This week, with a brief statement, Forthnet and HOL announced the end of another round of merge negotiations. The companies have allegedly discussed a few more times in the past the potential for a merger. Until now they haven’t been able to reach a concluding agreement.
HOL on the one hand, has substantially invested in infrastructure, both backbone and access. The company has leveraged on major government co-financing and expanded service coverage to almost half of the Greek territory. They are currently, based on reported figures, the second broadband provider in terms of customer base.
Forthnet on the other hand, has invested on the content market. With the acquisition of NOVA a few years back they are the only service provider with access to high-quality content, although they have not yet been able to bundle it with their broadband services, in operational and marketing terms. They also have an extensive national presence, however they clearly fall behind HOL in terms of coverage.
A merge between the two companies would create the third major service provider in the country, widening, significantly the gap between the prime players and the rest of the crowd. In effect, a joint company between HOL and Forthnet (with the support of Vodafone, which already collaborates with HOL) would combine two powerful business models (one based on access coverage and another based on content delivery) and would create an integrated alternative service provider that for the first time in the modern telecommunications history of the country could directly compete with the incumbent.
The catch: A merge between HOL and Forthnet would completely alter the national competition conditions and would most likely lead EETT to revoke some of the regulatory provisions in telephony and broadband markets, allowing OTE to become more aggressive with its own offerings.
