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"Everyone is happy. In the Greek telecommunications company OTE it is because they will face a big player who will not "kill" the market and will allow them to avoid the regulations of the National Commission for Telecommunications and Posts. In Forthnet, it is because the share capital has been increased, there is a strong investment interest and, therefore, there will be a tomorrow. In Wind, it is because they have bought on the cheap the minority stake in the company and can block decisions and, in the worst-case scenario, they can sell their stake at a high price and make a lot of money. In Vodafone, it is because they have more opportunities to grow and control the market. In HOL, it is because they hope to become part of a larger scheme. In Emirates International Telecommunications (ΕΙΤ), it is because they can eventually regain some of the money invested in Forthnet. And banks are happy because Vodafone is one of the most creditworthy investors in the world."

This is how an expert in the field of telecommunications comments on, for the online edition of To Vima newspaper, the recent developments related to Forthnet, the share capital of which already involves the Arabs from EIT with 44.022%, Wind with 33 %, Vodafone with 6.51% and the Foundation for Technology and Research with a smaller percentage.

According to the expert, in the next period, a "trench war" to control Forthnet will start between Wind and Vodafone, which, at the same time, holds a share in the equity of Hellas Online (HOL), competitor of the first two companies.

It should be noted that, according to sources, HOL and Vodafone have agreed on exclusive co-operation in fixed and mobile telephony, which however does not prevent Vodafone from acquiring a stake in another telecommunication company.

The paradoxes and the bet

An experienced market observer talks about "various paradoxes that ultimately are not as absurd as they seem", since Forthnet, a company that constantly reports losses and forms debts, has attracted substantial investor interest when "the bet is the concentration of the market".

The two players in mobile telephony, namely Wind and Vodafone, are starting an "arm wrestling", each of them for its own sake and for its own reasons, to take the lead of this process.

According to the same source, the largest telecommunications provider in the world, Vodafone, has already invested in fixed telephony, trying to expand its market presence through this aggressive move.
 
On the other hand, Wind, which has no charges and has liquidity, is controlled by shareholders who seek a better return on investment through the development of the company and the increase in its value.

As stated by the expert, these two players with totally different philosophies will negotiate with the Arabs of ΕΙΤ for buying Forthnet. Clearly, the big shareholder will prefer the one who offers better conditions.

According to a senior representative of the market, in the event that the offer of Vodafone is preferred, this will create a new player with 1.5 million subscribers (one million from Forthnet and half a million from HOL) to fixed telephony, "who will look the Greek telecommunications company OTE straight in the eye", and therefore "2.5 players" will appear on the market.

A possible variant of this scenario is for Vodafone to acquire HOL’s trademarks Forthnet/Nova and Cyta, which will be serviced by a single stationary network, that of HOL being the possible preference.

Furthermore, this may be a portent of a greater involvement of Vodafone in HOL, which is already making profits and has become significantly more flexible, since it has transferred the staff of Customer Operations, Retail Sales and Retention departments to a third company.

If Wind prevails, the same source continues, "then we will have a market with three players ", i.e. the bipolar Vodafone-HOL, the Greek telecommunications company OTE and the Wind-Forthnet tandem.
 
In any case, according to sources from the banking sector, "the Vodafone scenario" is perfect as it will offer guarantees and will be particularly creditworthy as a shareholder. In technical terms, however, it is believed that Cyta, HOL and Wind are in a better position compared to Forthnet.

What are the Greek telecommunication company and the two perpetual "Gladiators" interested in?

At the same time, there is an increasing interest in the development of events on the part of OTE, but for other reasons. The creation of a big alternative player automatically raises the issue of deregulation of the telecommunications operator, as it will no longer have a dominant position in the market.

According to senior officials of OTE, this will allow the telecommunication company to aggressively come out in the market, lower the prices and directly compete with the alternative players. It is unable to do so today because the National Commission for Telecommunications and Posts must approve each of its programmes in the field of fixed telephony.

On the other hand, Vodafone, which officially announced on Thursday its participation in Forthnet, amounting to 6.51% (7.1 million shares), remains silent. "The acquisition of that share in Forthnet is part of the total investment of the company and it will expand our strategic capacities for the provision of unified communications," reads the official release.

Moreover, the Vodafone group, after the sale of Verizon in the U.S., has huge liquidity and Vodafone Greece has secured additional resources from the parent company to increase its investment by 40% and to participate in "Project Spring", which was announced a few months ago in Europe by Executive Director of Vodafone Group Vittorio Kolao.

Regarding Wind, everything seems bright. The good thing is, as noted by senior officials, that it holds 33% of Forthnet and, being a minority shareholder, can control the future business activities. "Our interest is a fact", they note, emphasizing that Wind’s investment in Forthnet is extremely profitable since it has bought 33% of the company for 15 million euro whereas the other contenders have spent a lot of money to strengthen their positions in the company.

However, the other alternative players forecast that Wind will be ready to give everything in the battle to acquire Forthnet, because if it stays out of the race it will probably be isolated from the structural changes in the domestic market and the opportunity to provide a package of four services (Internet, fixed and mobile telephony and television), an area that will probably dominate in the coming years.