than 140 cities and towns, as well as 27 islands in the country, with population coverage exceeding 50%.
Regarding fiber optics, the goal is to connect 850,000 homes and businesses with fiber optic networks in the coming years, in Athens, Thessaloniki, Patras, Volos, Ioannina, Veria and Kozani. Of these, 300,000 will be fiber to the home and the remaining 550,000 will be FTTC to outdoor cabins. Subsequently, all FTTC connections will be converted to FTTH via the new fiber optic company.
As Mr. Broumidis explained, the establishment of the new company will ensure greater flexibility, giving Vodafone the possibility to utilize a variety of financial tools, but also to proceed more easily to collaborations and synergies. It is also now clear that it will not be easy for providers who have not already secured the resources and human resources to carry out their investment plans.
Regarding the submarine cables, the connections to the Cyclades have already been completed, while the approval of the environmental conditions still remains for the connection to Corfu. At the same time, the company, expanding into Information Technology and Communications (ICT) projects, has taken on projects worth 100 million with the aim of doubling that next year.
As Mr. Broumidis pointed out, inflationary pressures, increases in energy costs and material appreciation are creating a stifling environment for telecommunications, which are seeing their operating costs rise. He estimated that the company will be burdened by these factors, by 60 million euros in the next financial year. It is typical that the cost of optical fiber has increased in some areas by 80%.
At the same time, however, as he observed, salary increases should be made to the staff, in order for them to be able to respond to the increased living needs.
He also noted that the inflationary increases in tariffs are necessary in Greece as well, even though such a thing has not yet been decided by the companies in the sector. As he explained, there is ambiguity in the statutory framework as to whether price increases in a fixed-term contract are permissible when there are reasons for inflation.
At the same time, he emphasized that the telecommunications sector is the only one that contributes negatively to inflation, remaining today 14% below. He added that data traffic on the mobile network has increased by 6,500% since 2012, while average revenue per user (ARPU) has decreased by 57% on contracts and around 40% overall across all Vodafone customers.