Hellenic Telecommunications Organization SA

ATHEX:HTO

Earnings Call Transcript 2021-Q1

[Operator]

Ladies and gentlemen, thank you for standing by. I'm Constantino, your Chorus Call operator. Welcome, and thank you for joining the update conference call and live webcast to present and discuss the first quarter 2021 financial results. [Operator Instructions] The presentation will be followed by question-and-answer session. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Michael Tsamaz, Chairman and CEO; Mr. Babis Mazarakis, Chief Financial Officer; Mr. Panayiotis Gabrielides, Chief Marketing Officer, Consumer segment; and Mr. Evrikos Sarsentis, Head of IR and M&A. Mr. Tsamaz, you may now proceed.

[Michael Tsamaz, executive]

Thank you. Good morning or good afternoon to all of you, and welcome to OTE's First Quarter 2021 Earnings Call. In Greece, we delivered a very solid start for 2021, just 1 year after the beginning of the global health crisis. Compared to 2020, where much of the first quarter was spared from the crisis, we recorded higher revenues and a significant improvement in EBITDA and margin. Retail service revenues in both fixed and mobile were even well before -- well above the 2019 levels. So we are comfortably above pre-pandemic levels, a resilience that is probably worth noting in the European competitive landscape.

Once again, progress was driven by the speed, availability, and quality of our broadband offering and the strength of our brand. For the second quarter in a row, we had record fiber additions and our fiber passed the 1 million customer milestone in March. In mobile, if we exclude roaming, that will remain impacted as long as travel is limited, sales revenues are up. While we don't expect the competitive pressure to get any easier, quite the contrary, we think that we are well positioned from all angles to continue succeeding.

In a tough market, the performance of our Romanian mobile business primarily reflects its ongoing split from fixed operations. We are confident that the completion of this move [ TKIM's ] emergence as a competitive stand-alone operator will lead to better numbers going forward.

So we are firmly on the growth track, benefiting from our long-standing investments in technology and customer service. We're also improving our profitability, leveraging the structural moves we have made to turn ourselves into a leaner organization while continuing to manage our cost base with maximum efficiency. And we are well on track to deliver the cash flow required to meet our shareholder remuneration targets.

2021 promises to be an important year for Greece and OTE. The ambitious Greek recovery plan, the so-called Greece 2.0 program, aims at emerging stronger from the health crisis by closing gaps that have affected the competitiveness of our economy in the past. It encompasses a significant digital transition pillar that we expect to contribute to, in proportion with our presence in the market.

Fiber infrastructure, 5G networks, big government, digital transformation of companies. These are all areas in which we have gained leading expertise and strong positions. And these areas are clearly recognized as national priorities.

In the shorter term, we also continue to expect gradual improvements in our environment. While it might not return to 2019 levels right away, tourism should benefit from widespread vaccination and the easing of mobility restrictions. This will help many businesses, our customers that have been closed or constrained for over a year. And more directly, this should support roaming.

So with a solid first quarter behind us, we are confident in our ability to deliver a strong 2021, to contribute to the modernization of our economy, help our clients recover from the crisis, support our employees in their aspirations, and reward our shareholders. Now I'll ask Babis to review our performance in the quarter. Babis?

[Charalampos Mazarakis, executive]

Thank you, Michael, and greetings to all of you from me as well. In this first quarter, we had another very solid and very pleasing performance in Greece, at both top line and profitability levels.

At the group level, this is temporarily overshadowed by the impact of the split of our Romanian fixed mobile operations to concentrate on the latter. I remind you that the Romanian fixed line operations are accounted for as discontinued operations. We continue to expect closing of the disposal in the second half of this year. I think it's important to note, right from the start, that most of the drop in Romanian activities is transitory and we continue to be encouraged by the operating performance in what is clearly a difficult market.

Let's now begin with group revenues, which were EUR 788 million in the first quarter, a drop of 1.2% or less than EUR 10 million compared to the first quarter of last year. As you recall, the 2020 period was particularly strong and still largely untouched by the COVID crisis. We didn't close our shops until mid-March and Romania posted sharp top line growth at third quarter. Under these circumstances, the modest decrease in revenues is a good performance.

Group adjusted EBITDA after leases rose by 1.6% to over EUR 312 million in the quarter, reflecting our efforts to curb our cost base, both structurally with recent restructuring efforts, and through ongoing discipline. Consequently, group adjusted EBITDA margin jumped 100 basis points to 38.2%.

Turning now to Greece. Total revenues of EUR 717 million were up 1.4%, with total fixed revenues down less than 1% and mobile up more than 5%. In Greek retail fixed services, revenues were down 0.6% in the quarter. Another outstanding performance in broadband yielded a revenue increase of 7.2%, roughly in line with the broadband revenue growth rate in 2020.

On the other hand, TV revenues were down 9% due to the continuing rebates we offered cafes and shops that have been shuttered due to the lockdowns, where we are essentially freezing their accounts until they are allowed to open. This has now happened as of last week. But in the meantime, it has been costing us EUR 2 million or more each quarter.

In addition to the discounts given to cafes and restaurants, some ARPU dilution comes from the growing number of over-the-top subscribers. Overall, the total number of subscribers was up almost 4% from Q1 last year to 578,000, but all of the growth is attributable to the over-the-top media service. We are working across our offering to stabilize our TV revenue streams.

In broadband, we had the second consecutive quarter of record fiber additions with 60,000 new subscribers, bringing the total over to 1 million mark for the first time. We are also making further headway with regards to speed, as subscriptions in excess of 100 million bps now represents 17% of the total as compared to 8%, 1 year ago. In absolute terms, this represents a near trebling in the number of high-speed subscribers.

As we have discussed on several occasions, we are steadily and rapidly expanding our fiber infrastructure and our subscribers are upgrading their service. The need for reliable, ever faster service supports our competitive position and maintains ARPU gains competitive price dilution.

Almost 3/4 of the country is now covered by our FTTH or vectoring, and our fiber network continues to expand, making OTE, by far, the largest fiber network provider in Greece. Expanding availability and take up continue to support our growth.

ICT revenues were up more than 3% in the quarter, driven by System Solutions projects. With a number of new projects due to be auctioned in coming quarters, we expect this revenue stream to continue growing. Revenues from wholesale were down less than 2% due to lower international traffic.

Greek mobile service revenues of EUR 222 million were down just 0.4%, pursuing the steady recovery quarter after quarter since the trough of the crisis in Q2 last year. Last quarter, of course, is the lowest of the year in terms of visitor roaming contribution, which we hope and expect to see rebounding as borders reopen. Excluding roaming, service revenue was essentially unchanged, marking a third quarter of consecutive narrowing of the year-on-year decline. This is all the more striking that Q1 last year had been a strong quarter, pre-COVID, and included an extra day. Prepaid revenues were back in positive territory, up nearly 4% in the quarter, boosted by the higher value bundles, which were reduced last year.

Postpaid trends were less favorable against a strong Q1 last year and [ impeded ] by certain regulatory measures, but we expect them to start recovering from the end of this quarter with new -- more plants. Outbound roaming for its part, should continue to be [ bucket ]. 5G launched late last year, is now in full swing and already covering approximately 45% of the population.

We have initiated the shutdown of the 3G network, which will be completed in Q4 of this year, releasing spectrum to be efficiently reformed for voice traffic. Revenues from handset sales jumped in the quarter, reflecting higher sales of digital projects as customers switch to higher-value products as well as the impact of shop closures in late Q1 2020.

The positive trend in this revenue line should continue as the government has launched a program to subsidize sales of tablets and laptops students. Turning now to operating expenses. Excluding depreciation and amortization and one-offs in Greece, the total EUR 404 million in the first quarter, virtually unchanged from the same period last year.

Personnel expenses were down nearly 9% or over EUR 10 million. While we accommodated some increase in cost for extra provisions on network support, the savings from our restructuring programs provide confidence and will continue growing EBITDA in the coming quarters.

As a result of the higher handset sales I mentioned, device costs were up nearly 38%. Excluding this factor, recurring operating expenses would have been down mid-single digit. First quarter of 2021, adjusted EBITDA after leases in Greece was up 3.5% at over EUR 298 million, with a margin of 41.6%, up 80 basis points.

Let's now move to Romania, where we had revenues of EUR 77 million were down nearly 20% from the comparable figure in the first quarter of 2020. However, more than 80% of that drop comes from one-off ICT projects related to WiFi equipment in the country's schools that have happened to be booked by mobile operations in Q1 2020 and they had no equivalent this year.

For their part, service revenues were down 7% to EUR 55 million. In a resilient prepaid market, our mobile business is successfully defending its share. In the meantime, the company's strategy of migrating subscribers from prepaid to postpaid is paying off in terms of expanded user base, making the company the fastest-growing postpaid provider in the market.

We expect postpaid revenues to start following a similar trajectory. Greece's revenues were unchanged, but at a very low level in the current circumstances. We expect improvements in Telekom Romania Mobile's situation going forward, particularly after the second half of the year.

Operating expenses, excluding depreciation and amortization, were down more than 16% in the quarter, with significant cost reductions in personnel and marketing. However, these were partially offset by a number of one-offs related to the separation of fixed and mobile activities, notably in accounting and IT. As a result, Telekom Romania Mobile's adjusted EBITDA after leases was a little below EUR 3 million in the quarter. Stripping out one-offs and impacts clearly associated with the health crisis, EBITDA will have been almost unchanged.

We are aiming to reach the EUR 40 million EBITDA target once the effect of the separation is completed later this year and the operational restructuring following the separation will be gradually implemented throughout the year.

Going now to the rest of the P&L. Group operating expenses, excluding depreciation and amortization and one-offs, was EUR 469 million, down about 3% for the 2020 first quarter. Group personnel expenses were down nearly 9%, further [ in the way ] the main reason for this decrease. As noted earlier, group adjusted EBITDA after leases was EUR 301 million.

Interest expense was once again down sharply at just EUR 12 million as total debt and discontinue -- and its cost continue to drop. Income taxes of EUR 49 million were up 21% in the quarter due to the higher profitability, while the recently announced reduction in corporate income tax rate we depicted in our figures, following the enactment by the relevant authorities.

Turning now to the cash flow statement, where we had the adjusted CapEx just short of EUR 100 million and was exceptionally low this quarter, down by 1/3 compared to the same period of last year. This is largely due to a difference in timing of TV content payments, notably related to the UEFA Champions League that has been paid in Q1 last year, while this time, it was paid in Q4 2020. This will rebalance over the coming quarters, and we continue to stand by our EUR 550 million CapEx guidance for the full year.

Adjusted free cash flow after lease was EUR 163 million, a year-on-year decrease of more than 50%, largely due to the different CapEx cadence. Reported free cash flow was EUR 117 million in the quarter and includes EUR 42 million in payments related to voluntary exit plans that have been completed, taking into account our traditional quarterly patterns and the deferred TV content payments, this supports our EUR 480 million full year target. And of the year 2021 shareholder remuneration guidance that [ expect ] on it.

So after a very solid first quarter, particularly in Greece, we are optimistic we reiterate our guidance for the full year. The reopening measures recently announced in Greece, but also across Europe, bode well with a gradual return to normality, including a better touristic season. And more generally, we see more supportive economic conditions as we, ourselves, already support the economic development and transformation of our environment, as also Michael pointed out in his introduction.

So on this note, Michael, Mr. Gabrielides and myself, as well as our colleagues around the table are ready to take your questions. Operator?

[Operator]

[Operator Instructions] The first question is from the line of Stamatios Draziotis with Eurobank Equities.

[Stamatios Draziotis, analyst]

A few from my side actually. My first one has to do with Greek Mobile. You talked about the quite resilient Q1 service revenues, just slightly lower year-on-year despite the tough comp. You talked about prepaid turning the corner maybe sooner than anyone could have anticipated. Could you just tell us the extent to which you feel we might see some ARPU accretion on the postpaid side as well, be it more from pre to postpaid migration. So that's our first question.

Secondly, from the wording in the press release, I get the feeling that you are somewhat more confident about the outlook for the rest of the year than you might have been a few years ago -- a few months ago, sorry, especially as comps get easier. Is this true? And if yes, could you tell us what drivers you think will play out in the second half of the year besides the sequential improvement in mobile, that is?

And thirdly, on the recovery fund, could you just quantify to the extent you can, the addressable market, mainly the one you feel relates to projects in which you can participate?

[Michael Tsamaz, executive]

Thank you for the questions. First of all, taking in the order you place them. In the Greek Mobile, I think we were clear that in Q1, which, as you said, has the tough conversions with last year. If we take out the roaming effect, which is due to the travel restrictions, then the service revenue would have grown, would have been slightly above last year.

On the back of, A, the prepaid rebound that you mentioned. And also, they continued more for more, which is coming ahead. We pointed out in the discussion before that this has been impeded by some regulatory decisions regarding the so-called value-added services, which has to do with the regulation around all these 5 digit things, 5 digit services, which are gradually being a little bit more difficult to implement. That takes out some revenues, however, not very big in margin because there is a high cost on this.

So as we go ahead and we progress through the year, also collected with your second question about the confidence, it's not whether we feel confident or not. The most important is how our customers feel. And we hope that with the gradual reopening of the market and the gradual, let's say, the start of the economy in the segments that were somehow not very active in the previous quarters, we will see a better predisposition from the customers to engage our services.

What does it mean? Basically, it means more for more, that more people will be able to or willing to get into the higher buckets of data with a little bit of higher ARPU. And we continue to see the prepaid migration to postpaid. So all this is what we expect will fuel the recovery in the coming quarters.

And as we said, the biggest trigger here would be the continuation of the gradual restart of the economy. This is very crucial together with the touristic season that will restore income to certain segments of the economy that because of the pandemic they were under pressure.

The recovery fund, it's something that is definitely working in this direction to accelerate or to enhance the recovery of the economy. And while there are segments that are more related with us like digitalization programs or the modernization of the, let's say, value services, digitalization of value service of the state, which are expecting to generate significant ICT programs.

This is the more direct for which we are very well prepared to take on board. However, also, all the other funds that are part of the recovery program will also offer economic opportunities for the wider population. And in any term, either exporting, importing consumption investments that will also trigger demand for our services. So it's a combination of all the things that you mentioned. And our outlook is pointing to the reading week by week, the start of the economy, which is quite essential for all of what we're discussing here.

[Stamatios Draziotis, analyst]

May I just quickly follow-up regarding the Greek Mobile. Could you talk about the time line -- the commercial time line for 5G?

[Michael Tsamaz, executive]

The commercial time line, first of all, this is related to 2 things. One is the handset availability, which is coming gradually to the market. And we expect a further flow of these handsets in the coming quarters. We are expanding our population coverage. We said it will be around 45% of population, which is quite promising. And there's no magic stick behind the 5G service take up. It's a combination of handsets, average, and also the appropriate applications that will trigger the acceleration of the users of 5G.

We are doing our part in terms of assuring the coverage there, which is what we can influence. Immediate commercialization of the handsets wherever they are available. And of course, for the industry solutions, which is a different mode, we are very well prepared with integrated solutions. For vertical industry segment solutions in various segments of the economy that will utilize the 5G opportunities.

[Panayiotis Gabrielides, executive]

What's important to give here is that our deployment plan since last Christmas is well ahead of time. And we are quite happy with this. This pace will continue to the end of the year.

[Operator]

The next question is from the line of Georgios Ierodiaconou with Citi.

[Georgios Ierodiaconou, analyst]

A couple of questions from my side as well. The first one is on the follow-up on the European Recovery Fund. Your current company earlier today mentioned that they thought the impact in countries like Greece could be much higher than for the rest of the group. And I appreciate some of it is hard to quantify. But what will be useful is if you can give us an indication as to when do you expect this to perhaps start benefiting your numbers, whether it's more on the ICT side for fixed or whether there could be a broader benefit beyond that. Just to get a bit of an idea of when should we expect to see some of this benefit.

My second question is on fixed wholesale. Just to understand, you mentioned that the international transit traffic was responsible for the weaker revenue trend this quarter. Is it possible to perhaps give us indications as to how the higher-margin fixed national wholesale is trending? And anything we should bear in mind there.

And then a final question is a broad one around the market conditions? Is there anything you are seeing which points perhaps to more competition in the market or any changes that we should bear in mind, either better or worse from some of the behavior of your competitors?

[Michael Tsamaz, executive]

Regarding the recovery funds, as Babis described it, we will benefit from 2 directions. One is the, let's say, the direct benefit for whatever projects will be selected to undertake from the budget -- the cost of the digitalization of the country. And this is about approximately of EUR 7 billion, if I remember well the number.

So okay, this doesn't mean that we'll take all this, but we will -- we are very well prepared through our ICT, let's say, expertise to bid for some of these projects. And we have also -- which is very significant, we're expecting an indirect impact on the business. This has to do with the economy and all the businesses that will improve their performance because of all these subsidies.

And this -- the planning has already started. The ministry is very well tuned towards this direction. So you will start to see in the, let's say, towards the end of the year or the beginning of next year, you will see some of these benefits. But this is a long-term process because this -- the cover, in fact, will not be used in this year and next year. It has long span. But overall, this makes us be quite optimistic.

What's important here, Mr. Ierodiaconou, is that our company is very well prepared on all sites. It's very well prepared in being one of the, let's say, prime or preferred candidates, because of the knowledge, and because of the expertise, and because of the efficiencies that we have in plus reliability that we have proven during all these years when we have undertaken ICT projects, especially projects which were directed for the -- towards the digitalization of the country.

We're well prepared on our commercial side in order to be able to address the new needs of companies and businesses, which have been or will be developed because of the additional funds and because of the modernization of the private sector. And we have the right people here who will be able to support all of this.

Keep in mind that, for example, I said about -- I talked about reliability of our services. I will give you a couple of examples. You're probably aware of how well they have been functioning. The e-prescription, how do you call, the [indiscernible] which have proven to do orders during this pandemic, e-prescription.

Yes. And lastly, all this software and all this -- many of the government [ GR ] that you see, the automation that is happening in the -- have contributed significantly to the development of all these services.

[Charalampos Mazarakis, executive]

In the other questions you placed. First of all, on the fixed call sale, the -- yes, the reduction in revenue was mostly because of the industrial traffic, which has usually low margins. Regarding, let's say, the national traffic, this is fairly stable in terms of revenues.

And there are 2 moves there. One is that we have due to the glide path, a reduction of the traditional wholesale income that comes from the traditional, let's say, ADSL lines. And there is an increase on the wholesale part, which comes from wholesaling connections for VDSL and vectoring.

So the mix of the 2 was out and therefore, for the natural wholesale, which has also the good margin, it was stable. On the market conditions, I don't think we have seen anything different. It's as intense and as steep as always. Maybe I would say that the more we expand our broadband base, the more we see also the market moving towards offering to the customers, to their customers, the fiber Ethernet connections.

And this by itself is intensifying the competition, which, again, as I said, has been always quite steep. Same in mobile, where the competition has been and is quite intense with the other players. So nothing new versus what we have seen in the past and continues to be a day-by-day battle.

[Operator]

Next question is from the line of Kim, Ivan with Xtellus Capital.

[Ivan Kim, analyst]

Two questions from me, please. Firstly, do you expect any mobile service launch from Forthnet? And just related to them, whether you see any pressure in broadband and TV specifically from them? And secondly, more strategically, I guess, on FTTH. So you cover about 10% of Greek households by the end of this year. Where do you see that coverage expanding longer term? And do you expect the majority of your fiber network to be FTTH? Is there a demand for that?

[Michael Tsamaz, executive]

On the Forthnet side, Forthnet has been very active in marketing their fixed lines, the fixed line and pay TV offerings in the previous months. And it continues to be quite intense and quite aggressive.

Now on the MVNO part, you asked for, we all know that there have been a kind of agreement to launch the MVNO on the back of the Vodafone network. This has been for some time now. So it remains to be seen whether this would be translated into a kind of launch in the coming quarters. But this is going to be the MVNO proposition of Forthnet that has already been more or less announced. So no, nothing new there versus what we had seen.

On the fiber-to-the-home, we expect to have, as you said, a little bit over 10%, close to 13% by the end of the year, homes passed. We have already announced that our aspirations to reach quickly the 1 million homes passed in the coming, I would say, a couple of years, more or less. And this is our plan to continue and if it works, to keep growing it.

And what we also see gradually is that why we are passing the homes. Then it comes to the part to connect the customers. Obviously, there is a lag in time there. But we are pleased with the take-up of the service so far. We are approaching now -- we have around 25,000 connected customers on total passed homes of about [ 360 million ]. So it looks like the market is moving towards this direction. And this is going to be the name of the game for the coming periods.

[Ivan Kim, analyst]

May I just follow up, where do you think -- so it's pretty much the only fiber-to-the home infrastructure widely available. So where do you see the take-up rate normalized? Where can it reach?

[Michael Tsamaz, executive]

To be precise, also, competition has the license to develop their own fiber to the home in some areas, and they are doing it. So it's not only our infrastructure. We have certain areas of the country where competition is also rolling out the fiber to the home. But there's no overlapping on these 2 investments because there are priorities right now that clearly do not point out overlapping.

And now where this coverage will stop in terms of homes passed, actually, with our target of 1 million -- 4 million homes passed in the next couple of years and tough competition is also rolling out, this can easily point out to a kind of coverage of about 30% in the coming couple of years, maybe 2 to 3 years.

And then, I guess, it comes with the demand because the current rollout is based on demographics and based on the need of the customers in the areas. So there is a gradual priority list, let's say, in areas where we roll out of fiber to the home.

So the immediate step to your question is to get to this million line from our side. And then competition will have their own, and this would be about 30% coverage of the country. That's with fiber-to-the-home. Let's not forget that almost another so or more also will be covered with video service vectoring, which offers [ 100 million, 200 million bps ] which, for the time being, for some areas, is quite enough to cover the demand.

So if we look at the whole country, after we reach our fiber-to-the-home intermediate target, it will be like -- the target will be covered almost with 80% or even more with fiber, let's say, type of [ readiness ].

[Ivan Kim, analyst]

May I just draw on this quickly. And for the take up rate, so right now, it's below 10%. So do you think it can be 25%, 30%, 50% longer term? The actual customers to homes passed.

[Michael Tsamaz, executive]

Yes, as I said, the current metric is not indicative because we have 25,000 -- over 360 homes, 1,000 homes. But that's not the going rate. It is about 8%. But if we look at more matured rollout and the more matured commercialization of our fiber-to-the-home rollout, then conversion rate, as we call it, from home passed to customers would reach 25% even more. Yes, of course. I mean that's the purpose.

[Operator]

Next question is from the line of Patrick, Maurice with Barclays.

[Maurice Patrick, analyst]

Maurice here. A couple of telcos have talked about OpEx going up in the second quarter as they sort of refresh their organizations after 12 months of focusing on preserving cash flow. I know you do have structural cost-cutting mechanisms in place. But I'm just curious as to whether or not there are any cost lines, which may have taken a pause for the last 12 months and might come back as the market reopens?

And the second question, and apologies for sort of asking a basic Greece question, but I don't get to travel there anyway much, but certainly not in the last 12 months. But could you explain to us a bit more about consumer confidence generally through your own experiences? How is it trending in the last quarter? I mean are you seeing consumer confidence returning from an OTE perspective. That would be very helpful.

[Michael Tsamaz, executive]

If I can start from your second question. I mean the confidence -- consumer confidence is very difficult to measure. I mean there's a KPI, which points out to specific that one. But if we look some macro and micro KPIs, I can point out to the fact that in 2020, the whole year, the disposable income of, let's say, the households was flat. That's what the statistics say. The private consumption was down 5%.

This has led to a kind of increase in the bank savings, in the savings in the banks, by almost, if I recall, around EUR 19 billion. And this is -- these are hard facts, which says a basic thing that in 2020, where the confidence of the consumers was down, people refrain from spending in many areas.

So I mean, a way to look at that -- to have a kind of indication that this mood changes is if we see in the coming quarters that the private consumption will increase. Again, maybe some of the bank savings will go down because people will start spending these things that they refrained from during the lockdown.

The other thing is that if we look at the surrounding KPIs that are trying to measure this case, we see an increase or a more positive tone on the corporate confidence, the confidence of the business as to the -- whether the next months will be better than the previous months, which, in our case, quite obvious because it looks like we are getting towards the opening of the economy, which was not the case in previous quarters. And of course, when the economy reopens, people find back the paychecks and pay salaries, and that's also boost the confidence. So we are closely monitoring all these things because they are essential in creating again a good climate in the market.

On the OpEx side, maybe I'm not quite sure whether in previous communications, it was clear from us, that in 2020, we completed a very wide reconstruction plan with a lot of -- a big execution of combination of measures that has resulted to a restructuring of the cost as well. So what we see now evident as of Q1, we are enjoying -- and we are actually posting booking these savings of this restructuring.

It is true that in the coming quarters when, for example, international travel will be allowed or things will be -- I mean, the things that were restricted like fuels, traveling, et cetera, will be allowed. That cost items will go up but are not anywhere near nullifying the benefits from our restructuring efforts.

So we continue to believe that also in the coming quarters, our OpEx, predominantly in Greece, which is the biggest part of the bill, will continue to perform with a sizable reduction versus last year, reflected in the restructuring plan, despite, as I said, some elements that are expected to increase because we're comparing ourselves with quarters of previous years, where the lockdown restricted some obvious spendings like traveling, fuels, et cetera.

[Operator]

[Operator Instructions] The next question is from the line of Grigoriou, George with Pantelakis Securities.

[George Grigoriou, analyst]

One question going back again to competition. We have read in the press, in the local press that you might be interested in bidding for the TV rights of the Greek Super League football matches. And I remember a couple of years ago, you thought that the Greek football was not good enough, should I say? What has changed actually your mind?

[Michael Tsamaz, executive]

Your voice was not coming clear, but if you ask whether we will go after the Greek Football [ League ], right.

[George Grigoriou, analyst]

I'm sorry if I wasn't clear enough. Sorry, apologies for that. I'm calling from my mobile phone. I just wanted to -- I said we have read in the press that apparently OTE is interested in securing the TV rights for the Super League Greek football matches.

[Michael Tsamaz, executive]

All the previous years, we were not really looking. We were not interested. Now we have started considering, but we are very far from being interested. There are some conditions that have to be fulfilled. So currently, we're evaluating the situation, and we will see how the whole thing is going to develop.

[George Grigoriou, analyst]

Okay. And one last question again about football. The Champions League matches, the rights. When is the next round coming up?

[Michael Tsamaz, executive]

Back in December, we -- there was the auction for the next 3 years. So starting of the new season, September 2020 and for 3 years, we will have secured the rights. So the next auction will come after 3 years.

[Operator]

[Operator Instructions] There are no further questions at this time. I will now turn the conference over to Mr. Tsamaz for any closing comments. Thank you.

[Michael Tsamaz, executive]

We thank you all for your attention, questions, and interest in OTE. We are pleased with our performance in the first quarter, confident in our prospects for the rest of the year, and I'm looking forward to our next discussion in early August for our half year results. In the meantime, have a nice day, stay healthy, and be safe.

Thank you, operator.

[Operator]

Ladies and gentlemen, the conference has now concluded and you may disconnect your telephone. Thank you for calling, and have a pleasant evening.