Economy puts further pressure on OTE’s revenues

Greek telecoms group OTE has blamed adverse economic conditions and reduced consumer activity across its domestic and southeast European operations for a 12.4% year-on-year drop in revenues to EUR937 million (USD1.29 billion) in the fourth quarter of 2010. As a result of reduced income – indicative of a 6.6% decline in Greece’s gross domestic product (GDP) in the fourth quarter – the Athens-based operator’s domestic turnover decreased significantly in both fixed and mobile telephony, whilst fixed line sales at RomTelecom in Romania also recorded a double-digit percentage decrease. Revenues at OTE’s Cosmote mobile units in Bulgaria, Romania and Albania showed greater stability. The group – part-owned by Germany’s Deutsche Telekom – also reported a consolidated net loss of EUR91.7 million in October-December 2010, partly due to additional extraordinary financial payments of EUR129.8 million imposed on OTE for voluntary retirement programme (VRP) costs in 2005-06, a decision which the incumbent telco says it is appealing against. OTE’s EBITDA fell to EUR335 million in Q410, down by EUR77 million year-on-year. Operating expenses, excluding depreciation and amortisation and charges related to the VRP, amounted to EUR886.4 million in 4Q10, down by 12.4% compared to the same quarter of 2009, primarily due to lower rates of domestic telecoms operators, lower cost of telecoms equipment, and efforts by OTE to reduce costs across all activities, which resulted in lower wage costs and other expenses.