Kostas Nebis, Chairman and Chief Executive Officer of OTE Group, addressed increased competition in the telecoms market and OTE’s efforts to retain its customer base during a conference call today on the group’s third-quarter 2026 financial results.
Pressure from PPC
Asked about PPC’s aggressive pricing policy, Mr Nebis confirmed that competition in the fixed-line market had intensified since the start of the year. He stressed, however, that OTE had managed to keep its retail broadband customer base broadly stable, with a market share of around 50%, including on a year-on-year basis.
He said key tools for retaining customers included the fibre-to-the-home (FTTH) network and its ongoing expansion. Fixed wireless access (FWA) also plays a pivotal role, enabling the group to counter pressure from satellite services while differentiating its commercial offerings.
Alongside retaining subscribers, OTE is also seeking a marginal increase in average revenue per user (ARPU) by making use of different opportunities to upgrade its services. These include moving customers from copper networks to FTTH or FWA connections, as well as improving Wi-Fi connectivity in the home through mesh Wi-Fi systems and FTTR (Fibre to the Room) solutions.
According to Mr Nebis, these initiatives help offset some of the pressure from the highly competitive pricing environment, as well as the reduced contribution this year of voucher-subsidised connections to the FTTH customer mix.
Efforts to upgrade services for business customers are equally important to the growth of fixed-line service revenue, with a shift from traditional offerings to advanced, software-based connectivity solutions (software-defined solutions).
He said these initiatives had kept OTE’s retail fixed-line service revenue in positive territory, continuing the trend of previous quarters and in line with the group’s full-year guidance.
Mr Nebis highlighted PPC’s role in shaping competitive conditions, saying that, in addition to Starlink, its entry into the market had significantly increased competitive pressure.
“It is not just the numbers PPC is generating. It is the fact that it is creating a much more competitive environment. PPC is not acting alone; the market is responding too,” Mr Nebis said, stressing that competition overall had intensified, a trend that had become particularly apparent in the final months of 2026.
On OTE’s response, he said the effectiveness of its strategy was reflected in its customer-base figures, which remained broadly unchanged in broadband connections.
“Yes, this comes at the cost of some pressure on average revenue per user (ARPU), which we are trying to offset by offering customers more services, as I mentioned earlier, through the move from copper to fibre, mesh solutions or pay-TV,” Mr Nebis said.
He added that these were important tools which, combined with the move to advanced software-based connectivity solutions (software-defined connectivity) for business customers, enabled the group to keep total fixed-line service revenue slightly higher year on year.
Competition with Starlink
Mr Nebis said that when Starlink entered the Greek market about three years ago, OTE began to face difficulties retaining customers served by low-speed copper networks, and lost some of its customer base as a result. He noted that the development affected other providers too, but OTE more than most because of its larger market share in areas where Starlink established a strong presence.
He said this continued until January 2025, when OTE launched its fixed wireless access (FWA) service, aiming to offer better speeds to customers still served by the copper network and curb Starlink’s growth at its expense.
Although Starlink had grown significantly in the Greek market, Mr Nebis said its growth began to slow in early 2026, and in recent months the company had been operating at roughly the same level as in the corresponding period a year earlier. He linked this to OTE’s FWA customer base growing by more than 100,000 subscribers in less than a year and a half.
“We are essentially using fixed wireless access to counter Starlink’s momentum and stop it growing at our expense,” Mr Nebis said.
He added that FWA was primarily a transitional solution, as the group planned to move these subscribers gradually to fibre connections as its FTTH network coverage expanded. In areas where fibre deployment was not economically viable, FWA would remain the final access technology.
Could PPC enter the mobile market?
Asked separately about the possibility of PPC entering the mobile market through the next spectrum auction, Mr Nebis said the public consultation had concluded, but no decisions had been taken on the timetable or structure of the process.
“Nothing has been officially decided yet, including the timetable and structure of the future auction,” Mr Nebis said, adding that OTE was awaiting greater clarity from the regulator, which had been without a chair since August.
Asked about the amendment to contract terms last July, which allows prices to be adjusted in line with the annual consumer price index, subject to a cap of around €2.80, and the possibility of increases taking effect from February 2027, Mr Nebis replied:
“We have adjusted the terms and conditions of our contracts to align, I would say, with the rest of the market in applying the consumer price index. This certainly gives us the appropriate flexibility, as well as the readiness to apply it every year, at the start of the year.”
On the possibility of increases in 2027, he said: “As for what we will do, we will see. It depends on various factors and considerations we need to take into account, including, of course, market conditions, the value we offer customers and our overall commercial strategy. So I have nothing further to comment on at this point.”
Third-quarter performance
OTE Group’s revenue stood at €882.7 million in the third quarter of 2026, up 1% year on year. Adjusted EBITDA (AL) rose 3.1% to €371.4 million, with the corresponding margin improving to 42.1% from 41.2% a year earlier.
Operating profit (EBIT) increased by 6% to €236.9 million, while capital expenditure totalled €176.4 million, up 17.8%. Free cash flow after leases rose 27.7% to €137.4 million, while the group’s net debt stood at €683 million at the end of September.
Income tax expense was €53.3 million, compared with a positive amount of €77.8 million in the same period last year, when a one-off positive impact of €129.8 million had been recorded from the investment in Telekom Romania Mobile.
FTTH continued to gain strong momentum, with 52,000 net subscriber additions in the quarter, taking the total customer base to 739,000. FTTH network coverage had been extended to 3 million homes, of which 2.3 million had an active access line.
2026-27 targets
OTE Group maintained its full-year 2026 targets, forecasting growth of around 3% in adjusted EBITDA (AL) and investment of approximately €600 million, with a focus on further expanding its FTTH network and 5G Standalone network.
Free cash flow is expected to come in at close to €750 million, including one-off tax benefits, while excluding the impact of these factors it is expected to range between €570 million and €580 million.
For its investment programme in the coming years, management expects annual investment to remain at around €600 million in 2027, as this amount covers all existing and already identified investment plans, with no need to increase it currently in sight.