Notification of Draft Measures Pursuant to Article 7(3)

of Directive 2002/21/EC (Framework Directive)

for the markets of

Localandnationalvoicecallsprovidedatafixedlocationfor residential and non-residential customers in Greece(voice calls to geographic numbers in Greece), and

Callstonon-geographicnumbersprovidedatafixedlocationforresidentialandnon-residentialcustomersin Greece (fixed calls to mobile and calls to non-geographic numbers of Service Providers)

EETT has conducted an analysis of the markets for publicly available local and/or national telephone services provided at a fixed location for residential and non residential customers.in Greece (markets 3 and 5of the Old Recommendation), in accordance with the obligations listed in Article 16 of Directive 2002/21/EC (Framework Directive).

In the context of its Market Definition and Analysis procedures with regard to the aforementioned markets, EETT is carrying out, in parallel, a European and National Public Consultation on Market Definition, Analysis and proposed Remedies, commencing onNovember 26, 2010.

EETT hereby notifies the Commission of its proposed measures in accordance with Article 7(3) of Directive 2002/21/EC. The proposed findings are set out in the attached Summary Notification form.

Responses are invited and may be sent to the following address by one month after the date of notification:

EETT

60 , Kifissias Avenue

Maroussi, 151 25

Athens, Greece

Email address:

Summary Notification Form

SECTION 1 - Market definition

1.1 / Affected relevant product/ service markets.

Local and national voice calls provided at a fixed location for residential and non-residential customers in Greece (voice calls to geographic numbers in Greece).This market is not listed in the Commission’s Recommendation of 2007 [E(2007) 5406, December 17th, 2007]. See chapter 3.

Calls to non-geographic numbers provided at a fixed location for residential and non-residential customers in Greece (fixed calls to mobile and calls to non-geographic numbers of Service Providers).This market is not listed in the Commission’s Recommendation of 2007 [E(2007) 5406, December 17th, 2007]. See chapter 3.

1.2 / Affected relevant geographic market.

The relevant geographic market for both markets is Greece. See chapter 3 (paragraph3.8)

1.3 / Brief summary of the opinion of the National Competition Authority where provided.

Not applicable. By power of the Greek Law on Electronic Communications (Law 3431/2006 ‘On Electronic Communications and other provisions’ [National Gazette No13/03.02.2006]) and more specifically Art.12f competence on Competition law matters with regard to the Electronic Communications sector lies with the EETT and not with the Hellenic National Competition Authority (NCA).

1.4 /

Overview of the results of the public consultation on market definition.

Not applicable.

1.5 /

If the defined relevant market is different from those listed in the Recommendation on relevant markets, a summary of the main reasons, which justified the proposed market definition.

The marketsfor publicly available local and/or national telephone services provided at a fixed location for residential and non residential customerswerelisted in the annex to Recommendation 2003/311/EC of 11 February 2003, while they are not listed in the annex of the Commission’s Recommendation of 2007. EETT applied the three-criteria test in order to assess whether, on the basis of national circumstances, the markets of:

  • Local and national voice calls provided at a fixed location for residential and non-residential customers in Greece (voice calls to geographic numbers in Greece), and
  • Calls to non-geographic numbers provided at a fixed location for residential and non-residential customers in Greece (fixed calls to mobile and calls to non-geographic numbers of Service Providers)

are still susceptible to ex ante regulation. In this context, EETT considered the following:

  1. There are highand non-transitory barriers to entry in the form of high sunk costs which are needed in order for a new entrant to enter the markets. In addition, OTE enjoys significant economies of scale and scope in supplying retail voice calls services. Finally, there are significant barriers to the migration of a subscriber from one operator to another.
  2. There are no structural factors and market characteristics and developments that indicate tendency towards effective competition. This is also verified by the current market shares and their evolution.
  3. The application of competition law alone would not adequatelyaddress the market failure(s) concernedin the form of excessive or predatory prices.

Concluding, since the three criteria are cumulatively fulfilled for both markets, EETT proposes to define these specific markets as markets that are still susceptible to ex ante regulation. See chapter 4.

SECTION 2 – Designation of Undertakings with Significant Market Power

2.1 /

Names of undertakings designated as having individually or jointly SMP

ΟΤΕ has been designated as having SMP in the relevant markets for:

1)Local and national voice calls provided at a fixed location for residential and non-residential customers in Greece (voice calls to geographic numbers in Greece), and

2) Calls to non-geographic numbers provided at a fixed location for residential and non-residential customers in Greece (fixed calls to mobile and calls to non-geographic numbers of Service Providers)

See chapter 5.

2.2 /

Criteria for SMP designation

  • Marketshares
  • Barriers to Entry and Potential Competition
  • Countervailing Buying Power
  • Anti-competitive practices

See chapter 5.

2.3 /

Main undertakings in the relevant markets

OTE

2.4 /

Market shares of undertakings mentioned above & basis of their calculation

1)Local and national voice calls provided at a fixed location for residential and non-residential customers in Greece (voice calls to geographic numbers in Greece). OTE’s market share based on traffic volume (call minutes): 68%. See chapter 5 (paragraph 5.2.1).

2)Calls to non-geographic numbers provided at a fixed location for residential and non-residential customers in Greece (fixed calls to mobile and calls to non-geographic numbers of Service Providers). OTE’s market share based on traffic volume (call minutes): 81%. See chapter 5 (paragraph 5.2.2).

2.5 /

Summary of the opinion of the National Competition Authority

Not applicable. By power of the Greek Law on Electronic Communications (Law 3431/2006 ‘On Electronic Communications and other provisions’ [National Gazette No13/03.02.2006]) and more specifically Art.12 competence on Competition law matters with regard to the Electronic Communications sector lies with the EETT and not with the Hellenic National Competition Authority (NCA).

2.6 /

Results of the public consultation on SMP designation and proposed remedies

Not applicable.

SECTION 3 – Regulatory Obligationς

3.1 /

Legal basis for the obligations

Article 16 and 17 of the Universal Service Directive, Articles 16, 17, 35, 36, 37, 38, 39, 42, 43, 44, 45 of Law 3431/2006 ‘On Electronic Communications and other provisions’ [National Gazette No13/03.02.2006].

3.2 /

Regulatory obligations

The following obligations are proposed to be imposed on OTE:

  1. Retail price controls, in the form of:
  • A Retail Price Cap for the most types of retail calls. The Price Caps should be limited to OTE’s standard tariffs. OTE shall be obliged to notify EETT with all the pricing modifications (concerning either the retail tariffs of the retention fees) and shall not proceed to their appliance before EETT’s approval with a formal Decision.
  • An obligation to provide costing data for the retail calls services.
  • An obligation to continue to apply the existing FDC-CCA (i.e., fully distributed costs) methodology for cost accounting purposes.
  1. An accounting separation obligation for all calls.
  2. Transparency measuresfor all retail calls.
  3. A non-discrimination obligation for all calls.
  4. An obligation not to unreasonably bundle services, followed by an obligation of OTE to submit in advance to the EETT information regarding, the introduction of new single and/or multi-play offers which include retail call services or the modification of existing ones. The above stated submission should include all the necessary data required for the economic analysis of those offers. The burden of proof is on OTE that the new or modified offers do not generate predatory pricing or margin squeeze practices. The screening for predatory or margin squeeze practices will be conducted according to the methodology described in Annex A (already approved by the Commission, SG-Greffe (2010) D/13175, on 27-08-2010) of this Notification.

Seechapter 6 (paragraph 6.7) and Annex A.

3.3 /

“Exceptional circumstances” for remedies proposed other than those set out in Articles 9 to 13 of Directive 2002/19/ EC

Not applicable.

SECTION 4 – Compliance with International Obligations

4.1 /

Obligations to be imposed, amended or withdrawn as provided for in Article 8(5) of Directive 2002/19/EC

Not applicable

4.2 /

Undertakings concerned

Not applicable

4.3 /

International commitments entered by the Community & its MemberStates that need to be respected

Not applicable

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