Power supplier-telephony firm partnerships altering the scene

Last week’s announcement of a strategic partnership between independent electricity supplier Heron and telecommunications company Wind, the second such power-telephony arrangement to be established within a short period of time following a deal between power supplier Protergia, a member of the Mytilineos corporate group, and Cosmote, signals the future shape of Greece’s retail electricity market. More deals involving energy and telephony companies are expected within the next few weeks as the competition intensifies.

Protergia, Greece’s biggest private-sector energy producer, and Cosmote, the country’s leading mobile telephony retailer which controls the extensive network of Germanos and Cosmote retail outlets around Greece, led the way by announcing the establishment of their partnership on June 30. It bolsters Protergia’s retail presence and promotion of products, while also offering a comparative advantage, through over 450 Cosmote and Germanos.

At present, Protergia is ranked second among the country’s independent power supply companies and is aiming for top spot. Protergia is currently offering Cosmote landline telephony customers steady electricity tariffs for two years, without surcharges, as well as a 20 percent discount for punctual payment of electricity bills. This applies to households, businesses and low-voltage industries.

The deal between Heron and Wind, announced last Thursday, will offer Heron’s products through the telephone company’s retail network of 135 outlets, beginning in autumn. Wind’s solid market share, measuring 20 percent of the mobile telephony market, will provide Heron access to a large number of potential customers.

A new trend in the Greek market, partnerships between electricity suppliers and telecommunication companies promise to offer swift access to a market numbering millions of customers at the lower possible cost.

For independent electricity suppliers, establishing partnerships with companies possessing extensive retail networks is pivotal in their plans to capture increased market shares and reach double-digit figures in the near future.

Greece’s bailout agreement requires the development of a competitive retail electricity retail market, free of monopolistic dominance.

Other main independent power supply players are expected to soon follow in the footsteps of Protergia and Heron. According to sources, negotiations between Elpedison and Vodaphone appear to be at an advanced stage.

Main power utility PPC, still dominant but now experiencing a gradual market share decline, is working on a possible partnership with ELTA (Hellenic Post), which has already been granted a power supply license and is using it to provide electricity to some of its outlets.

As for the electricity market’s smaller independent power supply players, not vertically intergrated into corporate energy groups like their bigger rivals, the picture remains unclear. These smaller firms will definitely face major challenges that will only keep growing as competition intensifies. Bigger-player takeovers of smaller companies possessing quality portfolios cannot be ruled out, while other small power suppliers left aside may need to join forces, if they manage to remain afloat, and focus on niche markets.