Review of the Net Cost of Universal Service in Greece for the years 2012 – 2016

Project executed on behalf of Hellenic Telecommunications & Post Commission (EETT)

Project Objective

Directive 2002/22 of the European Parliament and of the Council of 7 March 2002 “on Universal Service and users’ rights regarding electronic communications networks and services“, also known as the “Universal Service Directive” established a legal basis for countries in the EU to ensure that electronic communications services reach underserved areas. Importantly, under the Directive, the operator providing services to these underserved areas receives an economic compensation for the losses incurred. The Directive was transposed in Greece by Law 3431/2006, mandating the designation of a Universal Service Provider throughout the whole Greek territory. As a consequence, the National Regulatory Authority, EETT, presented in its Decision 556/36/2010 the methodology the designated universal service provider should follow in the calculation of its so-called “Net Cost of Universal Service” and its related compensation.

Against this background, the objective of the project was to ensure that the results and calculations of the Net Cost of Universal Service (NCUS) prepared by the designated Universal Service Provider for the years 2012-2016 were in accordance with the principles, criteria and conditions laid out in EETT’s determinations, and to verify the adequacy of the data, assumptions and calculations used.

Project Description

The project involved the following, among other, activities:

  • Review of the alignment between the methodology presented by the designated Universal Service Provider for the calculation of the net cost of universal service (NCUS) and the methodology approved by EETT in previous decisions.
  • Analysis of the compensation requested by the designated Universal Service Provider for the different NCUS components:
    • Cost associated with telephony services provided through copper networks in unprofitable areas
    • Discounts for people with disabilities (AMEA)
    • Costs associated with directory and enquiry services
    • Costs associated with public payphones
  • Review of the indirect benefits associated with the provision of the universal services (including brand enhancement, ubiquity, and brand advertisement in public payphones).

Key Takeaways

Our work in this project allowed EETT to comprehend the actual cost of complying with the Universal Service Obligations for the years 2012, 2013, 2014, 2015 and 2016 and to rule accordingly.