Greece - Information and Communications TechnologyGreece – IT
Overview
After negative performances in 2014, 2015 and 2016 and stabilization signs in 2017 the Information and Communication Technology (ICT) market in Greece is showing signs of recovery.In 2017, the ICT sector remained stable at 2016 levels, showing zero growth, amounting to $6,739 billion. For 2018, the Greek ICT market is expected to show a marginal growth of 0.35% reaching a value of $6,763 billion.
Based on the European IT Observatory (EITO) 2017 sales figures, the information technology sector accounts for 31% of the ICT market total, while telecommunications accounts for the remaining 69%.
Greece has a large concentration of U.S., Greek and international ICT companies. Many companies use Greece as a hub for operations in Southeast Europe because of the size of the market and connections to other markets.
Information Technology (IT)
The IT sector consists of IT hardware equipment, IT services, and business software. IT services remains the leading category, exhibiting a slow but steady growth over the last three years, with business software also showing signs of recovery the last two years. Hardware sales continued its decline in 2017 at a much slower rate 1.5% compared to 2016 14.9% and is expected to show signs of recovery in 2018 at a positive rate of 1.9%. Overall, in 2017, the industry gained a 1.2% from 2016 and stood at $2,089 billion. It should be noted that in 2015, as in 2016, the IT market in Greece moved negatively at an average rate of 4.75%.
IT Hardware
The value of the IT hardware market is approximately $617 million, suffering a 1.5% reduction in 2017, while a growth of 1.9% is expected in 2018. The significant slowdown in the reduction rates from 2015 and 2016 are contributed mainly to the recovery in the sales of the PC subsector. The PC market is expected to increase by 7.5% in 2018, resulting in a market value of $290 million. This is a substantial recovery after a 3% decline in the market in 2017 and significant losses of 12.5% and 24.2% during 2015 and 2016, respectively. More specifically, the sales growth of Laptop and Desktop Personal Computers for both personal and professional use will continue in 2018, as was the case in 2017. The Tablets market in Greece is expected to return to a positive sign in 2018, with an increase of 8.4%, recovering from a negative 10.7% in 2017. In the rest of the categories of the Hardware Market, the Servers market is estimated to increase by 8.8% to $66 million recovering from a 12.8% reduction in 2017. Storage Systems, are expected to be negative in 2018 by 3.7%, even though the sector experienced a significant increase by 17.4% in 2017, with a market value of $27 million this year compared to $28 million last year.
IT Services
The IT Services sector grew by 2.5% in 2017 and is expected to continue to grow in 2018, reaching a market value of $1,187 million in 2018, a 3.6% increase from the previous year. IT services are comprised of IT and business consulting, system integration, network consulting and integration services, custom application development, and business process outsourcing (BPO) and all are expected to contribute positively to the growth of the sector.
Business Software
The business software market consists of application software (64%) and system infrastructure software (36%).
The market has shown signs of recovery in 2017 with a 2% increase and a market value of $326 million and is expected to maintain its momentum in 2018 with a 2.3% increase and value of $333 million. The increase is mainly driven by Applications Software.
Telecommunications
Telecommunications services, the leading category in the telecom sector, accounts for 84% of the market, with equipment accounting for the remaining 16%. In 2017, the telecommunications sector in Greece experienced a marginal decline compared to 2016 by 0.5% to $4,650 billion, with an expected reduction in 2018 of 0.8%.
Telecommunications equipment
The 4 % increase in equipment sales in 2017 is not likely to be sustained in 2018. The market is expected to decline in 2018 by a marginal 0.6 % from to $733 million in 2017 to $729 in 2018. The domestic telecom equipment market is boosted by Telecom provider investments to upgrade and expand existing 4G networks, especially in large urban areas, and infrastructure investments in fiber optic networks.
The Mobile Devices subsector in 2017 increased by 5.1% to $492 million. In 2018, the market value is expected to decline by 2.1% to $482 million.
In this category, the smartphone market increased by 5.5% in 2017 and is expected to decline by a marginal 0.5% in 2018.
Services
The Telecom Services market value decreased by 1.3% in 2017 to $3,916 billion, with a marginal decrease of 0.8% to $3,884 billion expected in 2018. From the specific subsectors of the market, Fixed Telephony Services will continue to decline by 7.8% in 2018, as it did in 2017 by 7.9%. The value of this category will fall to € 1,080 billion, from $1,170 billion in 2017. Mobile Telephony Services declined as well in 2017 by 3.6% reaching a market value of $1,092 billion and this trend will continue in 2018 by 2.4% with a market value expected to be around $1,066 billion. On the contrary, in 2018, the Mobile Data services subsector will maintain the positive trend of 2017 that has led to an increase by 9.3% with sales value of $749 million. In 2018 is expected to grow by 7.8% to $808 million.
Leading Sub-Sectors
Current environment
Greece has not captured the benefits of ICT adoption and falls below the EU average in many ICT indicators based on the European Digital Agenda. Based on the European Union‘s 2018 Digital Economy and Society Index (DESI) published by the European Commission, Greece has not made much progress relative to other member states and has progressed slightly slower than the EU average over the last year. As a result, Greece again this year, ranked second lowest among the EU28 countries for its performance in the digital economy and society. The index measures a variety of factors, including connectivity, digital skills, use of the internet by citizens, integration of digital technology by businesses, and digital public services.
All these challenges are defined and addressed by the Ministry of Digital Policy, Telecommunications and Media formed in November 2016, in the National Digital Strategy (2016-2021), as well as in the National Strategy for Administrative Reform (2017-2019), including guidelines for eGovernment and the development of digital skills for all.
Even though Greece possesses a highly-educated workforce, the country continues to suffer from a brain drain, of ICT specialists that could be crucial for supporting the digital transformation of the economy. According to estimations, the use of ICT is needed in more than 90 % of workplaces. The low percentage of people with at least basic digital skills can slow down the country’s economic development.
Government strategic targets
ICT companies in Greece are focusing on government projects that are in progress, delayed, or need to be initiated and are vital to improve the competitiveness of the Greek economy. Policy makers are facing a challenge in supporting the European digital economy strategy to enhance the use of e-Government services. The Greek Government views broadband penetration, internet use, electronic transactions, cloud-computing services, and integrated Government ERP as increasingly important.
Syzefxis II: Greek national network for the public sector:
The Government aims to upgrade the voice and data infrastructure of the public sector in Greece. Under the Syzefxis II project, the Government seeks to expand network and telephony services in approximately 34,000 buildings nationwide and implement wireless access through 55,000 government smartphones. The goal of this project is to deploy more fiber connections to include all 34,000 Greek stakeholders, with the most important state agencies operating at 100/1,000 Mbps.
The EU will provide $191 million to build the infrastructure. The three-year operational costs of $164 million per annum will be covered by national funding with an estimated budget of $684 million.
Public Sector ERP
Digital projects in Greece, both ongoing and expected to begin in the near future, include the implementation of Enterprise Resource Planning (ERP), Human Resources Management (HRMS), and public e-procurement systems to support the Government’s fiscal reform project.
Tax evasion and contraband detection systems
The new Independent Authority for Public Revenue in Greece has reactivated tenders focusing on the implementation of systems founded on the latest technologies and applications systems, which can support the Greek government in its efforts to collect revenue. These systems would enable customs, border, security, and tax collection agencies to increase tax revenue collection by deterring the contraband smuggling and VAT fraud. Automated inspection and verification of trucks, rail, and cargo containers as well as fuel-marking programs and control systems that process online real time information promise to significantly improve revenue collection.
Next Generation Access NGA)
This project aims to the deploy fast and super-fast broadband technologies in rural areas with support from EU funds. The first phase was started in 2014, with the rural broadband project, which is now in the implementation phase. The Greek rural Project is a public-private partnership More than 80 % of the project has already been implemented. The project provides remote and sparsely populated areas with broadband coverage, gradually increasing to 30 Mbps, and a future-proof infrastructure for greater speeds. So far, it has provided more than half a million people with connectivity. The total cost of the project is EUR 199.7 million (of which EUR 143.8 million from EU Structural funds). The project aims to close the ‘broadband gap’ between remote, disadvantaged, traditionally ‘white rural areas’ and the rest of the country, by providing good, affordable connectivity services.
Transition to a digital economy
Support the European Digital economy strategy by implementing digital projects to enhance e-skills, digital transactions between public administration and citizens/businesses, development of open data and creation of new opportunities for innovative SME’s and start-ups.
IT consulting
ICT consulting is a key growth area for vendors as markets mature and end-users become more knowledgeable about IT needs, risks, and technologies. Consulting firms can help the government evaluate and make decisions on systems management, infrastructure needs and solutions, as well as IT security.
Data Center Outsourcing & Integration Services
Optimization of ICT costs are realized through main or disaster recovery centers of large private- and public-sector organizations as well as service providers in Greece. It’s possible that Greece could eventually be a data center outsourcing hub in Southeast Europe.
Cyber Security
Security solutions to support projects compose a significant portion of the market, with security software, services, and infrastructure being deployed in organizations of all types and sizes. The demand for security comes mainly from three major segments that comprise the Greek market: the government, corporations, and small- to medium-sized businesses. The financial industry is leading the private sector in demand for cyber security products and services. Banks are demanding more cyber security solutions as they face increasing number of cyber-attacks.
Current environment
Greece has not captured the benefits of ICT adoption and falls below the EU average in many ICT indicators based on the European Digital Agenda. Based on the European Union‘s 2018 Digital Economy and Society Index (DESI) published by the European Commission, Greece has not made much progress relative to other member states and has progressed slightly slower than the EU average over the last year. As a result, Greece again this year, ranked second lowest among the EU28 countries for its performance in the digital economy and society. The index measures a variety of factors, including connectivity, digital skills, use of the internet by citizens, integration of digital technology by businesses, and digital public services.
All these challenges are defined and addressed by the Ministry of Digital Policy, Telecommunications and Media formed in November 2016, in the National Digital Strategy (2016-2021), as well as in the National Strategy for Administrative Reform (2017-2019), including guidelines for eGovernment and the development of digital skills for all.
Even though Greece possesses a highly-educated workforce, the country continues to suffer from a brain drain, of ICT specialists that could be crucial for supporting the digital transformation of the economy. According to estimations, the use of ICT is needed in more than 90 % of workplaces. The low percentage of people with at least basic digital skills can slow down the country’s economic development.
Government strategic targets
ICT companies in Greece are focusing on government projects that are in progress, delayed, or need to be initiated and are vital to improve the competitiveness of the Greek economy. Policy makers are facing a challenge in supporting the European digital economy strategy to enhance the use of e-Government services. The Greek Government views broadband penetration, internet use, electronic transactions, cloud-computing services, and integrated Government ERP as increasingly important.
Syzefxis II: Greek national network for the public sector:
The Government aims to upgrade the voice and data infrastructure of the public sector in Greece. Under the Syzefxis II project, the Government seeks to expand network and telephony services in approximately 34,000 buildings nationwide and implement wireless access through 55,000 government smartphones. The goal of this project is to deploy more fiber connections to include all 34,000 Greek stakeholders, with the most important state agencies operating at 100/1,000 Mbps.
The EU will provide $191 million to build the infrastructure. The three-year operational costs of $164 million per annum will be covered by national funding with an estimated budget of $684 million.
Public Sector ERP
Digital projects in Greece, both ongoing and expected to begin in the near future, include the implementation of Enterprise Resource Planning (ERP), Human Resources Management (HRMS), and public e-procurement systems to support the Government’s fiscal reform project.
Tax evasion and contraband detection systems
The new Independent Authority for Public Revenue in Greece has reactivated tenders focusing on the implementation of systems founded on the latest technologies and applications systems, which can support the Greek government in its efforts to collect revenue. These systems would enable customs, border, security, and tax collection agencies to increase tax revenue collection by deterring the contraband smuggling and VAT fraud. Automated inspection and verification of trucks, rail, and cargo containers as well as fuel-marking programs and control systems that process online real time information promise to significantly improve revenue collection.
Next Generation Access NGA)
This project aims to the deploy fast and super-fast broadband technologies in rural areas with support from EU funds. The first phase was started in 2014, with the rural broadband project, which is now in the implementation phase. The Greek rural Project is a public-private partnership More than 80 % of the project has already been implemented. The project provides remote and sparsely populated areas with broadband coverage, gradually increasing to 30 Mbps, and a future-proof infrastructure for greater speeds. So far, it has provided more than half a million people with connectivity. The total cost of the project is EUR 199.7 million (of which EUR 143.8 million from EU Structural funds). The project aims to close the ‘broadband gap’ between remote, disadvantaged, traditionally ‘white rural areas’ and the rest of the country, by providing good, affordable connectivity services.
Transition to a digital economy
Support the European Digital economy strategy by implementing digital projects to enhance e-skills, digital transactions between public administration and citizens/businesses, development of open data and creation of new opportunities for innovative SME’s and start-ups.
IT consulting
ICT consulting is a key growth area for vendors as markets mature and end-users become more knowledgeable about IT needs, risks, and technologies. Consulting firms can help the government evaluate and make decisions on systems management, infrastructure needs and solutions, as well as IT security.
Data Center Outsourcing & Integration Services
Optimization of ICT costs are realized through main or disaster recovery centers of large private- and public-sector organizations as well as service providers in Greece. It’s possible that Greece could eventually be a data center outsourcing hub in Southeast Europe.
Cyber Security
Security solutions to support projects compose a significant portion of the market, with security software, services, and infrastructure being deployed in organizations of all types and sizes. The demand for security comes mainly from three major segments that comprise the Greek market: the government, corporations, and small- to medium-sized businesses. The financial industry is leading the private sector in demand for cyber security products and services. Banks are demanding more cyber security solutions as they face increasing number of cyber-attacks.
Opportunities
Digital services can be an important force economic development in Greece. Increased digital innovation creates added value and new services for businesses and the government. ICT adoption and usage by businesses, citizens, and the public sector will contribute to financial savings, increasing government revenues, and ultimately create the conditions for new business development and job creation. The continuing development of fast internet in Greece will contribute to the increased demand for digital services that will enhance the competitiveness of the country and support employment.Greece possesses a highly-educated workforce, combining first-class technical knowledge with global experience and entrepreneurial talent. Large international software firms represented in Greece have well-established policies and methodologies to deliver projects and serve customers with strong and well-established solutions. Multinational software companies disseminate state of the art expertise in both ERP applications and specialized solutions in government, retail, logistics, utilities, and other sectors. The need to comply with international regulations and treaties, such as the International Accounting Standards, the Basel III agreement, and corporate governance rules, is anticipated to increase the demand for specialized applications software and services.
The 2014-2020 National Strategic Reference Framework (NSRF) programming for the absorption of European Union Funds is expected to be a major driver for economic and ICT market growth in Greece. The new NSRF 2014-2020 constitutes the primary strategic plan for the development of the country with the help of significant resources from the European Structural and Investment Funds. The implementation of the new NSRF seeks to address the structural weaknesses of the country that contributed to the emergence of the economic crisis. The NSRF 2014-2020 consists of 20 projects, of which 7 are sectoral and 13 regional, with $28 billion in funds to be allocated. Though there is not a distinct program in the new NSRF for ICT, as in the NSRF 2006-2013 (Digital Convergence), the effective implementation of the programs and NSRF funding is expected to positively impact ICT demand. The operational programs are Transport Infrastructure, Environment and Sustainable Development, Competitiveness Entrepreneurship and Innovation, Human Resources Development - Education and Lifelong Learning, Public Sector Reform, Technical support, Agricultural Development, and Fisheries and Maritime.
Web Resources
Ministry of Digital Policy, Telecommunications and Media
Independent Authority for Public Revenue (IAPR)
Hellenic Statistical Authority (ELSTAT)
Greek Industry Association of Communications and Technology
Foundation for Economic & Industrial Research
National Strategic Reference Framework
National Telecommunications Regulatory Authority
General Secretary for Research and Technology
International Data Corporation
Commercial Specialist:
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