OTE, which launched its IPTV service in February, believes its ownership of Greek national satellite operator Hellas Sat creates a natural synergy to launch satellite pay-TV services “Satellite is an important option since it increases the potential customer base,” said Kavagias.

Hellas Sat has made no secret of its desire to get into the DTH marketplace. Hellas Sat CEO Christodoulos Protopapas told Satellite News last year that his company hoped to launch branded DTH services in Greece by early 2009. “Greece only has a pay-TV penetration of 10 percent to 12 percent. The average pay-TV penetration across Europe is more in the 25 percent to 30 percent range. There is definite room for expansion in this market,” he said.

While Hellas Sat’s goals were not met, the company announced it had been granted a pay-TV license contract by the Greek government, enabling OTE to provide subscriber TV services through its satellite, Hellas Sat 2 and become the second DTH player in the country.

According to Kavagias, the Greek telco is still discussing how its satellite pay-TV services will be branded and how closely the offering will be linked to OTE’s IPTV service, but he knows the service has growth potential.  “We believe that the digital TV penetration will increase from 8 percent of households to around 30 percent the next two years. For the next 12 months we don’t expect a major change. DTT and IPTV will gain the most subscribers,” he said.

OTE is working with Amino as its set-top box supplier, and the service will be introduced gradually in all major cities across Greece in 2009. Entry price for the service will be15 euros ($21.46) per month and offers access to broadcast channels, and on-demand content.

 “Video on demand, time-shifted TV, [local personal video recorder] and casual video games are already available as part of our Conn-x TV service. These services are important now and will become more important in the near future, when customers get more educated and informed about the features of those services and the convenience they provide. Moreover, interactive services are the competitive advantage of IPTV and cable services vs satellite and [digital terrestrial television] services,” said Kavagias.

While Greece is one of Europe’s smaller markets, OTE has acquired around 1million domestic broadband subscribers making it the country’s largest telco and giving it the resources it needs to support a new service launch. Kavagias said its Conn-x-IPTV service goals are in line with European averages. “We hope that 10 percent to 15 percent of our ADSL subscriber base will be taking TV services two to three years from launch,” he said.

In terms of expanding the service, HD services could arrive on the IPTV platform sooner rather than later. “HD is important in perception terms, however is not yet the killer service. In the near future, it could make the difference. OTE plans to launch [video-on-demand] and/or linear HD services in the short term,” said Kavagias.