Hellenic Telecom Organization S.A. (ADR) ((HLTOY)) has held its Q1 earnings call. Read on for the main highlights of the call.
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The latest earnings call for Hellenic Telecom Organization S.A. (ADR) painted a picture of optimism and growth, particularly within its Greek operations. Despite facing challenges in the Romanian market and a decline in wholesale revenue, the company remains buoyed by its strategic initiatives and strong performance in core areas such as Mobile, TV, and ICT. This positive sentiment suggests a promising outlook for the company as it navigates the fiscal year 2025.
Positive Start to Fiscal Year 2025
The OTE Group kicked off 2025 with a commendable performance, reporting increased revenues and EBITDA in Greece. Key segments such as Mobile, TV, Broadband, and ICT contributed to this growth, highlighting the company’s robust market position and strategic execution.
Strong Mobile and TV Performance
The Mobile segment demonstrated robust growth, particularly in the postpaid customer base, while the TV segment achieved impressive double-digit growth. This success was bolstered by a strategic partnership with Nova, underscoring the effectiveness of OTE’s collaborative efforts.
5G and Fiber-to-the-Home Expansion
OTE continues to lead the way in 5G technology, with Cosmote operating the only commercially available 5G stand-alone network in Greece. The company’s fiber-to-the-home (FTTH) expansion is progressing well, with plans to reach 2.1 million homes by the end of 2025.
ICT and System Solutions Growth
The ICT segment posted strong results, with an 18% growth in the System Solutions business. This growth reflects OTE’s commitment to technological innovation and its ability to meet the evolving needs of its customers.
Successful Prepaid to Postpaid Migration
A strategic increase in the minimum top-up for prepaid channels has successfully driven migration to postpaid plans. This shift has improved average revenue per user (ARPU) and enhanced customer retention, indicating a positive trend in customer loyalty.
Challenges in Romania
Despite overall positive performance, OTE faces significant challenges in Romania, where revenues dropped by 8%. Competitive pressures, reduced handset sales, and a new tax on revenues have all contributed to these difficulties.
Wholesale Revenue Decline
The company experienced a nearly 5% decline in wholesale revenues, attributed to lower margin international transit traffic and increased competition from network build-outs. This remains a concern for OTE as it seeks to stabilize this revenue stream.
Technical Issues During Call
The earnings call was marred by technical difficulties, leading to interruptions in communication. While this did not overshadow the positive financial results, it highlighted the need for improved technical support during such important communications.
Forward-Looking Guidance
Looking ahead, OTE has reiterated its guidance for a 2% EBITDA growth in Greece for the full year. The company remains focused on technological innovation, with significant investments planned for FTTH and 5G networks. Despite challenges in Romania, OTE’s strategic initiatives and growth in key segments provide a solid foundation for future success.
In conclusion, Hellenic Telecom Organization S.A. (ADR) has demonstrated resilience and strategic foresight in its latest earnings call. While challenges persist, particularly in the Romanian market, the company’s strong performance in Greece and its commitment to innovation suggest a positive trajectory for the future. Investors and stakeholders can take confidence in OTE’s ability to navigate the complexities of the telecom industry while pursuing growth and technological advancement.