large drop in both their revenues and earnings, as
providers cut down on their capital expenditures
in an effort to shore up their profitability. It is esti-
mated that the sales of telecoms equipment in
Greece decreased by 50% in the past ten years,
dropping by an impressive 25% in 2009! That
year, telecom equipment and telecom terminal
(telephone handsets, routers etc.) sales were
estimated at slightly above €1 billion, as com-
pared to €1.4 billion in 2008.
The drop in the telecom equipment market result-
ed from capital expenditure cuts by telecommuni-
cation service providers. When the digitization of
OTE’s network was completed in the early 2000s,
the market plummeted, mostly hitting the incum-
bent’s two major suppliers, Siemens and
Intracom. New investments in broadband net-
works undoubtedly boosted telecom and network-
ing equipment sales during the three-years from
2005 to 2007. Since then, though, investments in
fixed telecommunication equipment started to
shrink, decreasing by 30% in the three-year peri-
od 2008-2010. The OTE group alone reduced its
capital expenditure by 34% during this period ―
from €1.1 billion in 2007 to €720 million in 2010.
The drop in capital spending is visible in both
fixed and mobile telephony. After having invested
€500 million in 2008, Cosmote invested a mere
€370 million two years later. Similarly, the invest-
ments of its parent company (OTE SA)
decreased, during the same period, from €311
million to €225 million.
However, the deterioration of the telecom equip-
ment suppliers’ fundamentals is also due to other
factors: the strategic decision of Germany’s
Siemens to exit the ITC market, in conjunction
with its involvement in the “black funds” scandal
that broke out in Greece, led to the company’s
complete withdrawal from this market. Only the
Nokia Siemens Network has retained a part of its
activities. Moreover, the exit of Motorola and a
series of other suppliers from the telecoms mar-
ket led to a major reshuffle in the Greek telecom
equipment market.
Trade with Greece
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