SUMMARY FINANCIAL INFORMATION...

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1 TABLE OF CONTENTS 1 SUMMARY FINANCIAL INFORMATION FORTHnet S.A. SUMMARY RESULTS FORTHnet S.A. SUMMARY BALANCE SHEET FOR YEARS FORTHNET SUMMARY CONSOLIDATED FINANCIAL INFORMATION SUMMARY CONSOLIDATED RESULTS SUMMARY CONSOLIDATED BALANCE SHEET, YEARS INFORMATION ABOUT THE COMPILATION OF THE ANNUAL REPORT AND THE COMPANY S AUDITORS INFORMATION ABOUT LISTING COMPANY SHARES ON THE ATHENS STOCK EXCHANGE GENERAL INFORMATION USE OF CAPITAL RAISED PERFORMANCE ON THE STOCK MARKET SHAREHOLDERS RIGHTS GENERAL DIVIDEND TAXATION INFORMATION ABOUT FORTHNET S.A GENERAL INFORMATION ABOUT THE COMPANY HISTORY SCOPE OF ACTIVITIES INTERNET Services Telecommunication Services Fixed wireless access service DATA Services FORTHnet TelephonyServices Combined Services Agreed Service Level Services Consultancy services On Site Services Distribution Network and Telecommunication Services Sales Promotion Financial Information Services SMART (Stock Market in Real Time) WebSMART SMART SMS SMART i-mode ÉR Solutions Content and Value Added Services - ASP The FORTHnet portal (FORTHnet.gr) Road Map City Guide Services i-mode Services Former INTERNET HELLAS Services Former HELLASNET Services Public sector Accounts Department Customers NETWORK INFRASTRUCTURE Network Topology Network upgrading telecommunications infrastructure building Telephony service provision infrastructure ADMINISTRATIVE LICENSES General Licensing Special Licensing RESEARCH and DEVELOPMENT FORTHnet S.A R&D Department projects FORTHnet service management, billing and provisioning system (FOBIA) Network Management, Operation Support Systems Research Projects in the e-learning, e-tourism, Intelligent Transport, mobile Internet sectors Project Management FIXED ASSETS - GUARANTEES AND REAL SECURITIES Intangible Assets Land and Buildings Mechanical Equipment/Network Equipment Adjustment in the Book Value of FORTHnet S.A. Fixed Assets Third party agreements Guarantees and Real Securities Insurance Coverage SHARE CAPITAL DEVELOPMENT OWNER S EQUITY BOOK VALUE OF SHARES SHAREHOLDERS MANAGEMENT - ADMINISTRATION PARTICIPATION OF BoD MEMBERS & MAIN SHAREHOLDERS IN THE ADMINISTRATION AND/OR CAPITAL OF OTHER COMPANIES

2 6.13 ORGANIZATIONAL CHART COMPANY STRUCTURE STAFF EMPLOYED INVESTMENT POLICY Participating interests ACTIVITY REPORT ACTIVITY ACTIVITIES - RESULTS FINANCIAL EXPENSES APPROPRIATION OF PROFIT BEFORE DEPRECIATION ANALYSIS OF FINANCIAL SITUATION FINANCIAL RATIOS SOURCES AND USES OF FUNDS CASH FLOW STATEMENT CONSOLIDATED FINANCIAL STATEMENTS FORTHNET CONSOLIDATED FINANCIAL STATEMENTS DURING THE PERIOD ( ) CONSOLIDATED BALANCE SHEET ADJUSTED RESULTS CONSOLIDATED CASH FLOW STATEMENT AFFILIATED COMPANIES GROUP OF COMPANIES CHART AFFILIATED, RELATED AND OTHER COMPANIES ASSOCIATED WITH FORTHnet S.A FORTHnet S.A. - Subsidiaries FORTH-CRS S.A MEDITERRANEAN BROADBAND ACCESS S.A TELEMEDICINE TECHNOLOGIES S.A FORTHnet S.A. Related Companies FORTHe-com S.A ATHLONET S.A Other participating interests KNOSSOS TECHNOLOGIES S.A INA S.A SAFENET COMPANIES WITH PARTICIPATING INTERESTS IN FORTHnet S.A Minoan Lines S.A Foundation for Research and Technology (É.Ô.Å.) Cyprus Development Bank Telecom Italia Group TABLE OF INTER-COMPANY TRANSACTIONS INFORMATION ABOUT THE COMPANY S RECENT DEVELOPMENTS AND PROSPECTS DEVELOPMENTS DURING FINANCIAL YEAR LONG-TERM OBJECTIVES - PROSPECTS DIVIDEND POLICY Appendices

3 1 SUMMARY FINANCIAL INFORMATION 1.1 FORTHnet S.A. SUMMARY FINANCIAL INFORMATION Amounts in thousand PUBLISHED FINANCIAL INFORMATION Sales from: Commercial Activity Service Provision 27, , , Total Turnover 28, , , Gross Profit (before depreciation) (1) 12, , , Other Operating Income Total 13, , , Operating Result (before depreciation) (1) 2, , , EBITDA 3, , , Profit before Depreciation and Taxes 3, , , Profit before Taxes -3, , Profit after Taxes and BoD Remuneration -3, , Profit after Taxes, BoD Remuneration and Taxes from Prior Years Tax Audits -3, , Total Dividend (net of taxes) Weighted Number of Shares (2) 14,949,710 15,736,698 16,525,370 Number of Shares at End of Year (4) 15,097,528 16,525,297 16,851,695 Amounts in FIGURES PER SHARE (3) EBITDA Profit before Depreciation and Taxes Profit before Taxes Profit after Taxes and BoD Remuneration Profit after Taxes, BoD Remuneration and Taxes from Prior Years Tax Audits Dividend per Share (5) Notes: 1. The Company incorporates part of the depreciation carried out each year in the cost of sales, administrative expenses, distribution costs, research and development costs, and the financial cost. This allocation, for the period , is shown in the following table: Amounts in thousand ALLOCATION OF DEPRECIATION Cost of Sales 4, , , Administrative Expenses 1, , Distribution Costs Research & Development Costs Financial Cost TOTAL 6, , , The following have been taken into account for weighting the number of shares at the end of each year: changes in the nominal value of shares (reduction in the nominal value from 1,000 GRD ( ) to 400 GRD ( 1.17), and the 3

4 increase from 400 GRD ( 1.17) to GRD ( 1.18)), increases in share capital through cash payment and capitalization of reserves, and share capital increases by Public Subscription. 3. Figures per share have been calculated on the basis of the weighted number of shares. 4. The number of shares at the end of the year has been adjusted only with respect to the reduction of the nominal value of each share from 1,000 GRD ( ) to 400 GRD ( 1.17), and the increase from 400 GRD ( 1.17) to GRD ( 1.18). 5. Based on the number of shares at the end of the year. 1.2 FORTHnet S.A. SUMMARY BALANCE SHEET FOR YEARS Amounts in thousand BALANCE SHEET FIGURES Net book value formation expenses 11, , , Intangible Assets 5, , , Less: Depreciation 1, , , Net book value Intangible Assets 4, , , Tangible Assets 40, , , Less: Depreciation 8, , , Net book value Tangible Assets 32, , , Participating Interests and other Long-term financial assets 22, , , Total Fixed Assets 59, , , Current Assets 20, , , Prepayment and Accrued Income 1, , , TOTAL ASSETS 93, , , Owner s Equity 61, , , Provisions , Long-term Liabilities 18, , , Current Liabilities 12, , , Total Liabilities 30, , , Accruals and Deferred , , TOTAL OWNER S EQUITY & LIABILITIES 93, , , Accounting Value of Shares * In order to calculate the accounting value of each share, the number of shares at the end of each year was taken into consideration, adjusted retroactively only with respect to: a) the reduction in the nominal value of each share from 1,000 GRD ( ) to 400 GRD ( 1.17), in accordance with the decision of the General Assembly of shareholders on , and b) the increase in the nominal value from 400 GRD ( 1.17) to GRD ( 1.18), in accordance with the decision of the General Assembly of Shareholders on

5 2 FORTHNET SUMMARY CONSOLIDATED FINANCIAL INFORMATION 2.1 SUMMARY CONSOLIDATED RESULTS The Company compiled consolidated financial statements for the first time in Its consolidated financial statements included Hellas Net S.A. Consolidation was carried out according to the full consolidation method. In year 2000, consolidation included FORTHe-com S.A. and TERRATEC S.A.; participating interests in the latter were acquired on The company s annual results have been included in the consolidation results. Consolidation was carried out according to the full consolidation method. In year 2001, consolidation included the following subsidiaries: a) HELLAS NET S.A., b) FORTHe-com S.A., c) TERRATEC S.A., and d) FORTH-CRS S.A., included in consolidation for the first time. Consolidation was carried out according to the full consolidation method. In year 2002, consolidation included the following subsidiaries: a) HELLAS NET S.A., b) FORTHe-com S.A., c) TERRATEC S.A., and d) FORTH-CRS S.A. The following companies were included in consolidation for the first time: e) MEDITERRANEAN BROADBAND ACCESS S.A. and f) TELEMEDICINE TECHNOLOGIES S.A. Consolidation was carried out according to the full consolidation method. In year 2003, consolidation included the subsidiaries: a) HELLAS NET S.A., b) FORTHe-com S.A., c) FORTH-CRS S.A. d) MEDITERRANEAN BROADBAND ACCESS S.A., e) TELEMEDICINE TECHNOLOGIES S.A. and f) INTERNET HELLAS S.A., which was acquired on 30/12/2003 (100%) and was included in consolidation for the first time. Consolidation was carried out according to the full consolidation method. In year 2004, consolidation included the following subsidiaries: a) FORTH-CRS S.A., b) MEDITERRANEAN BROADBAND ACCESS S.A., and c) TELEMEDICINE TECHNOLOGIES S.A. During this period, the parent company acquired subsidiary companies HELLAS NET S.A. and INTERNET HELLAS S.A. Consolidated results for years are presented in the following table: Amounts in thousand Sales from: PROFIT & LOSS STATEMENT Commercial Activity 1, Service Provision 30, , , Total Turnover 32, , , Gross Profit (before depreciation) 14, , , Other Operating Income Total 15, , , Operating Result (before depreciation) 3, , , Income from Participating Interests EBITDA 4, , , Profit before Depreciation and Taxes 3, , , Profit before Taxes -4, , Profit after Taxes and BoD Remuneration -4, , Profit after Taxes, BoD Remuneration and Taxes from Prior Years Tax Audits -3, , Total Dividend (net of taxes) Weighted number of shares 14,949,710 15,736,698 16,525,370 5

6 Amounts in FIGURES PER SHARE (1) EBITDA Profit before Depreciation and Taxes Profit before Taxes Profit after Taxes and BoD Remuneration Profit after Taxes, BoD Remuneration and Taxes from Prior Years Tax Audits Dividend per Share (2) Notes: 1. Based on the weighted number of shares. 2. Based on the number of shares at the end of the year. 2.2 SUMMARY CONSOLIDATED BALANCE SHEET, YEARS Amounts in thousand BALANCE SHEET FIGURES ASSETS Net Book Value Formation Expenses 14, , , Net Book Value Intangible Assets 15, , , Tangible Assets 49, , , Depreciation 8, , , Net Book Value Tangible Assets 40, , , Participating Interests , Other Long-term financial assets Total Net Book Value Fixed Assets 56, , , Total Current Assets 27, , , Prepayment and Accrued Income 1, , , Total Assets 99, , , LIABILITIES Owner s Equity 64, , , Provisions , Long-term Liabilities 18, , , Current Liabilities 15, , , Total Liabilities 33, , , Accruals and Deferred , , Total Owner s Equity & Liabilities 99, , ,

7 3 INFORMATION ABOUT THE COMPILATION OF THE ANNUAL REPORT AND THE COMPANY S AUDITORS This Annual Report contains all information and figures necessary for correct evaluation of the property, financial situation, results and prospects of the HELLENIC TELECOMMUNICATIONS AND TELEMATIC APPLICATIONS COMPANY S.A. or FORTHNET S.A. (hereinafter FORTHnet S.A. or the Company ) by its investors and their investment consultants. This report is provided free of charge to investors. Investors who are interested in further information may contact the following during working hours: Company offices, no. 4, Atthidon St, , Kallithea, telephone (Mr Giorgos Dermitzakis, Head of Shareholder and Announcement Services, Mr Giorgos Karakovounis, Chief Accountant, and Mr Thomas Koubouras, Corporate Reporting & Budgeting). The drafting and distribution of this Annual Report was carried out in accordance to the provisions of valid legislation. The Boards of Directors of the Athens Stock Exchange and the Capital Market Committee have been notified of the report s content, which covers investors information needs, as defined by the provisions of Decision 5/204/ of the Capital Market Committee Board of Directors. The following persons are responsible for the drafting of the Annual Report and the precision of the details it contains: Mr Pantelis Tzortzakis, Chief Executive Officer, address: 4, Atthidon St, Kallithea, tel Mr Giorgos Karakovounis, Chief Accountant, address: 4, Atthidon St, Kallithea, tel The Company s Board of Directors hereby states that all its members have been notified of the content of this Annual Report, and, together with its editors, hereby declare that: All the information and figures contained herein are complete and true. There are no other details, and no events have taken place, the concealment or omission of which could render all or part of the information and figures contained in the Annual Report misleading. There are no contested issues or issues under arbitration, or decisions of legal or arbitrational bodies affecting the Company's financial situation Regular Audit The Company is audited by Certified Auditors. In years 2001 and 2002, the audit was carried out by Certified Auditors Mr Antonis G. Sifakis (SOEL Reg. No ) and Mr Nikolaos Moustakis (SOEL Reg. No ) of SOL ERNST & YOUNG S.A., 2-4 Messogion Avenue, Athens, telephone: In year 2003, the audit was carried out by certified auditor Mr Stavros K. Saloustros (SOEL Reg. No ) of SOL S.A. Mr Stavros K. Saloustros also audited the Company s consolidated financial statements for 2004, the cash flow statements and the consolidated cash flow statements. The Certified Auditors Accountants Audit Reports for 2004 are included in the attached Annex, below the published Balance sheets and Profit & Loss Accounts. The observations included in the Certified Auditors report and relating to the Company s financial statements, and the Company s notes for 2004 balance sheet are: 1) Capital raised ( 47,793,103.00) by the company through public subscription in year 2000, through the Athens Stock Exchange, was appropriated by The last appropriation table for capital raised, together with the relevant confirmation issued by the Certified Auditors has been published. 2) In the closing financial year, the Share Capital was increased with cash contributions of 385, and the issuance of 326,398 new shares, through stock options exercised by FORTHNET Group staff. The above increase produced a premium of 842, (GG 81/ ). 3) In the closing financial year, subsidiary companies HELLAS NET S.A. and INTERNET HELLAS S.A. were acquired by the parent company, under Transformation Balance Sheets dated (GG 7560/ ), based on the provisions of C.L. 2190/1920 and L. 2166/93. Therefore, the previous year s Assets and Liabilities accounts do not include the relevant accounts of the two absorbed companies. It is noted that the debit difference of 6,155, arising from the transformation, between the acquisition value and contributed capital of the two acquired companies was offset by the Share premium account in accordance with the provisions of article 29, L. 3091/2002 and POL 1038/ of the Ministry of Finance. 4) There are no real charges on the Company's fixed assets. 5) There are no contested issues or issues under arbitration, or decisions of legal or arbitrational bodies affecting the Company's financial situation. 6) The same accounting principles as those applied by the company in the previous year were applied for the compilation of the Financial Statements. 7) At 31/12/2004, the company employed 557 persons. 8) Company investments in fixed assets for the closing financial year amount to around 8.9 million. 7

8 9) The analysis of sales as per Statistical Code 2003 is as follows: Statistical Code 642.0: 51,186,855.69, Statistical Code 726.0: 24,297, and Statistical Code 518.4: 583, The observations included in the Certified Auditors report and relating to the Company s financial statements are as follows: 1) The company, applying the provisions of PD 299/2003 (establishment of a new independent sector for provision of Fixed Voice Telephony services), did not carry out depreciation as in the previous financial year (commencement of productive activity of the new sector in year 2002) on the sector s fixed assets, to a total amount of 5,160, Euro until , with a benefit of 2,694, and 2,466, to the results of the year 2004 and 2003 respectively. 2) Accounts Participating interests in affiliated undertakings and Participating interests in other undertakings include the acquisition value of participating interests in ten joint stock companies not listed on the ASE. The financial statements of four of these, with an acquisition value of participating interests of 417, Euro (1.76%) are not audited by a Certified Auditor. The valuation of participating interests was made at the acquisition value, in accordance with the provisions of the Books and Records Code. If it had been made according to the provisions of cod. L. 2190/1920, a provision of 1,897, Euro should have been made against the results of previous years, and a provision of 282, against this year s results. 3) In our opinion, the provision for doubtful debts amounting to 1,000,000.00, should have come to around 1,800,000.00, of which 1,200, should have been subtracted from prior years results, and 600, from this year s results. 4) As in the previous year, the shares (securities) in the company s portfolio were valued at their current value, on the basis of the provisions of L. 2992/2002, and the result (profit) arising from valuation ( 34,637.88) was included directly in the Net Position. 5) The company has not been tax audited for the years 2003 and 2004 and neither have the acquired companies INTERNET HELLAS SA & HELLAS NET SA for the years & respectively; therefore its tax obligations have not been finalized. The observations included in the Certified Auditors report and relating to the Company s consolidated financial statements, and the Company s notes to the 2004 balance sheet are: 1) Consolidation includes the subsidiary companies: a) COMPUTER SYSTEMS FOR ELECTRONIC MANAGEMENT AND SERVICE DISTRIBUTION S.A. (FORTH-CRS), b) MEDITERRANEAN BROADBAND ACCESS S.A. and c) TELEMEDICINE TECHNOLOGIES S.A. 2) Capital raised ( 47,793,103.00) by the parent company by public subscription in 2002 through the Athens Stock Exchange was appropriated in its entirety by , and the last appropriation table for capital raised has been published, together with the relevant confirmation of the Certified Accountants. 3) In the closing financial year, the parent company s Share Capital was increased with cash contributions of 385, and the issuance of 326,398 new shares, due to stock options exercised by FORTHNET group staff. The increase produced a share premium account of 842, (GG 81/ ). 4) In the closing financial year, subsidiary companies HELLAS NET S.A. and INTERNET HELLAS S.A. were acquired by the parent company, under Transformation Balance Sheets dated (GG 7560/ ), based on the provisions of C.L. 2190/1920 and L. 2166/93. Therefore, the previous year s Assets and Liabilities accounts do not include the relevant accounts of the two acquired companies. It is noted that the debit difference of 6,155, arising from the transformation, between the acquisition value and contributed capital of the two acquired companies was offset by the Share premium account in accordance with the provisions of article 29, L. 3091/2002 and POL 1038/ of the Ministry of Finance. 5) There are no real charges on the fixed assets of the Group s companies. 6) There are no contested issues or issues under arbitration, or decisions of legal or arbitration bodies affecting the financial situation or operation of the Group. 7) The same accounting principles as those applied by the company in the previous year were applied for the compilation of the Financial Statements. 8) At 31/12/2004, the Group employed 613 persons. 9) The company s investments in fixed assets for the closing financial year amount to around 11.9 million. 10) The analysis of sales as per Statistical Code 2003 is as follows: Statistical Code 642.0: 51,186,855.69, Statistical Code 726.0: 28,456,193.02, Statistical Code 518.4: 587, and Statistical Code 519.0: 283, Notes included in the Certified Auditors report and relating to the Company s consolidated financial statements, are as follows: 1) Account Participating interests in other undertakings amounting to 1,220, include the acquisition value of participating interests in seven joint stock companies not listed on the ASE. The financial statements of three of these are audited by a Certified Auditor. The valuation of participating interests was made at the acquisition value, in accordance with the provisions of the Books and Records Code. If it had been made according to the provisions of cod. L. 2190/1920, a provision of 585, Euro should have been made against the results of previous years, and a provision of 252, against this year s results. 2) The parent company and the two companies mentioned in note no. 1 (a and b) applied the provisions of PD 299/2003 (on new business or sectors) and did not carry out depreciation on certain tangible assets, as in the 8

9 previous year. If depreciation was calculated on those fixed assets, it would come to 6,692, Euro, of which 3,271, concern the previous year. 3) In our opinion, the provision for doubtful debts amounting to 1,000,000.00, should have come to around 1,890,000.00, of which 1,290, should have been subtracted from prior years results, and 600, from this year s results. 4) As in the previous year, the shares (securities) in the company s portfolio were valued at their current value, on the basis of the provisions of L. 2992/2002, and the result arising from valuation 34, was included directly in the Net Position. 5) The parent company and subsidiary FORTH-CRS S.A. have not been tax audited for years 2003 & 2004, while subsidiary MEDITERRANEAN BROADBAND ACCESS S.A. has not been tax audited since its establishment (i.e. year 2001); therefore the group s tax obligations have not been finalized. Tax audit FORTHnet S.A. has been tax audited up to financial year 2002 and its financial figures have been deemed final, honest and precise. The tax audit carried out for years by the National Auditing Centre (NAC), under Audit Order 796/ , concerned the determination of all tax obligations (Income Tax, Books & records Code, VAT, Stamp duties, Withholding taxes) and was completed on 29/04/2004. This audit revealed accounting differences amounting to a total of 871, Euros and Income Tax of 216, Euros was charged, as well as other taxes (VAT, Stamp Duties, Taxes implied on Real Estate, Withholding Taxes) of 95, Euros, i.e. a total of 312, Euros, to burden the 2004 results for appropriation. Taxes for the period resulting from the Tax Audit are presented in the following table: Amounts in TAXATION DIFFERENCES AND TAXES FOR YEARS Corresponding year Accounting differences 261, , , Total Accounting Differences 261, , , Income Tax imposed on Accounting Differences * 105, , Withholding Taxes, VAT, stamp duties, etc. 87, , , Total Taxes and other charges 192, , , * No tax was imposed on accounting differences for year 2002 as the acknowledged tax losses must be covered first. 3,272, Euros of the 3,579, Euros of tax losses declared were acknowledged. It is noted that the Company has not been tax audited for years 2003 and 2004, and therefore its tax obligations for that financial year cannot be considered final. Tax audit of Acquired Company HELLAS NET S.A. HELLAS NET S.A. has been tax audited up to year 2002; its financial information have been judged final, true and precise. The tax audit carried out for years by the Piraeus District Auditing Centre (PEK) by virtue of Audit Order no / , concerned the establishment of all types of tax liabilities (Income Tax, Books and Records Code, VAT, Stamp duties, Taxes withheld, etc.) and was completed on 14/05/2004. Taxes arising from the Tax Audit for the period , which were charged to the results for appropriation in year 2004 are shown in the following table: TAX DIFFERENCES, YEARS YEAR Accounting Differences 21, , , Total Accounting Differences 21, , , Income Tax imposed on Accounting Differences * 10, ,

10 Withholding Taxes, VAT, Stamp duties, etc. 10, , Total Taxes and other charges 20, , * No tax was levied on the 2002 accounting differences, because the taxation losses acknowledged must be first covered. A taxation loss of 45, out of the 86, declared was acknowledged. Information about Public offers The Company did not submit a public purchase or exchange offer for another company s shares during the previous and current financial year, and no third parties made similar offers for the Company s shares. List of persons authorized to trade on the ASE following relevant notification In accordance with the provisions of article 8, decision no. 5/204/ of the BoD of the Capital Market Committee, the persons and affiliated companies (article 42, paragraph 5, Law 2190/1920) permitted to trade FORTHnet S.A. shares or Company derivatives listed on the Athens Derivatives Market, having first notified the Company s Board of Directors and published a relevant announcement on the ASE s Daily Price Bulletin, are shown below. Name Pantelis Tzortzakis Panagiotis Papadopoulos Manolis Sylligardakis Georgios Dermitzakis Michalis Tsaggatakis Georgios Karakovounis Stavros Saloustros Spyridonas Boundas FORTHe-com S.A. Forth-CRS S.A. Telemedicine Technologies S.A. ATHLONET S.A. Mediterranean Broadband Access S.A. Foundation for Research and Technology Maria Sarandopoulou Styliani Danelaki Despina Vezakidou Irene Mylona Themistoklis Giannakopoulos Markos Pitsaris Position in Company Member and Chief Executive Officer Internet & Public Sector Manager Telecommunications Manager Head of Shareholder and corporate announcement Service Legal Department Manager Chief Accountant Certified Auditor Assistant Certified Auditor Affiliated Company Affiliated Company Affiliated Company Affiliated Company Affiliated Company Shareholder with more than 20% participation Legal Department Legal Department Legal Department Legal Department Legal Department Internal Auditing Disputes - Arbitration FORTHnet s pending judicial claims against third parties come to 29,599, of which 26,707,222 constitute a claim from the Company against OTE, by virtue of the Company s lawsuit dated , relating to the positive losses it claims to have suffered as a result of the EPAK issue, 293, concern a Company claim against OTE for moral damage suffered, and 2,598, constitute Company claims against debtors. Third party pending claims against the Company come to 202, It is noted that there are pending judicial claims against two Group companies that have been acquired, while the pending judicial claims of those companies against third parties come to 93,635.80, for which there is contractual commitment from a shareholder in one case and a third vendor company, in order to cover the Company in case of a negative outcome. Furthermore, there is another pending claim by a third co-defendant against another FORTHnet subsidiary, worth 31,710.70, while that company s pending claim against third co-defendants is 158, Appeals have been made to the Council of State against decisions of the Telecommunications Regulatory Authority; these cases are pending and it is impossible to predict their impact on financial results, because it is estimated that even if one or all of these appeals produces a favorable outcome, the file will be returned to Administration, which will reconsider the critical fees. Except for these cases, there are no other contested issues or issues under arbitration, or decisions issued by legal or arbitration bodies affecting the Group s financial situation. 10

11 4 INFORMATION ABOUT LISTING COMPANY SHARES ON THE ATHENS STOCK EXCHANGE 4.1 GENERAL INFORMATION The Company s share capital is equal to 19,885, Euros, and is divided into 16,851,695 shares, with a nominal value of 1.18 Euro each. 4.2 USE OF CAPITAL RAISED Capital raised in year 2000 from the increase in the Company s share capital by Public Subscription and Private placement, for its listing on the ASE Main Market, came to 47,793,103. With respect to the use of capital raised, this has been confirmed by the Company s Certified Auditors, Mr A. Sifakis (SOEL Reg. No ), and Mr N. Moustakis (SOEL Reg. No ) of SOL ERNST & YOUND S.A., and has been notified to the ASE. According to the Certified Auditors statement, capital raised through public subscription and private placement in September 2000 (General Assembly decisions 25/8/99, and ) due to the cash increase of share capital, came to the net amount of 45,116,591. Total Public Subscription capital was 47,793,103, and expenses came to 2,676,512. All capital raised was allocated by The following table shows how the capital raised was allocated. DISTRIBUTION OF RAISED CAPITAL (amounts in thousands ) Expected use of capital according to the Annual Report Investments based on a revised investment plan approved by the General Meeting on 30/06/2001 Investments based on a revised investment plan approved by the General Meeting on 29/06/ TOTAL TOTAL TOTAL 16/9/00-31/03/02 Actual Investments 1/4/ /6/2002 Total amount of distributed capital (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) Building purchase and maintenance Voice services telephony Know-how purchase for new services development Formation and participation in other companies share capital Upgrade and extension of Network Expansion of the company abroad Purchase international national capacity of and Issuance expenses TOTAL Non distributed capital (bank deposits, time deposits, repos, securities etc) GRAND TOTAL

12 4.3 PERFORMANCE ON THE STOCK MARKET The Company s share was listed on the ASE on , at a starting price of Euro; the closing price of the Athens Stock Exchange General Index was 4, points. From the start of negotiation and up to , GI performance has exceeded share (+35%). 16,00 14,00 12,00 10,00 8,00 6,00 4,00 2,00 FORTHnet ÃÄ /10/00 15/2/01 28/6/01 2/11/01 14/3/02 26/7/02 3/12/02 16/4/03 1/9/03 12/1/04 21/5/04 28/9/04 3/2/05 0 In 2004 the performance of the Telecommunications index exceeded share performance (+30%). 130% 120% 110% 100% 90% 80% 70% FORTHnet ÄÔË 60% 2/1/2004 2/2/2004 2/3/2004 2/4/2004 2/5/2004 2/6/2004 2/7/2004 2/8/2004 2/9/2004 2/10/2004 2/11/2004 2/12/2004 2/1/

13 For the period 2/1/2004 (closing price 5.62) to 31/12/2004 (closing price 5.10), return on the share was -9%, with an average daily volume of transactions equal to 25,789 shares. 7, ,00 5,00 4,00 3,00 2,00 1,00 FORTHnet ¼ãêïò /1/04 9/2/04 16/3/04 23/4/04 28/5/04 5/7/04 9/8/04 14/9/04 19/10/04 24/11/04 29/12/04 3/2/05 10/3/05 19/4/05 13

14 5 SHAREHOLDERS RIGHTS 5.1 GENERAL Each Company share incorporates all the rights and obligations established by Codified Law 2190/1920 (hereinafter called the Law ) and the Company s Articles of Association, which do not, however, contain any provisions more restrictive than foreseen by Law. Holding the title to a share automatically entails the holder s acceptance of the Company s Articles of Association and the legal decisions of the General Assembly of Shareholders, regardless of whether the particular shareholder participated in those assembly. The Company s Articles of Association do not contain special rights for specific shares. Company shares are freely negotiable. A negotiation unit consists of a title of 10 shares. Shareholder liability is limited to the nominal value of the shares each shareholder holds, and they shall participate in the Company s administration and profits proportionately and in accordance with the provisions of the Law and the Articles of Association. The rights and obligations arising from each share shall accompany it to any total or particular successor of the shareholder. Shareholders exercise their rights in relation to Company administration through General Assembly only. Shareholders have preference rights to any future Company share capital increase, not occurring through a contribution in kind, or issuance of a bond with the right to convert to shares, proportionately to their participation in the existing share capital, as defined in article 13, par. 5, CL 2190/20. Shareholders lenders and their successors may not, under any circumstances, confiscate or seal any of the Company s assets or books, or request its allocation or liquidation, or become involved in its administration or management. All shareholders, irrespective of their domicile, are considered to be resident at the Company s head-office, for the purposes of their relationship to it, and are subject to Greek legislation. Any dispute between the Company on the one hand, and shareholders on the other, is subject to the exclusive competence of ordinary courts of law, and the Company may be prosecuted only before the courts in the area of its registered office. Each common share gives right to one vote. Joint owners of common shares must notify the Company of their joint representative in order to vote at the General Assembly; they may not exercise their rights until such a representative has been appointed. Each shareholder is entitled to participate at the General Assembly of Company shareholders, either in person or by proxy. In order to participate in the General Assembly, the shareholder must submit a declaration from the Central Securities Depository S.A. in accordance with article 51, Law or a declaration corresponding to a declaration from the above company, to the Company s Treasury, at least five (5) days prior to the date of the General Assembly. Share deposit receipts and representation documents must also be submitted to the Company within the same deadline, and the shareholder must receive a receipt for entry to the General Assembly. Shareholders not complying with the above participate at the General Assembly of permitted to do so by the latter. Shareholders representing 5% of paid-up share capital may request: The Court of First Instance at the company s head-office to audit the Company in accordance with article 40, 40e, law 2190/1920. Convocation of an Extraordinary General Assembly of Shareholders. The Board of Directors must call the Extraordinary General Assembly within 30 days from submission of the request to the chairman of the BoD. Shareholders requesting the convocation of an Extraordinary General Assembly of shareholders must include the issues to be discussed at the assembly in their application. 10 days prior to the Ordinary General Assembly, any shareholder may ask for the Company s annual financial statements and the relevant reports from FORTHnet s BoD and auditors. All shareholders recorded in the Shareholders Register, kept by the company, on the date of approval of the Company s annual financial statements by the Ordinary General Assembly of shareholders, or as determined, are entitled to dividends. Share dividends are payable within 2 months of the date of the Ordinary General Assembly that approved the annual financial statements. The payment method and location are announced in the Press. Dividends not claimed within 5 years from their payable date are prescribed in favour of the State. 14

15 The provisions of the Regulation on the Operation and Clearing of the Central Securities Depository s Intangible Titles System, as currently valid, shall apply with respect to the procedure of share submission for Shareholder participation at the General Assembly of the Company s shareholders and the dividend payment procedure. On the basis of P.D. 82/96, the Company announces that: Our Company hereby announces that it must comply with the provisions of P.D. 82/1996 on the nominalization of its shares and the determination of the full details of its shareholders (name, address) down to the last physical person. The same obligation is imposed by the Law on the joint stock companies who are our shareholders. For those joint stock companies holding our shares, who have not proceeded with the nominalization of their shares down to the last physical person as per the above decree, sanctions shall consist in the privation of their rights to participate and vote at the General Assembly of the Company, as well as of any property right arising from their status as shareholders. These rights are recovered only when the above shareholders nominalize their shares and provide the necessary information for the definition of their shares down to the last physical person, in the case of joint stock companies, as per paragraph 3, article DIVIDEND TAXATION According to valid Legislation (L. 2238/94, article 109), companies whose shares are listed on the ASE are burdened with a 35% tax (except financial institutions) on their taxable profits prior to any appropriation. Thus, dividends are distributed from profits already taxed to the legal person, and therefore shareholders have no tax obligations with respect to dividends collected. The date of approval of the Balance Sheet by the General Assembly of Company shareholders is considered the receipt date for dividend income. It is noted that, according to the provisions of the Law, of the profit made each year by subsidiary companies, for which a dividend is allocated, the dividend corresponding to the parent company is paid in the next financial year (unless a predividend is paid in the same year), and is therefore included in the parent company s profits for the next year. Dividends from the parent company s profits partially formed by the allocated profits of the companies in which it has participating interests, if appropriated, are paid in the year following their receipt. 15

16 6 INFORMATION ABOUT FORTHNET S.A. 6.1 GENERAL INFORMATION ABOUT THE COMPANY HELLENIC TELECOMMUNICATIONS AND TELEMATICS APPLICATIONS COMPANY S.A., or FORTHnet S.A., was established in November 1995 (GG: 6718/ ) by the FOUNDATION FOR RESEARCH AND TECHNOLOGY (ITE) and MINOAN LINES S.A. The Company s head-office is in the Municipality of Heraklion, Crete, at Vassilika Vouton (GG: 6718/ ), where the Company has offices, in the Scientific & technological Park of Crete, tel , fax The Company s headquarters are located at number 4, Atthidon St., Kallithea, , Athens, telephone , fax The Company is registered in the S.A. Register under number 34461/06/B/95/94. Its term is set at 20 years from its date of registration in the S.A. Register ( ). This term can be prolonged or abridged by decision of the General Assembly of Shareholders. According to article 3 of its articles of Association, the company s objective is to provide telecommunication services and electronic information and communication systems, to develop and use all available telecommunication network technical infrastructure in Greece and abroad and to develop all other related activities. In particular, the Company s objective is achieved through the following activities: Provision of all telecommunications services provided freely, in accordance with valid legislation, to the public. Provision of voice telephony and similar services. Provision of data transfer services by data package or circuit transfer, or simple capacity reselling. Provision of interconnection services and access for individual computers or sub-networks to the network backbone developed by the Company, in any possible existing or future way, to the general public or to businesses, for the exploitation of advanced information services provided by the company network, the international cooperation of interconnected Internet networks, and other international networks. Provision of telematics applications development services, in order to expand the market and aid customer competitiveness. Provision of Consultancy services, elaboration of studies and implementation of projects on communications and telematics applications, both in Greece and abroad. Provision of services required for interconnecting data networks in Greece or abroad, especially in the Balkans, Cyprus and the Eastern Mediterranean in general. Provision of all types of financial services, combined transportation, e-commerce services and other similar services. Research and development in accordance with the Company s articles of Association, focusing on the improvement of services provided and the introduction of new services, both in Greece and abroad. Introduction, sale, construction, installation and maintenance of telecommunications equipment relating to the Company s statutory objectives. Training and similar activities, relating to modern IT and telecommunications services. Development of special telecommunications applications for interconnecting ships and shipping enterprises. Development, use and exploitation of telecommunications networks, and creation of telecommunications infrastructure in accordance with the terms of valid legislation. Company participation in all similar enterprises, companies and joint ventures in Greece or Abroad, whether existing or under establishment. Representation of domestic or foreign companies, for telecommunications and IT products and services. All other activities relating to the aforementioned objective. The General Assembly of amended the statute by adding the following to the Company s activities: Provision of all types of financial services, combined transportation, e-commerce services and other similar services. The General Assembly of amended the statute by adding the following to the Company s activities: 16

17 Provision of voice telephony and similar services. The Ordinary General Assembly of shareholders of amended the statute by adding the following to the Company s activities: Representation of domestic or foreign companies, for telecommunications and IT products and services. According to the classification of the National Statistics Department (Statistical Code 2003), FORTHnet SA s activity comes under sector Telecommunications and Other activities relating to IT. In particular, the Company is involved in the following sectors: Fixed telephony services Internet Services: access, promotion and advertising, value added services. Telecommunication services Frame Relay services for voice transfer to closed user groups and inter-corporate network, data transfer services through Virtual Private Networks (VPNs), voice telephony services. Stock Market Information Services Stock Market in Real Time (SMART) The Company has been granted a general license by the EETT (National Committee for Telecommunications and Post) for operation of a telecommunications network, provision of Data Network services, Internet services, information and other services (e.g. faxing etc.), as well as voice and data unification services for inter-corporate networks and closed user groups, as mentioned in more detail in the Administrative licenses chapter. Also, according to plenary decision no. 198/ of the EETT, FORTHnet S.A. was granted a special License for Installation of a Wired Public Telecommunications Network. The above special license was later amended to include the provision of public fixed voice telephony services, using numbers from the National Numbering Plan, in accordance with Plenary Decision 214/23 of the EETT, dated Based on the above amended special license, EETT decision number 215/43/ assigned Carrier Selection Code 1789, through which FORTHnet provides voice telephony services. Within the framework of the above licenses, FORTHnet was assigned further geographical and non-geographical numbers. Also, based on the share transfer agreement dated signed between FORTHnet S.A. and TELECOM ITALIA INTERNATIONAL N.V., by which the latter assigned its entire participating interest in the share capital of MEDITERRANEAN BROADBAND ACCESS S.A. to FORTHnet S.A., FORTHnet S.A.s participating interest in MEDITERRANEAN BROADBAND ACCESS S.A. came to 100%. By virtue of plenary decision number 203/ of the EETT, Mediterranean Broadband Access S.A. holds a Special License for installation and commissioning and exploitation of a Fixed Wireless Access Public Telecommunications Network, and provision of Fixed Public Voice Telephony. Moreover, it has been granted the use of the radio frequency section: 24885MHz MHz and MHz, as well as twenty-two (22) individual radio frequencies in the 18 GHz and 23 GHz zones, under a special License, for installation of a Microwave Network. To consult documents concerning the Company and referring to the Annual Report, please contact the company at no. 4 Atthidon St., Kallithea, Athens. 6.2 HISTORY The Company was established in November 1995 by the FOUNDATION FOR RESEARCH AND TECHNOLOGY (ITE) and MINOAN LINES S.A. FORTHnet S.A. is a new Company, which owes a lot to the experience of its founders, and especially ITE, the largest research foundation in Greece, which has been involved in network activities since 1984, when it created the first network backbone in Greece, providing selected users (universities, research centres, etc.) with connections to UUCP and EARN/BITNET networks, the most popular computer networks at the time. The establishment of FORTHnet S.A. in October 1995, the experience and familiarity of ITE with the sector combined with the business know-how of Minoan Lines S.A., gave new impetus to network development and improved services provided. In July 1997, the Cyprus Development Bank joins ITE and Minoan Lines S.A. as a Company shareholder, with a share of 20%. In January 1999, FORTHnet S.A. collaborates with Sterling Commerce (the largest inter-corporate e-commerce company internationally), Delta Pliroforiki, Alpha Ventures, ASYK and Golden Hills, to establish FORTHe-com, which is active in the e-commerce field, commissioning and developing an Electronic Clearing Centre. In August 1999, Interamerican Hellenic Life Insurance and Intertrust S.A. obtain participating interests of 10.14% and 1.78% respectively in the Company s share capital. 17

18 In December 1999, the Company purchases 75% of the share capital of Hellas Net S.A., active in the Internet sector. Its services mainly concern the provision of Internet connection services, website development, and the development of applications allowing Internet Banking and e-commerce solutions for on-line stores. Moreover, the company offers Internet Advertising services, thus providing an integrated communication strategy for electronic businesses. At the same time, the Company cooperates with Minoan Lines S.A. and TerraTec S.A. in order to establish FORTH-CRS S.A. In February 2000, FORTHnet S.A. acquires a participating interest of 41.88% in Telemedicine Technologies S.A., whose head-office is in Paris. The company s objective includes the creation, implementation and sale of services and products relating to the (mainly electronic) acquisition, transfer and provision of information relating to the health sector. The company aims to implement and sell services in the health sector, with particular emphasis on business-to-business services in the medical field, and related activities. The establishment of the company is the result of FORTHnet s Research and Development Department s activities under the European Ten Telecom programme. In October 2000, all FORTHnet SA s shares (14,805,000 shares) are listed on the Athens Stock Exchange Main Market. Also in October 2000, FORTHnet obtains 90% of the share capital of TerraTec S.A. The company s main activities include research, development and sale of electronic software products of all formats and types, and provision of consultancy and support services with regard to methods, procedures, technology and training in particular. In November 2000, FORTHnet cooperates with STET International Nederlands NV S.I.N. (Holding Company-100% Telecom Italia subsidiary through which Telecom Italia holds all its international participating interests in fixed network and infrastructure companies), to create Mediterranean Broadband Access S.A., with participating interests of 60% for Telecom Italia and 40% for FORTHnet SA. Also in November 2000, FORTHnet acquires a 15% participation in the share capital of ATHLONET S.A., whose objective includes sports information provision through electronic or other media, especially through the Internet and the sportnet hub. In December 2000, FORTHnet cooperates with OTE, Hellas Com International SA, Intracom SA, Intrasoft SA, Siemens SA, Panafon, Info Quest SA, Altec SA and the Federation of Northern Greek Industries, to establish INA SA, the Institute for Telecommunications and IT Research and Study in South-eastern Europe. The company s objective is to study the organization and structure of telecommunications markets in South-eastern Europe, investment opportunities and training needs in the telecommunications sectors in those countries, to monitor developments in the institutional framework and market liberalization processes, and to observe the business activities of their Telecommunications Organizations. In December 2000, Mediterranean Nautilus, Telecom Italia s first datacom project in the Mediterranean, extends to Greece, through the takeover of a strategic share (5%) by FORTHnet. During the same period,, Mediterranean Broadband Access S.A., which was established at the end of 2000 by the Telecom Italia Group and FORTHnet S.A., obtains a license to use Fixed Wireless Access frequencies (WLL) at 26 band GHz throughout the Greek territory. By virtue of Plenary decision number 203/ of the EETT, Mediterranean Broadband Access S.A. holds a Special License for installation, commissioning and exploitation of a Fixed Wireless Access Public Telecommunications Network, and provision of Fixed Public Voice Telephony. Moreover, it has been granted the use of the radio frequency section: 24885MHz MHz and MHz. Mediterranean Broadband Access S.A. obtained its license through an auction procedure, for 2,920,000,000 GRD. This particular license is important for developing the business-to-business broadband service sector, via IP and FORTHnet S.A. telecommunications services, as well as the synergies created by the international framework of Mediterranean Nautilus S.A. On 11/12/2000, the EETT approves FORTHnet s investment plan and grants a Special Telecommunications Infrastructure License for the creation of an optical fibre network. Decision number 198/ of the EETT grants FORTHnet a Special License for Installation of a Wired Public telecommunication Network. The above special license was later amended to include the provision of fixed public voice telephony through a Carrier Selection Code, under decision no. 214/23 of the EETT, dated In April 2001, the Company obtains the first fixed telephony license in Greece. In particular, on 20/04/2001, the National Committee for Telecommunications and Post (EETT) grants FORTHnet the first full fixed telephony license, which allows it to provide international, national and local voice calls to businesses as well as to simple domestic users. Upon issuance of this special license, fixed telephone users are given a four-digit code which allows them to use FORTHnet s advanced network and make telephone calls at particularly competitive prices. The license was granted by the EETT after it had studied the feasibility plan submitted by the Company. Based on the above amended special license, EETT decision number 215/43/ assigned Carrier Selection Code 1789, through which FORTHnet provides voice telephony services. In August 2001, FORTHnet signs an interconnection agreement with OTE, and in December 2001 the interconnection of its network to that of OTE is completed on a national level. At the same time, the Company s investment plan continues to be implemented, through the creation of necessary infrastructure for the provision of voice telephony services, which started on a pilot level near the end of the year. 18

19 In November 2001, FORTHnet participates in the General Assembly of Mediterranean Broadband Access SA that approved a share capital increase, and stated its intention to increase its participation from 40% to 60%, in accordance with its strategy for operational consolidation of the affiliated company. The Telecom Italia Group is limited to a participation of 40%. Also, year 2001 marks the Group s entry in the tourism services sector, through the provision of electronic booking, ticketing and issuance systems management services by affiliated company FORTHcrs SA, starting from shipping. At the same time, a series of initiatives by the company for strategic cooperation with other tourism service providers, such as the international booking system SABRE, bring positive results. At the same time, the company s participating interest in the SportNet.gr sports portal increases, with a 37.5% participation in the share capital of ATHLONET SA; the Company s participation in TERRATEC SA also increases, reaching 98.18% of share capital. December 2001 brings the official presentation of the commercial agreement between FORTHcrs, a FORTHnet subsidiary, and SABRE Hellas, a SABRE INC subsidiary, where tourism industry representatives are given the opportunity to learn about new solutions and the future development plans for services arising from this particular agreement. SABRE INC is a leader on the global market for on-line air ticket booking systems (Global Distribution System). FORTHnet increases its participating interest in Mediterranean Broadband Access SA from 40% to 60%, in accordance with its strategy for full operational consolidation of the affiliated company. In March 2002, FORTHnet officially announces the commercial availability of local telephony services for ALL consumers businesses and domestic customers in keeping with its promise for provision of integrated fixed telephony services in the first quarter of In April 2002, FORTHnet signed a long-term joint venture loan agreement for 20,000,000, with a six-year term, which was granted without assurances. In the same period, TerraTec is taken over by Forthnet. In August 2002, FORTHnet acquired 92.2% of the shares of Telemedicine Technologies SA, by purchasing 45.63% of Telemedicine Technologies (TTSA) from Inter Mutuelles assistance, and 0.93% from natural persons. In June 2003, the company initiated commercialisation of Internet connection services through ADSL technology. The introduction of these new services has a decisive importance for the company, because ADSL services constitute the first example of high-speed broadband Internet connections, and because they appear to be one of the basic services to make a high contribution to the company s income. In August 2003, FORTHnet acquired 100% of the shares of Mediterranean Broadband Access SA, by buying out Telecom Italia International NV s 40% participating interest. During the same period (August 2003) FORTHnet s Share Capital was increased through abolishment of the preference option of old shareholders, and the purchase of 7.74% of the company by Telecom Italia. Following this increase, the Telecom Italia Group (Telecom Italia International N.V. and Mediterranean Nautilus S.A.) holds 12.22% of FORTHnet shares. In December 2003, FORTHnet acquired 100% of INTERNET HELLAS S.A. shares. The company mainly provides PC network interconnection services (data centre services) and Internet access services (Dial up, VPN, and ADSL). In March 2004, FORTHnet acquired its subsidiary companies INTERNET HELLAS S.A. and HELLAS NET S.A., in both of which it had 100% holdings. Sub-project 3 of SYZEFXIS was signed in September 2004, between FORTHnet and INFORMATION SOCIETY S.A. 6.3 SCOPE OF ACTIVITIES FORTHnet started by providing Internet access services. It quickly moved on to providing the service with frame relay technology and implementing Virtual Private Networks for voice and data. Today, it covers the entire spectrum of telecommunication services, from access infrastructure (Last mile) to fixed telephony. 19

20 In the period , the contribution of individual products-services to company sales was as follows: Amounts in thousand Analysis of Sales 2002 % 2003 % 2004 % Sales of services 27, % 62, % 75, % Internet Services (Dial Up, Web) 7, % 8, % 10, % SMART % % % DATA Services (Frame Relay, data VPN, permanent Internet access) 10, % 10, % 11, % Data Center Services % % 1, % Interactive Marketing % % 1, % Other services % % 1, % Fixed telephony Services 8, % 42, % 49, % PC equipment Sales % % % Total Sales 28, % 63, % 76, % * FORTHnet sales for 2004 include the sales of Hellas Net and Internet Hellas, as reflected in the sales of Data Center and Interactive Marketing services respectively, in the period 1/4/ /12/2004; the two companies were acquired by FORTHnet on 31/3/ INTERNET Services The INTERNET is one of the most rapidly developing markets today. It mainly concerns access to products or information located or sold on the INTERNET, the exchange of information between two or more parties with access to the network, and the production and provision of information products on the network. On the basis of these three functions, INTERNET service users can also be classified into three large categories: 1. Users who use the INTERNET occasionally, to obtain information, communicate with someone or make purchases. 2. Users who use the INTERNET as a new cheap means of communication, for interconnecting branches or exchanging commercial data. 3. Users who wish to promote and advertise their activities and products. In particular, the services provided by FORTHnet S.A. can be classified as follows: Internet access services Internet access may be achieved in the following ways: Dial Up, through a simple connection to OTE s public telephone network. The user must have a PC, a modem and a telephone connection. FORTHnet provides the relevant connection software for the most popular operating systems, free of charge. The software is provided on CD-ROM or disk and uses account autosign-up, so as to minimize the cost of the product. FORTHnet s extensive network allows access provision at local rates for 98% of the Greek population. As of March 1 st, 1999, FORTHnet S.A., has a single national access number (EPAK), which allows reduced INTERNET access telecommunication charges. The most important competitive advantages in the provision of Internet connection by FORTHnet include the following: 1. A good ratio of users per modem, significantly lower than the market average. This ratio is monitored daily, in order to maintain optimum service levels (availability ~99%). Availability is a critical factor, as it is very important for customers to be able to connect to the Internet at any time. 2. Good user support. For this purpose, there is a 24-hour support centre, with skilled staff experienced in DIALUP problems. Customers from all over Greece can use the technical support EPAK number to connect to FORTHnet service centre. 3. Reliability and speed of the basic infrastructure (backbone and connection abroad). Access speed and quality depend on the user s telephone connection. For simple PSTN connections, speed reaches 56 Kbps; for ISDN connections, speed is either 64 or 128 Kbps. Moreover, ISDN lines provide shorter connection times, high and stable quality and simultaneous voice and data transfer. 20

21 As well as access, FORTHnet also provides accounts and space for creation of the user s personal web pages and My Security services for avoiding Internet risks and maximizing safe navigation and communication on the Internet, as well as a plethora of other value added services. Small Office is an individual DIAL UP product that combines other FORTHnet products. It allows companies to obtain their own corporate domain on the INTERNET ( and more than one account. This is a very successful combination, which has been widely accepted in the small business market. The service is provided to PSTN and ISDN subscribers (the latter also enjoy the benefits mentioned above). Via leased lines The INTERNET LEASED LINE service is a permanent Internet connection through a leased (analogue or digital) circuit, and allows permanent, high quality, broadband access to the National and International Internet. It is the ideal solution for businesses requiring reliable Internet access, as well as simultaneous access for a large number of workstations on their Local Area Network (LAN). It is also ideal for businesses that host Internet Servers on their facilities, to serve their commercial & business activities. The Service provides: Guaranteed Access Speed for the Global or Greek Internet Bandwidth On Demand Immediate upgrading of existing capacity in accordance with the customer s business needs (on LMDS circuits) Encryption Security in Data Transfer (on LMDS circuits) Option to commit specific capacity for separating traffic Specific bandwidth is committed for data transmission and receipt to and from the Servers, Internet access, sending and receiving, etc. Integrated HellasNet Web Hosting packages that can be adapted to the specific needs of each customer A service with asymmetric bandwidth was also created, to satisfy relevant business needs, with the incentive of a better price in relation to symmetrical bandwidth. Via ADSL In June 2003, the Company initiated commercialisation of Internet connection services via ADSL technology, under the trademark FORTHnet Fast Internet ADSL. The introduction of these new services has a decisive importance for the company, because ADSL services constitute the first example of high-speed broadband Internet connections, and because they appear to be one of the basic services to make a high contribution to the company s income in FORTHnet Fast Internet ADSL services provide always on Internet connections, at many times the speed of PSTN and ISDN subscriptions, reaching 1024 Kbps. At the same time, in September 2003, the company also commenced the commercial provision of OTE ADSL telecommunications access. Within this framework, the company resells the ADSL lines provided by OTE, under the framework contract signed between OTE and providers (ARYS). On 22/1/2004, the company introduced its new FORTHnet ADSL Time and FORTHnet ADSL Volume charging packages, and reduced prices for all FORTHnet Fast Internet ADSL subscriber packages. At the end of October 2004, the company was the first on the market to launch a new, innovative ADSL service package, under the trademark ADSL-in-a-box. The FORTHnet ADSL services provided are analysed as follows: FORTHnet Fast Internet ADSL FORTHnet Fast Internet ADSL services provide a permanent connection to the Internet at 256/128, 384/128, 512/128 and 1024/256 Kbps, with Dynamic or Static IP respectively. As all FORTHnet Internet services, they also provide accounts, My Security protection services for avoiding Internet risks and maximizing safe navigation and communication on the Internet, 10MB Web space, a plethora of value added services, and, of course, 24-hour technical support, 365 days a year, from the specialized Technical Department. FORTHnet ADSL TIME The new FORTHnet ADSL TIME service measure the real data exchange time between the user and the Internet, and offers 15 hours a month at only 6.90 (fixed charge). Every additional minute of data transmission after the first 15 hours is charged at 0.012, with a maximum monthly charge of 50. This service allows for the permanent connection provided by ADSL. Thus, while users are permanently online, they are only charged for the real time spent on the Internet. The FORTHnet ADSL TIME service is available at 384/128 speeds with Dynamic IP and offers: always on connection, online account monitoring (OAM), an account, FORTHnet WebMail, My Security protection services for avoiding Internet risks and maximizing safe navigation and communication on the Internet, 10MB Web space, a plethora of value added services, and, of course, 24-hour technical support, 365 days a year, from the specialized Technical Department. FORTHnet ADSL Volume 1GB, 2GB, 3GB FORTHnet offers three different volume packages, 1GB, 2GB or 3GB per month, at 8.90, and respectively. Every additional MB used by the user is charged at 0.014, with a maximum monthly charge of 50. The FORTHnet ADSL Volume series is available at 384/128 speeds with Dynamic IP, and its main features are the same as the FORTHnet ADSL TIME service (always on connection, online account monitoring (OAM), an account, FORTHnet WebMail, My Security protection services for avoiding Internet risks and maximizing safe navigation and 21

22 communication on the Internet, 10MB Web space, a plethora of value added services, and, of course, 24-hour technical support, 365 days a year, from the specialized Technical Department). ADSL in-a-box FORTHnet has created an innovative, by Greek standards, ADSL service product. ADSL-in-a-box is a complete, simple and user-friendly package for quick Internet connection, which allows everyone to take advantage of the benefits of ADSL technology, at 149 (+VAT), in a box. FORTHnet ADSL in-a-box contains everything you need for a quick and easy ADSL connection, combined with a special offer for FORTHnet Telephony services. In particular, FORTHnet ADSL in-a-box includes: 3-month FORTHnet ADSL 1Bill 384 subscription (includes Internet subscription and ADSL line fixed charges) All necessary technical equipment (modem, cables, splitter or filter) Installation CD User-friendly, step-by-step manual With FORTHnet s ADSL in-a-box, users obtain Internet access, an account, FORTHnet WebMail, My Security protection services for avoiding Internet risks and maximizing safe navigation and communication on the Internet, 10MB Web space, Dial up backup, a plethora of value added services, and, of course, 24-hour technical support, 365 days a year, from the specialized Technical Department. Via a NÅÔÊÅÕ CARD In the framework of both the current trend for service provision via pre-paid cards, and the expansion of the company s range of products, in March 2003, FORTHnet introduced NetKey 10 (20HOURS), a pre-paid Internet access card, which allows end users to pre-purchase Internet access time without requiring a subscription. NetKey 10 (20HOURS) offers 20 hours of fixed access time, usable within six (6) months of the card s activation date. The price of each card is 10 (including VAT 18%), and is addressed to occasional Internet users. NetKey 20 (1 MONTH) was introduced in December 2003, and in the framework of expansion of the FORTHnet prepaid card family; this card offers unlimited Internet access for a full calendar month from its activation. The price of the card in question is 20 (including VAT 18%), and it is addressed to seasonal Internet Users (average of 2 hours on the Internet per day). In June 2004, access via ADSL 256/128Kbps was added to the NetKey 20 (1 MONTH) card, allowing users to choose any type of access. A new member was added to the NetKey cards family in July 2004; NetKey 6 (10 HOURS) offers Internet access via PSTN/ISDN 64Kbps connections and can be used over a 3-month period from its first activation. Its main advantage is its competitive price, which has made it especially popular with occasional Internet users. All NetKey cards provide direct, reliable and fast Internet access, without registration procedures or commitments to contracts and signatures, online account monitoring and statistics, and 24-hour technical support 365 days a year (local charges nationwide). The average rate of consumption of NetKey 10 (20 HOURS) & NetKey 6 (10 HOURS) cards is 14 days; this ensures market flow for the card, despite its 6-month and 3-month shelf-life hours. As for NetKey 1 MONTH cards, the average daily rate of use is estimated at two (2) hours. The monthly shelf life of the card ensures smooth market flow for the card and stable use. At the end of 2004, 210,745 NetKey cards were placed on the market, with an activation rate of approximately 86%. Within this framework, the company s goal for 2005 is to strengthen its position on the pre-paid card market; this goal will be achieved through a series of strategic moves focusing mainly on reinforcing the cards market penetration, differentiating the cards from the competition, and improving them with features that add value to both the card and the customer. Via wireless broadband access Through its major investments, the company is able to offer innovative, reliable solutions for issues relating to Wirelss Internet Access. 22

23 The company can provide end users with wireless access through its network, using Wi-Fi IEEE b technology, and cover end users (businesses and individuals) requirements for fast data transmission over wireless networks at low cost. In order to develop wireless broadband access points FORTHnet Wi-Fi HotSpots the company focuses on areas with large concentrations of users/visitors, in accordance with the most rapidly developing international practices. The development sites include gathering points such as hotels, conference centres, training centres, airports, waiting rooms, restaurant chains and hospitals. Additionally, at the beginning of 2004, under Call 86 of the Information Society (IS), which subsidized and effectively contributed to the development of the Wireless Broadband Access service on the Greek market, FORTHnet provided integrated Wireless Internet Access services to businesses wishing to receive funding for the project, via its network and using Wi-Fi technology for end users. The relatively low implementation cost, combined with FORTHnet s know-how required for the implementation of such a solution, has made it particularly attractive to businesses wishing to offer new services to their customers and potentially increase their customer list and turnover. By November 2004, many large hotels in Athens adopted this technology and currently provide integrated wireless Internet access services via the FORTHnet network. These hotels are: Oscar Hotel, Best Western Premier Coral Hotel, Royal Olympic and Saint George Lycabettus, which have used FORTHnet Wi-Fi services to convert every communal area or hotel room into a business meeting point, as customers can use new Wi-Fi technology for a wireless connection to the Internet from any hotel area. In these projects, FORTHnet was in charge of the technical study, the installation and the implementation of the Wi-Fi service. Also, in August 2004, FORTHnet S.A., undertook the study and installation of a wireless Internet interconnection project to cover the requirements of the QUEEN MARY 2 cruise ship and its passengers. This project was a challenge for FORTHnet S.A., with respect to both the design of such a specialized LMDS installation, and to the tight implementation schedule, as it had to be completed within a few hours of the ship s arrival in Greece. In December 2004, the company designed and implemented an integrated wireless Internet access solution for the MINOAN LINES fleet; this project was the first to be implemented on passenger ferries in the world. For the first time in the history of international passenger shipping, Wi-Fi technology is being used thus making the existing satellite Internet circuit accessible from any part of a ship s communal areas, without wires. Thus, every communal area on each ship is a wireless Internet access point, available to every traveler or crew member. Through this innovative solution, all MINOAN LINES passengers can make productive use of their travel time, for work or entertainment, using their own device (PDA, laptop, etc.). My Security Protection Services FORTHnet Internet subscriptions are enhanced with value added services and protection guides against every possible threat, through FORTHnet My Security services, which ensure maximum security and protection on the Internet. FORTHnet s My Security services include: FORTHnet Antispamming: The 1 st Greek ISP with a personalized Antispamming service. Users can use the web interface to create their own Antispamming policy, activating & deactivating the service at will and creating their own white & black lists (i.e. choosing which senders they wish to receive or not receive s from, irrespective of the general Antispamming policy). FORTHnet Antivirus: This service provides maximum protection and security from viruses transmitted via e- mail, and is a unique combination of reliability and performance, without requiring installation of special software. At the same time, the service limits spam produced by viruses, while avoiding delays in the dispatch of s. FORTHnet Antispamming and FORTHnet Antivirus services are provided FREE OF CHARGE and are activated for all FORTHnet Internet subscriptions. Guides for the avoidance of and protection from malicious events: Published guides, which are reviewed and updated at regular intervals, containing advice on how to avoid malicious programmes such as viruses, Trojans, and on the protection against all malicious events such as dialer avoidance guides, guides for the protection of children from unsuitable content, and others Telecommunication Services FORTHnet started by providing Internet access services. It quickly moved on to providing services using frame relay technology and implementing Virtual Private Networks for voice and data. Today, it covers the entire spectrum of telecommunication services, from access infrastructure (Last mile) and Data Connectivity to fixed telephony (VoIP). 23

24 Fixed wireless access service FORTHnet provides alternative access to its network, through the Fixed Wireless Access network of Mediterranean Broadband Access SA, in which it holds 100% of share capital. The combination of basic infrastructure with Internet access services, telecommunications services, voice telephony services and/or other value added services, makes FORTHnet a provider of integrated telecommunications services. Mediterranean Broadband Access SA has obtained a license to use Wireless Fixed Access frequencies (WLL) at 26GHz throughout the territory. This particular licence is used to create a fixed wireless access network for broadband services, which provides a solution to the customer s last mile access on the provider s network, and constitutes an important medium for the provision of broadband services to businesses primarily, but also to end users. The fixed wireless access network is based on a flexible, cutting-edge system, which applies digital technology and combines ATM transmissions with digital microwave broadband connection technologies, thus allowing rapid and dynamic capacity distribution depending on user traffic volumes. In this way, the system can use the bearer s bandwidth effectively, to support a full range of medium to high capacity services. At 31/12/2004, FORTHnet s LMDS network consisted of 11 base stations in Athens and 3 in Thessaloniki, providing access services to more than 300 FORTHnet customer PoPs. In particular: Four new base stations were activated in 2004 (3 in Athens and 1 in Thessaloniki), as well as a transmission station on Mount Poikilon. Also, FORTHnet began to cooperate with other telecommunications service providers, who selected LMDS as an alternative local loop provision medium for their customers. Thus, FORTHnet also entered the wholesale leased line market, and efforts for further cooperation with new providers will continue in The main elements that contributed to the acceptance of the LMDS service on the market are its comparative advantages with respect to OTE s wired digital leased lines: Short preparation times, immediate upgrading/downgrading, multiple interface capability, consolidation of services on the same circuit, and of course the competitive cost. A very important role is also accountable by the service s reliability, which is very high because it is based on a carefully designed network with reliable infrastructure (it is worth mentioning that its availability exceeds 99.99%). The system s ability to consolidate services over the same circuit allowed FORTHnet to provide new, integrated products to its customers, covering even the most specialized requirements. For example, the system s ability to provide an asymmetrical speed Internet Plug (different download/upload rate) was particularly welcomed. The provision of a service level agreement (SLA) also played a significant role. During this period, the company is extending its wireless access network in Athens and Thessaloniki, through which it is able to offer, using LMDS technology, fast Internet connections, voice transfer and advanced services such as teleconferencing with high image quality and multimedia applications, both to businesses and domestic users with high demands DATA Services Internet Leased Line Services The INTERNET LEASED LINE service, concerns the permanent connection via engaged digital circuit and allows permanent, of high quality and speed, access in the International and National Internet. It provides guaranteed speed of access in the world or greek internet Also the service can provide Web and Hosting that can be adapted in the particular needs of each company. Frame Relay Services FORTHnet has developed the Greek ATM network backbone. It comprises of hubs strategically installed in large cities around the country, implemented by CISCO ATM switches and x2 Mbps digital connections between the switches. The design allows for alternative routing, allowing a large section of the network to operate even if there is a malfunction in one of the connections Statistical Multiplexing is the basic technology on which ATM is based. Time division multiplexing is the other method used for providing capacity. The difference in the two methods consists in the fact that in TDM Multiplexing the circuit remains unavailable if it is not used, while in the case of Statistical Multiplexing, available capacity is shared out dynamically to all network resources that need it. The liberalization of telecommunications gave FORTHnet the opportunity to enter the field of integrated voice and data networks dynamically, by providing QoS parameters on its ATM network. That is, parameters that provide specific guarantees for a client s connection properties, such as for example the Committed Information Rate (CIR) that guarantees a minimum rate of data transmission over the network. This even allows sensitive with respect to transmission time data (such as voice for instance) to be transmitted over the network without losses and delays, and support for service level agreements (SLAs). A single dedicated circuit is required for the client s connections at each point at which the client is to connect to FORTHnet s network. Using these circuits, virtual connections are created between the points that are to communicate 24

25 with each other. These connections are called virtual circuits and allow the creation of any type of connection, depending on the application s requirements. Connections on the customer s side are Frame Relay type thus allowing the use of advanced voice and data integration technology offered by Frame Relay Access Devices. In the future, ATM technology will most probably also be available to end users. To create Frame Relay connections, the customer must have a permanent 64 Kbps to nx2 Mbps connection at the points that interest him. One of the interesting features of Frame Relay technology is the possibility to support new business applications and legacy applications, which are still functioning in companies. Therefore, with respect to application, it offers a transparent solution. Typical applications implemented using the Frame Relay services offered by FORTHnet are: Lan to Lan, switchboard integration (SNA) and legacy applications such as remote ASCII terminals, IBM communications, X.25 etc. The advantage of the Frame Relay service is that a single connection serves all the customer s virtual connections, and also voice, data, Internet and stock exchange services transmission. This means less investment in equipment than other point-to-point technological solutions, and even lower telecommunication costs. The advantages of the FORTHnet Frame Relay Service in relation to Network implementation with OTE leased lines is better Management and more efficient use of available bandwidth, fixed charges irrespective of distance and the provision of a lower cost solution in relation to a network implemented using leased lines. It is also safer. DATA VPN Services The expansion of FORTHnet s data network throughout the country allows provision of the DATA VPN service. Apart form the ATM network backbone, FORTHnet s network has been qualified as a Cisco Powered Network. Due to its carefully selected infrastructure, FORTHnet can implement virtual private networks (VPN) at any of its points of presence. Services implemented with VPNs mainly include LAN to LAN communication. Additional possibilities offered by Cisco router technology are encapsulation of protocols over the IP so that it is possible to route multiple protocols over the VPN. Therefore, applications such as remote PC access, X.25 based communication, etc, can be routed over the VPN network provided by FORTHnet. In addition, FORTHnet undertakes to guarantee limited access to the VPN for third parties, and create suitable interconnection topology between VPN hubs. For example, all VPN hubs can communicate with each other, or alternatively communication is possible with a single central hub. Moreover, access control is possible at application level (port number) as well, for greater guarantee of communication security. Officially, the VPN connection is made using dedicated circuits at each connection point with FORTHnet s network. This can be a 64Kbps to nx2 Mbps connection, depending on the requirements of the application. The DATA VPN service also provides Dialup type connections and allows controlled access to a VPN for travelling or occasional users at a very low monthly cost. The future of Data VPN is very promising as all telecommunications technologies converge towards IP technology. Thus, it will be possible to provide all future services from a single Data VPN connection. In addition, the important expansion of the Company s network allows low-cost and reliable access to every point of the country. FORTHnet s network is sufficiently large to be considered as competitive even for the data networks of the national telecommunication organization. Network safety is implemented with IPSec encoding for the creation of a totally secure environment for the exchange of data between the regional and Central Points of the Company. The service will benefit from MPLS Technology with respect to quality upgrading, and will provide differentiated classes of service to support various types of traffic for services based on the IP protocol. At the same time, cooperation of a VPN with FORTHnet s Frame Relay services is possible. The following figures present some of the above services schematically. LEASED LINE (LL): Permanent connection between two points allowing data transmission. Computer Network Leased Line Modem Leased Line (LL) NETWORK FORTHNET & INTERNET 25

26 FRAME RELAY: Data communication protocol allowing simultaneous transmission of voice and data (interconnection between switchboards) PC Modem FORTHnet FRAME RELAY NETWORK Modem PC MULTIPLEXER MULTIPLEXER SWITCHBOARD SWITCHBOARD BRANCH Á BRANCH Â VPN (Virtual Private Network): Branch Interconnection via a network provider. SUBSIDIARY Á SUBSIDIARY B FORTHnet s NETWORK SUBSIDIARY C SUBSIDIARY Á International Connectivity Services Two new services are currently provided in cooperation with the Cyprus Telecommunications Authority (CYTA): International MPLS and International Private Line Circuit, through the interconnection of the 2 providers network. These services have a significant profit margin for the company FORTHnet TelephonyServices In 2004, FORTHnet Telephony entered a critical period together with the rest of the telephony market. The major events on the market were the following: 2004 was the first year in which OTE showed losses, mainly due to the loss of income from fixed telephony. OTE s commercial and tactical reaction, especially with respect to carrier pre-selection, was coordinated and particularly strong. Mobile telephony is increasingly replacing fixed telephony, and generally takes up a larger portion of the family and corporate budget than fixed telephony, and with much greater ease. Competition forces and especially OTE s actions, make market regulation harder and harder for the EETT, as many of its decisions are not accepted by OTE, which appeals to the courts while refusing to comply. Despite these unfavourable circumstances, the company has tried to take advantage of all margins, and foreseeing favourable conditions, has entered the telephony services sector dynamically. This sector accounts for 80% of the telecommunication market sales. The company gained a market share of around 5% by the end of the year, corresponding to 275,000 telephone lines over a total number of 5,600,000. In 2004, the FORTHnet Telephony family of services included the following: FORTHnet Telephony: The basic service for domestic and corporate customers using the selection code (1789) or carrier pre-selection. FORTHnet Telephony Favourite Destinations: A series of discount packages with reduced charges with respect to the basic service, for calls to favourite destinations. The series include the introductory package without fixed charges, the Extra package with a 1 charge per Favourite Destination and higher discounts, and the Plus package with a 2 charge per Favourite Destination and a broader definition of the Favourite Destination. Thus, while in the first two packages the Favourite Destination is one local, national or mobile number, in the third package, the Favourite Destination can be all local or national numbers or the mobile numbers of a specific company. In this way, the packages allow all types of customers (domestic-corporate) to choose the most suitable package for them, depending on usage (low-high). 26

27 FORTHnet Telephony Direct Link: The permanent connection telephony service. The service has been commercially available since 2002 and concerns corporate customers with heavy traffic. FORTHnet Telephony My Link: The new permanent connection telephony service, which began in November 2004 with the application of portability; this service differs from the existing service because it is addressed to customers who choose FORTHnet as their main telephony provider, either by transferring their number from OTE, or using and announcing their number from FORTHnet. This service allows customers to benefit from FORTHnet s reduced fixed charges with respect to OTE, while FORTHnet benefits from the creation of its own community of users and incoming traffic. The company s commercial actions during the year were as follows: Changes to the FORTHnet Telephony Favourite Destinations packages were introduced in February, with simultaneous changes to pricelists: per second charges for local calls after the second minute, national calls charged as local calls on Sundays. In June, customers were given the option of receiving bills every month or every two months, so as to reduce the number of bills received. In October, charges for calls to mobile numbers were effectively reduced, as the minimum charging period was reduced from 60 to 30''. A special offer was launched in November and December, with a 20% discount for national and international calls. Indicative FORTHnet Telephony figures for 2004 Based on data available by the company s systems, the following took place during 2004: Average traffic over the interconnection lines with OTE (collection and termination) was around 4.4 million minutes per day. The largest percentage concerns local calls (73.1%), while 10.3% of traffic terminates at mobile numbers. The largest portion of income originates from termination to mobiles (41.9% of income from telephony traffic), while income from local calls accounts for only 35.5% of telephony traffic income. An average of 240,000 was collected each month in 2004 for payment of FORTHnet bills at the Kallithea headquarters, and 130,000 at the Thessaloniki, Patra and Kavala offices Combined Services The 1LINK service is a combination of 4 individual FORTHnet services: Internet LL, VoIP, access circuit and Equipment use. The advantages of the service for the customer are as follows: Significant reduction in fixed telephony and Internet access rates and fixed charges Predictable Monthly costs for Telecommunication Services and equipment Single Bill Broadband Access to the Internet Agreed Service Level Services FORTHnet S.A., guarantees excellent quality for all its services. Additionally, it offers Service Level Agreements for the various needs of its customers. This means that: FORTHnet S.A., is committed to the customer with respect to quality, availability and service functionality. It has a system for recording and assuring quality parameters. All services are supported by Service Level Agreements, contract that set out the guarantees offered by FORTHnet and include the quality features and procedures followed for measuring them, which determine the service quality level. These features are: Local Loop availability if provided by FORTHnet and backbone availability on a monthly basis. Mean Monthly Round Trip Delay Mean Packet Loss percentage Date of installation and commissioning for the LMDS Access Circuit The procedure for reporting problems to the Technical Support Centre Damage restitution time Authorised group of Technicians Clauses in the event that FORTHnet is unable to provide the required service level Consultancy services Apart from the consultancy services offered by the sales department during the service sale procedure, FORTHnet analyses client requirements and designs a networking solution for network infrastructure or telecommunications services. FORTHnet s personnel have a good knowledge of the telecommunication market and suitable academic and technical qualifications for providing solutions to any problem. 27

28 On Site Services ANNUAL REPORT 2004 Apart from basic Telecommunication Services, FORTHnet S.A. and its experienced Technical Staff provide On Site Services to customers, so that they can benefit from their LAN and network equipment as much as possible by offering a wide range of optional services. Also within the framework of the Equipment Maintenance Contract, FORTHnet provides technical support & maintenance services to its Customers for their Network Equipment, and commits to restoring operation Distribution Network and Telecommunication Services Sales Promotion Two departments are responsible for promoting the services (FORTHnet Telephony Call By Call, FORTHnet Telephony Direct Voice, Frame Relay, IP, VPN & LMDS) of the General Directorate of Telecommunication Services: o Direct Sales The Direct Sales department has specialized sales staff in Athens, Thessaloniki and Heraklion and it is responsible for the expansion/maintenance of the Telecommunication Directorate client list. Market segmentation is carried out in cooperation with the Product Managers for targeted communication. Sales staff is supported by the presales department that is responsible for processing data obtained from sales about client requirements, and plans and provides a technical/economic solution that covers these needs. o Indirect sales FORTHnet S.A., has developed a national resellers network with over 82 points of presence throughout the country and a particularly extensive network of partners consisting of companies and reseller chains for its services. For retail services, such as the basic FORTHnet Telephony package, a very extensive network of resellers has been created, on the basis of agreements signed with large retail chains and invidual dealers. The multi-level service promotion model with software support created by the company became operative in For the more complicated services, such as FORTHnet Telephony Direct Voice, Frame Relay, IP VPN & LMDS agreements have been signed with businesses, in the IT sector mainly, which contact clients while FORTHnet employees provide additional assistance for the provision to clients of integrated solutions with respect to hardware and the network Financial Information Services SMART (Stock Market in Real Time) Rapid development of the Greek Stock Exchange in the past created a need for a low-cost and mass method of monitoring sessions in real time. Anticipating the importance and size of this market, FORTHnet S.A., developed the SMART (Stock Market in Real Time) product. This service is addressed to stock brokers, banks and other specialized private investors. It consists of special software that reads data on the stock exchange server via an Internet connection and provides a visual representation to the user through graphics, tables and Excel connections about the session, while historical data and stock exchange news are also provided. It is a GUI windows environment with Point and Click and WYSIYG features. Great emphasis has been placed on careful promotion and sale of the product through FORTHnet s private sales network exclusively; this is necessary as the product is addressed to specific users who may not be familiar with computers, while much attention is paid to customer service. The seller ensures that the customer is fully informed through a detailed presentation, ensures that the customer s electronic equipment is suitable for unhindered programme operation (subject to minimum requirements with respect to the type and specifications of the modem and PC) and ascertains that the customer has understood the terms of the contract. At the same time, the customer is granted a compulsory 5-day trial period during which he/she has the opportunity to establish whether the programme in fact covers his/her requirements. IP Multicast technology is used for the transmission of data in real time for the SMART application. IP Multicast technology consumes very low bandwidth, thus resulting in uniform and rapid transmission of the session to all FORTHnet s network, irrespective of the number of users observing the session at each point. IP Multicast technology is fairly innovative on a global scale and SMART is the forerunner of products such as radio and TV broadcasting over the Internet. SMART is sold with a user license, while the software itself and future improved versions are provided free of charge. Four (4) packages have been developed according the way of access to FORTHnet s network. SMART Dial, where the user has access via a simple selected network to one of the modems provided by FORTHnet for Dialup customers, SMART ISDN that gives access via the ISDN network, SMART Exclusive for those who wish to have a dedicated modem at FORTHnet in order to use SMART, and finally SMART Office, where the user already has some type of connection to the network and simply purchases a SMART user license. All packages are combined with Internet access possibilities. 28

29 For this service, sales are directly connected to current economic conditions and in particular the situation on the ASE. In an effort to reinforce the product with new capabilities, information about the derivatives market is also provided, while in the future the service will include order routing, i.e., the user will be able to send orders directly to the ASE via SMART s User Interface, and technical analyses, either as part of the application or as an additional application of the SMART package WebSMART The WebSMART service is the web version of SMART and was developed in order to cover the needs of users interested in a low-cost solution for stock exchange information. Unlike SMART, which requires the installation of special software, WebSMART is based on the use of a simple web browser whereby, at the user has access to a range of stock exchange data instead of simply observing the session. The use of web technology means easy upgrading for the application that is invisible for the end user, and that it is not necessary to deliver the application via some type of medium (e.g. CD-ROM). Through WebSMART, users can participate at ASE sessions held for shares and derivatives, receive financial news, view sophisticated graphics and be informed about listed companies (board of directors, balance sheets, historical data, indices, etc). Additional information provided by the application includes notifications (visual/ sound and SMS), a sophisticated graphics tool, and many analysis and statistical data tools. Sales policy is based on the model applied for SMART, i.e. 5-day trial use for the application so that the user can evaluate the application prior to subscribing. Subscriber packages are available for 3, 6 or 12 months (pre-paid) and include WebSMART without connection to the Internet, WebSMART with an Internet Dialup 56k connection, WebSMART with an Internet ISDN 64k connection, and WebSMART with an ADSL connection. The WebSMART application has been developed internally, by the content development department; it can be adapted rapidly to customer needs and current market trends, and being a low-cost solution makes it is very competitive. The application is in a phase of ongoing development and improvement with new capabilities, and is addressed mainly to private investors SMART SMS The SMART SMS service provides real time information on the Athens Stock Exchange via SMS messaging. In order to receive direct information on the progress of the ASE (indices & stocks) in real time, anyone can send a message to 4324, and will immediately receive the information requested. For example, users can request detailed information of any share or index, summary information on the progress of the session, as well as information on the 5 shares showing the greatest increase/drop, volume, turnover, etc. Charges are the same for any information requested, and payment is made to the mobile telephony company. The service also functions abroad, in countries where the roaming service applies SMART i-mode The Smart i-mode service was created to allow i-mode users to monitor ASE progress in real time. The service allows access to real time data (live stock prices, shares and derivatives situation, shares with the greatest increase or drop, largest smallest turnover, volume of transactions and fluctuation) from the user s i-mode mobile. The service also allows the creation of portfolios with the shares each user is interested in, daily and historical graphs display, information on indices and stock closing prices, as well as information on mutual funds ÉR Solutions FORTHnet can assist listed companies in informing their investors, through the provision of integrated solutions for corporate websites. The financial services offered by FORTHnet to corporate customers wishing to inform investors, are developed and designed by HellasNet. Stock exchange information provided via the Investor Relations (IR) Kit cover every possible corporate information requirement, via a plethora of parameterizable elements (real-time or delayed, historical, statistics, etc.). Customers can choose from a wide range of services, such as detailed presentation and analysis of a company profile, presentation of detailed information on each listed company's subsidiaries or affiliated companies and presentation of company activities, products manufactured or sold, and services provided. The public can also be informed directly of recent company activities, through a dynamically renewable Press Office, which functions as a section of the website, and dynamic updating of the website with all the company s financial information financial statements & annual balance sheets etc. Finally, the IR Kit provides an option for supplying the site with various financial data, such as share closing prices with a historical file, display of a share price in real time or delayed time, share graphs in real time or delayed time, and historical graph. 29

30 6.3.4 Content and Value Added Services - ASP FORTHnet is developing new services and network applications addressing the requirements of Greek Internet and Greek Businesses, either by creating and upgrading special content portal sites or by providing ASP services The FORTHnet portal (FORTHnet.gr) Greek Internet users, and especially FORTHnet Group customers, now have their own portal, which facilitates Internet navigation with network tools, news, useful information and technical support. Through the portal, Group customers have access to: FORTHnet WebMail, FORTHnet Telephony OAM (online account monitoring), dial-up account monitoring, NetKey balance monitoring, as well as electronic step-by-step technical support and many other services. For the broader Internet community, the FORTHnet portal offers the FORTHnet e-shop, the FORTHnet Guide (a userfriendly guide which leads visitors directly to the online services required, with over 1,000 public documents, more than 500 services, over 50 metric converters), general information on FORTHnet Group activities, and a detailed presentation of its products and services. The portal also offers regular news coverage, financial-stock market information, and major sports news with scores and classifications. The FORTHnet portal is the common ground for the Greek Internet community. The FORTHnet portal: Web Search Web Catalog Services FORTHnet provides two innovative added value services; a particularly sophisticated search engine developed specifically for the Greek web based on the leading V 3.0 Alta Vista Search Engine ( and an Internet directory based on FORTHnet s HellasMap ( The search engine is the product of cooperation between FORTHnet and Alta Vista. On the basis of this agreement, FORTHnet will integrate Alta Vista s consolidated technology in its own Web Site ( The extremely powerful search engine developed by Alta Vista (V 3.0. Search Engine) is currently the most complete solution for finding information on the Internet, having proven its reliability, speed and precision globally. HellasNet, a FORTHnet Group subsidiary specialized in web applications, developed and adapted the engine to the Greek Internet and the Greek language. It is now possible for Internet users to search for websites in Greek using all the advanced services offered by the Alta Vista search engine and also to target-search on WebPages, articles, news. FORTHnet s Directory is a record, grouping and description of Greek Internet sites. A new directory of Greek sites was created based on HellasMap, a directory developed by FORTHnet. Here, users will find the different WebPages in categories based on their subject and geographical origin. In addition, a brief description of each site is provided to make surfing easier Road Map City Guide Services In November 2000, in cooperation with InfoCharta, FORTHnet produced the most user-friendly and complete Map/Guide for Greek towns published on the Internet. DriveMe.gr is a complete city guide; its main advantages are its unique ease of use and its comprehensive address and information content. Through a very friendly User Interface, with simple and rapid procedures, DriveMe.gr visitors can identify and visualize not only exact addresses (street and number) but also other interesting information such as Monuments, Public Services and Organisations, Restaurants, Cinemas and Theatres, Stores, Banks, Hospitals, Pharmacies, Doctors, etc. DriveMe.gr displays a map of building blocks, with street names, squares, etc., thus creating an environment allowing easy navigation for the user. It has a unique functionality that is based on a search engine; this search engine can recognise and correct spelling mistakes committed by the user when typing in addresses and also allows the user to find a street even if it has two names (e.g. Patision, 28 th October), or if the street name consists of two or more words. DriveÌe.gr already has a detailed guide for Attiki, the Municipality of Thessaloniki and Heraklion. Guides for many other Greek towns, such as Patras, Volos, Larisa, Chalkis, Chania etc are expected to be added soon in order to cover gradually the entire Greek territory. The service is based on InfoCharta digital maps. InfoCharta, a company established in the Technological Park of Crete, developed the application and has many years of experience in the geographical information systems field. On the other hand, HellasNet, a FORTHnet Group company, which is a pioneer with excellent experience in web development, designed the site for this new service. DriveMe.gr is one of the new innovative services offered to Greek Internet users by FORTHnet in an effort to expand its activity in this sector. 30

31 i-mode Services ANNUAL REPORT 2004 In an effort to exploit new content and service transmission channels, FORTHnet has cooperated with COSMOTE for the development of services accessible from mobile telephones via the i-mode platform, an advanced content and service transmission platform developed by Japanese mobile telephony company NTT DoCoMo and launched by COSMOTE in Greece, for its subscribers. Because of its dedication to exploiting new cutting-edge technologies, FORTHnet has participated in the i-mode platform since the first day it was applied in Greece, with 5 services: SMART: The famous stock market information package. Information from the ASE in real time, statistics and historical data on shares, information on Mutual Funds, and creation and valuation options for personal subscriber portfolios. OpenSeas: Shipping itinerary service with information on routes, departure and arrival times and ticket availability. The service provides information on all the routes of passenger ferries from 35 Shipping companies (more than 220 ferries), prices and ticket availability for all seats. DriveMe: A successful Internet site that allows users to locate any address on an electronic map on their mobile phone, and enrich maps with additional points of interest (banks, pharmacies, gas stations, churches, cinemas, etc.). Sportnet: An application has been developed in cooperation with ATHLONET SA, which provides constant information over the mobile phone, with news, game forecasts and results from Greek and international football and basketball matches and Formula 1. Poseidon: A weather forecasting application for the whole of Greece has been developed in cooperation with the National Centre for Marine Research (ELKETHE). A highly reliable and precise weather forecasting service was created using FORTHnet s know-how and the scientific research and validity of the ELKETHE. HellasNet, FORTHnet s interactive marketing unit, was duly trained on the new platform, while exploiting its experience in the mobile services sector, and undertook the development of these services together with many other i-mode applications on behalf of its customers Former INTERNET HELLAS Services Within the framework of its operational and financial consolidation with its parent company FORTHnet S.A., Internet Hellas is currently FORTHnet s vertical business unit, specializing in Data Center service provision. Internet Hellas S.A. was taken over by FORTHnet on and merged on Currently, still operating under the name Internet Hellas, FORTHnet is promoting services associated with web hosting and data management, IT systems and internet applications. FORTHnet s central Data Center facilities providing the above services are located in Agios Stefanos Attiki, with access to the Athens-Lamia National Road (23 rd km), occupying a 500m² area. Department sales in the three last quarters of 2004 reached 1,099,652. Being among other things one of the largest Hosting Services Provider (HSPs), FORTHnet already has 3 Data Centers, whose infrastructure it exploits via Internet Hellas for the provision of similar services to third parties. The architecture of the 3 Data Centers is based on the latest technologies, and the main aim is to provide customers with easy access to and use of technologies, but also with particular emphasis on equipment integrity, data security (physical and logical) and technical support for solutions. Through these ultra-modern Data Centers, Internet Hellas offers business a broad range of services, such as: Domain Name Services Hosting Services Web Hosting Services ASP Hosting Services Co-location Hosting Services Dedicated Hosting Services Managed Hosting Services Streaming Media Services Domain Name Services allow for online registration, renewal and management of.gr domain names. This option is provided through a special web application supported by a specialized e-shop, and is the most direct, user-friendly and cost-effective domain name management solution. Hosting Services include the provision of a large number of accounts, divided into groups or domains on a case-by-case basis, webmail, administration interface, antivirus, antispamming etc. The main advantage of these services is that they are directly manageable by customers, who can implement their section of the mail system according to their requirements. Web Hosting Services are provided in individual packages that grow along with customer needs. The packages combine advanced hosting services, on communal servers for cost savings, and can cover the requirements of any business, from the smallest to the largest, and from simple corporate sites to e-commerce applications. ASP Hosting Services concern the provision of applications to end users, for rental/leasing, via the Internet from a Data Center, thus significantly reducing the total investment cost required for a business to obtain the necessary equipment. 31

32 Co-location Hosting Services offer each business the option of installing its equipment at the specially designed colocated servers site, thus enjoying the basic services of FORTHnet s data center, such as UPS, air-conditioning, 24-hour support, controlled environment, continuous network operation and similar infrastructure 24 hours a day. Dedicated Hosting Services concern the rental and exclusive use of a web or application server, which is housed in FORTHnet s Data Centers and has permanent access to the network. Specifically, services include the supply, installation, operating control and management of equipment and hardware by FORTHnet; the only thing you have to do is manage the content hosted on your server. At the same time, you will have full administrative access to the equipment, allowing you to install any software or application you may wish. The Managed Hosting Services category allows customers to host their applications in FORTHnet s Data Center, without worrying about managing equipment. Tasks such as software upgrading, preventive control and maintenance for fault prevention, magnetic means capacity control etc. are carried out by Internet Hellas s skilled staff. Basic managed services aiming at high system reliability include systems and software support, data storage and recovery, and systems monitoring. Finally, Streaming Media Services (online video and audio broadcasting) cover requirements such as live content broadcasting 24 hours a day (24x7 Streaming), and live web casting, and are addressed mainly to radio stations and businesses or educational authorities wishing to transmit audiovisual material over the Internet. Internet Hellas's significant customer list is proof of the acceptability and reliability shown for the above service, both numerically and qualitatively. For example, more than 5000 companies have entrusted the hosting and management of their corporate websites and computer systems to Internet Hellas s Data Center services. The reliability of the network backbone and Data Center infrastructure, combined with the use of the latest technologies in web services, constitute Internet Hellas s main competitive advantage in the Data Center service provision sector. Internet Hellas s main activities in 2004 were: Active participation in the development of a new model for Management and Assignment of [.gr] Domain Names. FORTHnet was one of the first certified Registrars to provide Domain Name Registration, Renewal, Transfer and Management services. This allowed for further expansion of Data Center services, and was an opportunity to approach a much greater portion of the Internet services market. This new category has increased Internet Hellas s customer list (putting the company in one of the first places among 240 Registrars) and annual sales significantly (the new service accounts for up to 10% of annual sales). Approaching of large customers and vertical markets, through the promotion of advanced Data Center services (under development), such as Dedicated Hosting (computer system rental and hosting) and Managed Hosting (computer system and application support and management), which are now also supplemented by Service Level Agreements (SLAs). These services have boosted annual sales significantly, and account for 22% of annual turnover. Major companies and organizations, such as the Hellenic Olympic Committee, the Ministry of the Interior, Public Administration and Decentralization, VW Bank, Praktiker, Microsoft, Multirama, Aegean Airlines, ECDL, Novartis, PriceWaterhouseCoopers, Commercial Value and others have placed their trust in Internet Hellas and continue to make use of the above services. Finally, company activity and results were noteworthy with respect to the settlement of matters arising from the merger and relating to human resources, procedures and support and operations systems. Thus, 2005 will be the first year when a distinct and specific business entity within the company will focus on the provision of Data Center services Former HELLASNET Services HellasNet SA was acquired by FORTHnet SA on 31/3/2004. Its sales in the last 3 quarters of 2004 came to 1,340,073 Euros. Having preserved the features of HELLASNET, FORTHnet continues to offer services relating to interactive marketing (online advertising, site development and SMS-MMS-imode applications). Finally, it is noted that all matters arising from the aforementioned merger with respect to both human resources and procedures and support systems, have been settled. Currently, FORTHnet promotes Interactive Marketing services under the trade name HELLANET, which it continues to use. HellasNet s aim is to provide integrated interactive marketing services to organizations and businesses interested in advertising and promoting their services and products over the Internet and mobile telephony. More specifically, HellasNet specializes in the following 3 basic sectors: A. Online Advertising Services concerning the design of an online communication strategy, the production of graphics, the compilation of an advertising plan and the purchase of advertising space in the media. The online advertising services offered by HellasNet are: Strategy Design of a suitable online strategy based on customer targets and the audience to which it is addressed. 32

33 Graphics Design of graphics and rich media, such as banners, micro-sites, pop-up and pop-under windows, web-over, floating ads, expandable banners, and others. Media Buying & Planning Design and development of a media plan based on communication targets and the customer s target-audience, and buying space on popular Greek and foreign sites. In the field of Online Advertising, HellasNet continued its upward trend in 2004 by designing and implementing on-line advertising campaigns for existing Customers and for new ones Advertising, with an important effect on the market. The prominence of this upward trend are the 6 awards it won at the Ermis Awards 2004 (Awards for Creative Advertising and Communication), the most recognized institution in the Advertising sector. B. Website Development Design and development of websites and other applications, such as e-shops, online booking and e-ticketing systems, content management, investor relations. HellasNet also offers multiple solutions for Internet Applications Development, and the support of customer websites. In particular: Content Management HellasNet s Content Management Tool (CMT ) is the best solution to the need for constant enrichment of websites with new content, without requiring skilled technical staff. The websites of EYDAP, ALPHA TV, Multirama, AEK FC, Parousiasi stores, Village Cinemas etc. are a few examples. Online Booking HellasNet has extensive experience in the development of online booking, e-ticketing and online reservation systems, and their interconnection to company computer systems. The Aegean Airlines e-booking/e-ticketing/echeckin system and the Minoan Lines e-booking system are two such examples. E-commerce HellasNet develops integrated e-commerce solutions and applications such as: electronic product or service catalogue systems, online payment systems and visitor management systems; it also undertakes interconnection to all modern, open architecture IT systems. The Computer4u, Protoporia, Petridis Creations, Leonidas Pralines e-shops are a few examples. Investor Relations Web Kit The Investor Relations Web Kit is HellasNet s integrated solution for the development of a high specification corporate website, based on ASE requirements with respect to Quality Criteria for Listed Company Advertising. The IR Kit has been installed in a large number of listed companies, such as the Edrasis Group, Lavipharm, EYDAP, Stelios Kanakis, Iaso, etc. With respect to Web Development services, HellasNet has focused mainly on large projects and has exploited its extensive know-how in the web sector to attract large businesses and organizations. It has undertaken projects concerning the development of advanced web applications such as e-shops, e-booking and e-ticketing systems, Intranets, etc. C. Mobile Services SMS & MMS services such as advertising campaigns, content provision (ring-tones, pictures, logos, soccer live scores), application development, i-mode sites, wap sites. HellasNet s SMS services include: SMS Broadcasting (bulk SMS) The SMS Broadcasting application allows easy and direct bulk dispatch of SMS over the Internet. SMS services using 4-digit short code HellasNet provides SMS services with 4-digit short codes for bilateral communication with the public. i-mode site development HellasNet specializes in the development of i-mode sites. These sites are developed so that mobile telephony subscribers using devices with the DoCoMo s i-mode platform (used in Greece exclusively by Cosmote) can have access to their content. With respect to Mobile Services, HellasNet has inherited an integrated platform and infrastructure for SMS and MMS wireless service provision from Internet Hellas; it can now offer its Customers integrated Interactive Communication Services. The largest mobile advertising campaigns in Greece have been implemented using the above platform. HellasNet s customer list includes some of the most important names on the market, such as: Toyota Hellas, KLM, Cadbury, Colgate-Palmolive, Interamerican, Intertrust, Comdex Greece, Multirama SA, Village Cinemas, Aegean Airlines, Minoan Lines, NAFTEMBORIKI, Silhouette, Remax Hellas, Lexus, EYDAP, EDRASIS Group of Companies, Youth Secretariat, Geniki Trofimon SA, Novartis, Lavipharm, Armed Forces General Staff, PIRAEUS REAL ESTATE, AEK F.C., Alpha Group of Companies, LEO SARATH, TITAN, SIXT, and others. 33

34 HellasNet has focused on gradually reducing mass project production, and has turned to fewer and better quality projects, with greater profit margins. HellasNet s main target for 2005 is to continue to dominate the market and enhance its visibility on the Interactive Marketing market Public sector Department The Public sector Accounts Department was established in May 2002; its main scope includes public sector projects and especially projects funded under the 3 rd Community Support Framework (CSF) and the Information Society (IS) Business Programme (BP) ( ), which has a total budget of 2,839.1M Euros. In general, the department s activities concern the following: Investigation, penetration and management of commercial contacts and agreements with state authorities. Study, evaluation, preparation, submission and monitoring of (technical-financial) offers made by the FORTHnet Group of Companies for state tenders. Compilation of contracts (SLAs) for the projects, after success in the tender procedure. Monitoring and management of the public projects undertaken by the Group. Commercial management of public sector projects. Preparation for participation of the Group in public sector projects prior to the issuance of calls for tenders for the relevant tenders. Establishment and preservation of cooperations/alliances with other partners in public sector projects. Participation in public negotiations with state authorities and committees. Provision of consultancy services within the framework of tenders, public negotiations, state project elaboration & management. The department cooperates regularly with other Group departments (legal, financial/accounting, Pre-sales, technical directorate, etc.) in the compilation of offers and contracts and in the monitoring and pricing of projects. Public sector Department 2004 Activities Year 2004 was a milestone for the Public sector Accounts Department, because the first Contracts for large projects awarded to FORTHnet through public tenders in which it took part were signed. In year 2004, FORTHnet was awarded Sub-project 3 of the National Public Administration Network SYZEFXIS project, within the framework of a public open international tender. The relevant contract was signed on September 24 th of the same year, with a total value of 4,018, (VAT excluded), between Information Society SA and FORTHnet SA. The project is currently under implementation (application study phase). The SYZEFXIS project, with a total budget of 62,987, (VAT excluded), will be implemented in nine (9) Subprojects. Seven of these are purely telecommunication projects. In the SYZEFXIS Project, the Greek Territory has been divided into six (6) telecommunication regions (Sub-projects 1-6). All the sub-projects are connected to each other through a backbone network (Sub-project 7). The other two Sub-projects refer to the IT market and cover training and e- education requirements in Greek Public Administration (Sub-project 8) and certification and electronic transaction security issues (Sub-project 9). In this way, the Project s 1800 points-authorities are divided into 6 telecommunication sub-projects, which can be implemented by different Contractors. Also, the backbone network is a separate sub-project which can come under the jurisdiction of a different Contractor. Sub-project 3 concerns the implementation and provision (as a service) of a network for distribution and access to subproject 3, which network will initially interconnect 97 state authorities in Thessaloniki County. Sub-project 3 will also offer advanced telematic services and value-added services: Voice: advanced telephony and facsimile services within SYZEFXIS, communication outside SYZEFXIS (local-national-mobile-international). Data: communication internal to SYZEFXIS, Internet access, and all supplementary services. Video: teleconferencing, e-education. Remote access: subject to applications from selected users. FORTHnet also participates in Sub-project 2 Attiki 2 (total budget 10,102,234 inc. VAT), as an infrastructure service provider to OTE. In 2004, FORTHnet completed the implementation of the data & voice VPN for project Procurement and Installation of Basic Infrastructure for the ODDY SA Management System. The project was awarded to the Q&R-FORTHnet joint-venture through a public open international tender called by IS SA, and a contract worth 544, (VAT excluded) was signed on 28/5/2004. FORTHnet has a 50% participation in the said joint-venture. In particular, FORTHnet will provide ODDY with Virtual Private Network (VPN) services, which include: Voice and data transmission between OPS ODDY installation points. Controlled data transmission from (to) OPS ODDY installation points to (from) the Internet. Controlled voice transmission from (to) OPS ODDY installation points to (from) local, national, international, mobile telephony networks. Telephony management services (installation-termination) for all internal calls from ODDY and external calls to ODDY (incoming and outgoing). The third large project undertaken and completed by FORTHnet in 2004 is the Networking of Public Health and Hygiene Authorities for the 2004 Olympic Games project. This was awarded at 52,000 (VAT excluded). The project was delivered and operated regularly during the 2004 Olympic Games. 34

35 At the end of 2004 (16/12/2004), the IS BP SMS and FORTHnet SA signed a contract for the Portal Development and Maintenance project, worth 366, Within the framework of this project, FORTHnet will improve the existing website ( of the Information Society Business Programme (IS BP) Special Management Service (SMS), into a portal. The FORTHnet Group of Companies participated in several tenders during year 2004, either as Contractor (FORTHnet/HELLAS NET) or as sub-contractor. Only important tenders (budgets > 20,000) are mentioned in the following list. We have not mentioned small projects (budgets < 20,000) and the numerous sub-contracts (more than 20) undertaken by the Group s companies. Creation and Management of Ministry of Health Portal, Ministry of Health and Social Solidarity, 840, (VAT excluded). Candidate Contractor: FORTHnet-Symmetrics Joint Venture. Modernisation of COUNCIL of STATE IT System, MINISTRY OF JUSTICE, Budget: 3,500, (VAT excluded). Candidate Contractor: Unisystems S.A., sub-contractor: FORTHnet, for construction of a VPN. Customers of the Public sector Accounts Department The Public sector Accounts Department s customer list grew in The following list contains a number of large clients Greek public authorities: IS S.A. IS BP SMS ÅÅÔÔ ESDY ÅÂÅÁ HELEXPO GENERAL STATE LABORATORY S. RHODES MUNICIPALITY SIVITANIDIOS COLLEGE GENERAL YOUTH SECRETARIAT CENTRAL MACEDONIA 1 ST PeSYP Customers FORTHnet SA s customer base is characterized by diversity as it includes industries, banks, service provision companies etc. This diversity allows the Company to obtain detailed information about the needs of many sectors and to provide suitably adapted services. The number of Company subscribers, over time, is presented in the following table: Numberof Subscribers * % Change % Change Dial Up 85,000 95, , Leased Lines 1,766 1, , ADSL - 1,300-10, Domain Names ,710 - Web Hosting 2,530 2, , Co-location/dedicated Hosting Total 89, , % 128, % *The number of subscribers is the one in the end of the year and the term subscriber is not the same as the term user, as a single connection usually serves more than one user. At , the company s third year in the fixed telephony service provision sector, the growth rates in the number of active lines and contracts had decelerated. The following table presents the total number of active lines and contracts (at the end of each year (31/12) for the period : Fixed Telephony % Change (2003/2004) Number of Lines 110, , , % Number of Contracts 59, , , % 35

36 Some of FORTHnet SA s largest customers are presented in the following table: None of FORTHnet SA s customers contribute 10% or more to its sales. COMMERCIAL COMPANIES/CHAINS INDUSTRY 36 STOCKBROKERS/ INVESTMENT SHIPPING COMPANIES ALLIED DOMECQ CHIPITA EFG S.A. EASTERN MED. MARITIME BABYLAND/ JUMBO EURODRIP GENIKI S.A. FESTIVAL CRUISES HILTI HELLAS FLEXOPACK OMEGA S.A. HELLAS FLYING DOLPHINS GERMANOS BATTERIES HENKEL ETHNIKI S.A. MINOAN LINES ATLANTIC SUPER MARKETS MELISSA/ÊÉÊÉÆÁS LEADER S.A. NEDA MARITIME MAKRO SA ROLCO VIANYL NEXUS S.A. MAERSK KAROUZOS SATO PRAXIS INTERNATIONAL S.A. UNITED OVERSEAS BULKERS MARINOPOULOS TASTY FOODS SOLIDUS SECURITIES TOURISM METRO SUPER MARKETS VIVECHROM VALUE CAPITAL AEGEAN AIRLINES FILIPPOS NAKAS MUSICAL GOODS DELTA AGROTIKI S.A. TUI HELLAS ELMEK SPORT ÅÂÏ DEVLETOGLOU S.A. AMPHITRION HOLIDAYS PRAKTIKER HELLENIC OIL ÅUROXX S.A. SABRE HELLAS GLOU MOTOROIL EGNATIA S.A. HILTON VEROPOULOS SUPER MARKETS POCHE HELLAS ALPHA FINANCE ALDEMAR PLAISIO AGET HERAKLIS KONTALEXIS S.A. AMADEUS HELLAS SA PAPASOTIRIOU IOFIL/KANAKIS HELLENIC INVESTMENT FOUNDATIONS / GROUP GROUP ORGANISATIONS CAR DEALERSHIPS/ RENTALS TITAN N. SARROS S.A. ARCHDIOCESE OF ATHENS DAELLAS DAEWOO GAS COMPANY OLYMPIAKI S.A. MEDECINS SANS FRONTIERES SFAKIANAKIS -SUZUKI & DEALERS FAGE P&K STOCKBROKERS ATHENS BAR ASSOCIATION MERCEDES BENZ HELLAS & THRACE AMERICAN-HELLENIC VORIOELLADIKI SA DEALERS PAPERMILLS/DIANA CHAMBER LION HELLAS - PEUGEOT & DEALERS MASS MEDIA PERVANAS S.A. ÅÏÌÌÅ ERGOCAR FLASH MULTIMEDIA SOCIETE GENERALE FRENCH INSTITUTE TOYOTA PATAKI SIGMA S.A. BRITISH COUNCIL TELECOMS ORGANISATIONS ALPHA TV - SKY RADIO HSBC PANTELAKIS S.A. FOUNDATION FOR THE GREEK WORLD TIM HELLAS SA DOL MARFIN LAMBRAKIS FOUNDATION VODAFONE FOUNDATION FOR NATIONAL PRINTING INVESTMENT BANK RESEARCH AND OFFICE TECHNOLOGY COSMOTE DESMI THESSALONIKI STOCK ATHENS MUSIC HALL BROKING CENTRE ORGANISATION IT COMPANIES KATHIMERINI ATHENS STOCK EXCHANGE Ô.Å.Å. BULL LIVANIS FINANCIAL INSTITUTIONS MINISTRIES/ STATE ORGANISATIONS BYTE COMPUTERS SUNDRY COMPANIES MULTIFIN INVESTMENTS BANK (PIRAEUS GROUP) KEPYO ALCATEL BODYLINE DIAS INTERBANKING SYSTEMS ASDA SPACE HELLAS DELOITTE & TOUCHE EGNATIA BANK STATISTICAL DEPARTMENT XEROX BBDO HELLENIC BANK MINISTRY FOR AGRICULTURE SINGULAR HELEXPO INVESTMENT BANK OF MINISTRY FOR PUBLIC GREECE ORDER HEWLETT-PACKARD ICAP ETVA MINISTRY FOR FOREIGN AFFAIRS DELTA PLIROFORIKI INFORM LYKOS LAIKI LEASING (LAIKI MINISTRY FOR INTERNAL GROUP) AFFAIRS POULIADIS & Co ERNST & YOUNG NOVA BANK OLP TECHNICAL COMPANIES/ MANUFACTURERS JETOIL/MAMIDOIL EMBORIKI BANK ÏÁÅD KTISTOR S.A. EYDAP GENIKI BANK TSMEDE AEGEK SEAFARM IONIAN PIRAEUS BANK AKTOR PAPADOPOULOS GRAPHIC ARTS INSURANCE RETHYMNON GENERAL HOSPITAL CHANIA GENERAL HOSPITAL

37 THEMELIODOMI HELLENIC SHIP VENIZELEIO GENERAL ALLIANZ BUILDERS DISTRICT HOSPITAL BETANET METAXAS NATIONAL PRINTING AGROTIKI ASFALISTIKI DISTILLERY OFFICE DIEKAT CHAIDEMENOS NATIONALE NEDERLANDEN BENAKI MUSEUM ELL. TECHNODOMIKI FRIESLAND/ NOUNOU ING ASFALISTIKI PROASTIAKOS TERNA DEH EKAB LEON ENGINEERING ARMY GENERAL STAFF NATIONAL CADASTRAL 37

38 ANNUAL REPORT NETWORK INFRASTRUCTURE Network Topology The Company s points of presence in Greece more than 73 - are shown in the following chart. These points of presence cover more than 90% of the Greek population with respect to permanent telecommunications access, while for service access via dialup or call by call, cover 100%. The ÁÔÌ Backbone allows maximum use of the Company s backbone providing flexible management, capacity and use of multiple alternative high speed links. Quality of the service provided is a basic feature of the telecommunications services provided by FORTHnet. Specifically, the ÁÔÌ Backbone allows creation of connections with guaranteed Committed Information Rate as well as predictable delays from point to point. The use of such services is necessary for integrated image, sound and data network applications. Simultaneously, transparent network interconnection is achieved, with respect to the application, using the Frame Relay protocol for connecting users. This allows FORTHnet S.A. to provide connections for applications such as switch board integration, interconnection of local networks, connection of dummy terminals to hosts and remote PC Operation. Based on that, many large companies with a network of branches throughout Greece have managed to lower their operational costs thus achieving rapid and effective overall branch management. For large urban centres in particular, FORTHnet S.A., has developed additional telecommunications hubs at selected points with the intention of lowering telecommunication costs for its customers. The following map depicts FORTHnet s network in May