Hellenic Telecommunications Organization SA

ATHEX:HTO

Earnings Call Analysis

OTE reports stable revenues with expected growth driven by TV and FTTH initiatives.

In the third quarter, OTE achieved stable revenues amid challenges, with Greek EBITDA increasing by 1.5%. The company added 31,000 FTTH subscribers, a 65% year-over-year increase, and anticipates the government's fiber subsidy will enhance customer migration to higher ARPU services. A new sports content agreement is expected to boost Pay-TV subscriptions significantly. While overall revenues grew by 2%, Romanian operations faced a decline. For 2024, OTE maintains free cash flow guidance of €470 million, despite recent tax payments affecting reported figures. The company remains optimistic about growth fueled by strategic partnerships and government support in 2025.

Strong Growth in Greek Operations

During the third quarter of 2024, OTE Group reported robust growth in its Greek operations. Revenues increased across key activities, driven by a substantial rise in subscriber numbers resulting from a sports content sharing agreement with Nova. This agreement is expected to enhance the company's market position as stronger anti-piracy measures are anticipated by year-end, paving the way for greater penetration in legitimate TV services.

Fiber Network Expansion and Subscriber Growth

The company is making significant strides in expanding its fiber-to-the-home (FTTH) network. With 31,000 additional customers acquired in a traditionally slow quarter, OTE has recorded a remarkable 65% increase in FTTH subscribers year-over-year, reaching 355,000 total subscribers. FTTH now represents 15% of OTE's broadband base, with penetration exceeding 44% in areas passed by fiber. The government-backed subsidies and positive market conditions are expected to further fuel this growth.

Mobile Revenue and Digital Transformation

In the competitive landscape of mobile services, revenues increased nearly 3%, highlighting the strength of OTE's network and data tariff innovations. The company's mobile service offerings continue to attract customers, particularly through the migration from prepaid to postpaid plans. Data consumption per user surged to 16 gigabytes a month, underscoring the demand for higher data packages.

Free Cash Flow Guidance and Shareholder Remuneration

For 2024, OTE has maintained its free cash flow guidance at EUR 470 million, despite a one-time payment of EUR 33.5 million related to tax settlements in Romania. The company anticipates a reported free cash flow of around EUR 435 million when accounting for this payment. Additionally, OTE has confirmed its intention to distribute EUR 450 million to shareholders in 2024, supported by a significant share buyback program that has already executed over 80% of its planned repurchases.

Market Dynamics and Future Outlook

While overall group revenues grew by 2%, challenges in Romania persisted, where revenues declined by 7% amid a highly competitive market. OTE leadership remains optimistic about the future, particularly with upcoming government subsidies for FTTH services and the comprehensive TV content agreement strengthening user engagement. OTE is committed to transforming into a leading European digital telecom provider by 2030, leveraging its strong infrastructure and strategic initiatives to enhance the customer experience and drive competitiveness.

Anticipated Revenue Impact from Upcoming Changes

Significant future impacts are expected from regulatory shifts in 2025, specifically the removal of the 5% broad tax on FTTH connections and the new promotions that will start translating into higher average revenue per user (ARPU). The leadership projects that these changes will enable smoother transitions to premium FTTH tariffs, improving financial performance moving forward.

Earnings Call Transcript 2024-Q3

[Operator]

Ladies and gentlemen, thank you for standing by. I am Mina, your Chorus Call operator. Welcome, and thank you for joining the OTE conference call and live webcast to present and discuss the third quarter and 9 months 2024 financial results.

At this time, I would like to turn the conference over to Mr. Kostas Nebis, CEO, OTE Group; Mr. Babis Mazarakis, Chief Financial Officer; Mr. Panayiotis Gabrielides, Chief Marketing Officer, Consumer Segment of the group; and Mr. Evrikos Sarsentis, Head of IR and M&A.

Mr. Nebis, you may now proceed.

[Kostas Nebis, executive]

Thank you, Mina. So greetings to all of you, and welcome to our results call for the third quarter of 2024.

Starting with Greece. We reported this morning a solid quarter of operations pretty much across the board with revenues up in the most relevant activities and higher EBITDA, all achieved without benefit from the various revenue drivers we discussed during our last call. The sports content sharing agreement we signed with Nova is boosting total subscriptions for the whole industry. We registered a sharp rise in subscriber numbers in the third quarter with record net additions in September. And as we move into 2025, this will start contributing to our growth. We also expect stricter government measures against piracy to be adopted by the end of the year, facilitating a transition to legitimate TV offerings and resulting in a higher market penetration.

There is too much talked about gigabit, about schemes aiming at subsidizing take-up of high-speed connections and in building fiber cabling were approved by the Greek government last week, and we'll implement it most probably before the end of this month. The 2 coupons will further boost FTTH take-up and, at the same time, cover part of our FTTH cabling costs. In conjunction with the government decision to move the 5% broadband tax on FTTH connections of 100 mega bps and above starting January 2025 as well as the fiber wholesale agreement recently signed with Vodafone and Nova, that will all contribute to the stronger monetization of our extended fiber infrastructure and, of course, to advancing the country's digitization.

Speaking about the wholesale agreements, they have already started to speed up the pace of wholesale monetization of our infrastructure, a development that will become more evident in the coming periods. The developments, along with the ongoing mobile service revenue growth, is fueled by more-for-more data tariff upselling and pre-to-post migration, as well as a rich pipeline of profitable system solution projects, set the foundation for accelerating growth momentum moving into next year.

In the meantime, we have started pushing harder at reducing nonsales physical volumes throughout our channels, accelerating the digitization of our sales and [indiscernible] transactions and transforming our operating and production model. Our goal is to increase productivity and efficiency levels while we keep investing in our fixed and mobile networks, to make sure they reach all potential customers and provide them with the very best customer experience available. Babis will go over some of our achievements over the last period.

Since July, when I assumed this role at OTE, we conducted, along with the rest of the management team, a thorough review of our strategy, reflected on our current position, existing and upcoming challenges. We formulated a refreshed vision, restating our ambition and strategic priorities for OTE looking towards 2030. We clearly want to transform OTE from the undisputed leader in the Greek telecommunication market into one of the top European digital telcos, putting Greece among the most digital-developed countries in Europe and providing the best available infrastructure to all. And we aim to pursue our goals by focusing on our customers and on our people, creating an inspiring work environment for our teams to grow. It will be premature to present the strategic framework at this stage, but we are determined to do so in due time.

Our plans are ambitious and deal with every aspect of our business, with every customer category, with the careers and well-being of our workforce and with the sustainability of our operations. We intend to leverage our membership within the largest Deutsche Telekom family and create even more value for our stakeholders. We are confident that our strategic plans represent the most effective means to leverage our strengths for the benefit of all.

Before passing the mic to Babis for an overview of the third quarter, I want to say a few words about our operations in Romania. As you know, they have been facing challenges for a few years now. This is why we are satisfied to have reached a preliminary agreement with a 2 established market participants. This agreement should assure the future of the operations while allowing us to focus on our key strengths in Greece, where we enjoy a strong competitive advantage.

Babis, over to you.

[Charalampos Mazarakis, executive]

Thank you, Kostas. Our momentum continued in the third quarter as well. The pace of growth was slightly more moderate than in the first half of the year, reflecting lower wholesale revenues as well as the continued challenges in Romania.

[Technical Difficulty]

[Operator]

Excuse me. There is no sign coming from the management line.

[Charalampos Mazarakis, executive]

Thank you, Kostas. Our momentum continued in the third quarter. The pace of growth was slightly more moderate than in the first half of the year, reflecting lower wholesale revenues as well as the continued challenges in Romania. In Greece, revenues were roughly stable in fixed retail and growth in mobile kept pace with a strong performance over the first half. We delivered a steady 1.5% improvement in Greek EBITDA, exactly similar to the increase in the 2 prior quarters. Romania's top line deteriorated, and its profitability was squeezed as a result of provisions related to the tax settlements we announced a few weeks ago. Without which, it would have been slightly positive. All in all, group revenues rose 2% and group adjusted EBITDA after leases goes down in much, yielding a solid 39% margin.

In Greece, revenues from retail fixed services were down marginally due to pressures on legacy services. TV operations, however, continued to grow at a record positive growth while they do not yet take into account the ARPU benefit from the sports content cross-supply agreement and efforts against piracy. Certain customer retention activities that should enable us to optimize the recent content agreement and drive the future growth took place in the quarter.

In broadband, growth was entirely organic as no subsidy was available to potential FTTH, fiber-to-the-home, subscribers during the quarter. As in previous quarters, legacy voice remains under pressure. Despite the lack of incentives, we signed up 31,000 additional customers to our FTTH service in a traditionally low contribution quarter. At 355,000, the total number of FTTH subscribers is up 65% from September last year. FTTH retail customers account for 15% now of our total broadband base. Ongoing demand should continue fueling our growth in fixed service over time. As we noted in the release, penetration among our customers in areas we have already passed with FTTH now exceeds 44%.

During the quarter, we continued to add to our FTTH infrastructure, coming close to 1.5 million homes passed and expecting to exceed 1.7 million by year-end. OTE is -- still accounts for over 70% of the country's installed FTTH base. The FTTH utilization rate have reached 26% as of end September, up nearly 7 percentage points year-on-year. Following the agreement with other operators earlier in the summer, we also see increasing wholesale demand. So numbers are all moving in the right direction, and we expect this to gradually accelerate as the upcoming vouchers become available.

Our total Pay-TV customer base saw its steepest increase in a few years during the quarter, up 24,000, to 710,000 subscribers. This is clearly due to the sports-sharing deal with Nova. It should be reflected in the revenues starting as of November after the end of the lower surcharge period granted to subscribers in adoption of the new share [indiscernible].

Other fixed revenues were up another 20% this quarter with revenue from system solutions up 34%. Although impressive in their own right, these growth rates are somewhat more subdued compared to the rapid pace of the first half. This deceleration should carry on in coming quarters. The reason is, as you may remember, in 2023, many public sector projects were pushed back or frozen from Q2 to -- and Q3 towards the later part of last year or beyond due to the Greek elections as well as a series of natural disasters. As a result, Q4 2023 represents a particularly [indiscernible] comparison base. In total, over the first 9 months of 2024, other fixed revenues were up 32%.

After 2 quarters of double-digit growth, wholesale revenues now were down 5% in Q3. In majority part, the drop is due to lower international traffic. The decrease in higher-margin domestic wholesale revenues did not materially heighten compared to the performance in prior quarters, thanks to the support provided by the recent national wholesale agreement and the FTTH volume discounts.

Moving now to Greek Mobile. We had a significant growth in service revenues, up nearly 3%, extending the strong strike of the past few quarters. Considering that we replaced last year's unlimited data summer offer with a less generous package, we are very pleased with this good performance. We continue to attribute this to our market leadership in both quality of network and quality of service as well as ongoing migrations from prepaid to postpaid. We remain positive on mobile revenues despite the fact that, as you may recall, higher prepaid top-ups and the [ EB ] discounts in mobile will be anniversarized in the last quarter of the year, somewhat affecting year-on-year comparisons.

Data usage continue to increase at a rapid pace, reaching 16 gigabytes per user per month, a 13% [ decrease ] year-on-year. This once again demonstrates the popularity of our more-for-more offers and the strength and scalability of our mobile network. Our 5G+ network has already exceeded 50% operation coverage and is aiming for 60% by year-end, and we are continued to be recognized as the undisputed quality leader in the market.

Total operating expenses, excluding depreciation and amortization and one-offs in Greece, grew just over 3% in the quarter, a sharp deceleration compared to the first half of the year, reflecting the drop in wholesale and the connection costs were down as well ICT-related equipment costs. This quarter, once again, personnel expenses were down about EUR 5 million or 5% as we continue to enhance productivity. In line with forecast, energy costs were up approximately EUR 6 million in the quarter. In 2024, we moved to spot tariffs versus lower cost contracts in the previous year. This trend is going to be reversed in 2025.

As I mentioned earlier, adjusted EBITDA after leases in Greece were up 1.5% to EUR 353 million, yielding a significant EBITDA margin of 42.4%. In Romania, as you have seen following the tax audit, we have been hit with past tax charges of over EUR 33 million. While we have paid the back taxes to avoid further penalties, we are challenging in courts the findings of the Romanian tax authorities. Operationally, the performance of TKRM, our mobile arm in Romania, was once again affected by the extremely competitive nature of that market and mobile termination rate cuts. Total revenues were down 7% in Romania on a 16% decline in mobile service revenues while Romania's negative EBITDA in the quarter reflects certain provisions. Excluding these provisions, pro forma EBITDA in Romania would have been about EUR 1 million positive.

Let's now take a look in the rest of the group profit and loss. Depreciation was down EUR 16 million in the quarter, about half of which stems from TV-related content, partly as a result of the 3-year agreement relating to the broadcast rights of the Champions League. Mainly due to the reversal of provisions related to asset sales, we recorded net financial income of EUR 20 million versus a charge of EUR 6 million in the comparable quarter last year.

Moving to cash flow. Adjusted CapEx of EUR 159 million was down 13% in the quarter, largely reflecting lower TV sports content payments. Mainly due to tax CapEx items for the balance of 2024, we now expect full year CapEx in the range between EUR 600 million and EUR 610 million. On the free cash flow, our guidance of the organic performance of EUR 470 million is unchanged. Accounting for the recent extraordinary payment of EUR 33.5 million in Romania, 2024 reported free cash flow should total about EUR 435 million. Of course, excluding this outlook payment, free cash flow remains at the initial guidance of EUR 470 million. Free cash flow after leases was EUR 95 million in the quarter, up sharply compared to the Q3 last year. And finally, I'm not making market prediction by confirming our 2024 shareholder remuneration guidance of EUR 450 million, considering that the cash dividend portion has already been paid out and a little bit over 80% of our EUR 153 million share buyback program has already been implemented.

Before Kostas and I and our other colleagues take your questions, I just want to state that we are well positioned in Greece, and confident that with the additional support from FTTH subsidies, TV content agreements and other developments, we expect our solid momentum to continue and intensify in the coming quarters.

Operator, for questions.

[Operator]

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

[Maurice Patrick, analyst]

Just a couple of questions from my side, please. The first one, you make the point in your prepared remarks about the new sort of volume discount wholesale tariff and how you expect that to drive growth in the coming quarters. I noticed on your slide, you talked about the 26% penetration rates of the fiber. I was curious to understand, given you've launched it in the summer, are you already seeing an uptake from other providers because of the low wholesale? What -- maybe some order of magnitude would be very helpful there.

And also just linked to it, I noticed in the quarter that your fixed line trajectory seems to be quite sort of soft. I mean you lost 15,000 voice lines, 7,000 broadband lines. Just understanding if that's just a temporary slowdown ahead of maybe the gigabit vouchers coming or whether it's more structural?

[Kostas Nebis, executive]

Okay. Let me try to address the questions. So first of all, just a couple of clarification with regards to the KPIs we have already served out of our presentation. So we commented on the 15%, 1-5, which is the presentation of the FTTH base in the total broadband base, which is 1% that we shared with you. And the second one is 44%, which is the portion of our retail customers out of the areas where we have rolled out FTTH, which we have already converted to FTTH, just for clarification purposes.

Now going to your question with regards to wholesale discounts and the effect of it on the demand, it is clear that we see a step-up. Just to give you some rough numbers, we started with less than 10,000 net adds on the wholesale level at the beginning of the year, and we are more than 50%, 60% up this number in Q3. So this is a clear demonstration that these volume discounts are making our infrastructure more attractive to our retail providers in Greece. And needless to mention that we are talking about a quarter 3, which is traditionally one of the lighter quarters in terms of broadband demand as most of the Greek spend their time next to their summer houses.

Now with regards to the fixed revenues, you are right. The fixed service revenues have been flat throughout the year, I would say, plus or minus some decimal points, but have been flat coming out of the year, which was even more challenging. I'm referring to last year. What we have commented both myself, Kostas, but also Babis, is that we have a number of reasons to be more optimistic looking into the future. And these reasons are connected, first of all, to the subsidy coupons which were at last announced last week from the Greek government. These coupons are sizable, both in terms of the support they offer per customer, but also the total number of customers. And they address both demand, which means it go straight to the customer pocket and allow us to move customers more easily to FTTH tariffs, which are of higher ARPU, but also is going against the FTTH in building installation costs. So both of them will help us move customers stronger and in bigger numbers and with higher ARPU towards FTTH. This is one piece.

And the second piece is, of course, the TV content sharing deal, which has already been seen, translated, evident in momentum. Babis commented on the record-high quarter that we had on net adds. So we expect more of that to come. It's not only what we have already seen. We see that the government is also moving towards the direction of bringing in tighter measures against piracy. We have not yet seen the effect of this tighter measures. So all in all, coupons plus the broadband tax that the government has decided to remove out of the FTTH 100 mega bps plus prices that I shared with you before, in addition to the TV, are strong levers that are making us feel optimistic about 2025.

[Operator]

The next question is from the line of Karidis, John with Deutsche Numis.

[John Karidis, analyst]

A few numbers questions first, if I may. Firstly -- and sorry if you've answered this. I -- my line dropped in the middle of the call. So the energy cost headwind this year, am I -- is it still around EUR 30 million? So the headwind this year versus 2023. So that's question one.

Question two, you kept your free cash flow guidance of EUR 740 million (sic) [ EUR 470 million ], but that's based on EUR 10 million less CapEx guidance. Where are you sort of using up the CapEx cost saving? If you can be a little bit specific about that, please.

And then the third number question is I'm trying to understand how much Pay-TV revenue you went without because of the offer you made for those taking both yours and Nova packages during the period? And when does that period end?

And then one, sorry, fourth question, but that's not a number question. The FTTH rollout in the summer was very slow, even by -- if you compare it to the summer of 2023. What happened there? And why are you comfortable that suddenly this number is going to increase by an order of magnitude this quarter? And what should we expect for future quarters?

[Kostas Nebis, executive]

Okay. Let me take the last 2 questions. This is Kostas again. So as far as the FTTH rollout, I mean, it is normal that during summer months, construction capacity kind of becomes a bit weaker. This is something that we have seen in the past. We are running according to our plan. So we do not expect to have any surprises, and we'll have more or less where we have projected at the beginning of the year.

Now when it comes to your question about Pay-TV, what we have given away for a few months after the introduction of this partnership, so effectively giving our customers the opportunity to have access to both our sports content as well as Nova's sports content, is we offer them the possibility to upgrade to this bundled package without having to pay the EUR 3 surcharge that is going to kick in after the promotional period is over. This promotional period is expiring end of November. And then progressively starting from December, this EUR 3 will be translating into extra revenues that will become visible at the full effect in January 2025.

[Charalampos Mazarakis, executive]

Let me take the -- your number questions. So let's start with the free cash flow. You're right, we reported EUR 10 million less CapEx, and we clearly flagged that this is not, I would say, a structural decrease of the CapEx, but is a timing issue because certain TV contracts, not sports, so that were supposed to be completely paid this year, they are now moved to next year. So it's not -- it's just a shift between the 2 years. At the same time, there was also another timing issue, which is, as we alluded to the comments, that our ICT business has been exuberantly growing this year, therefore, creating higher receivables that also will be collected next year. So these 2 items more or less offset each other this year as we will also offset next year, because next year, we will pay this EUR 33 million for the [ taxes ] but also will collect the higher ICT revenue that we have been creating all these months. The number -- and of course, it's not -- the ICT project, they have a longer payment terms than our core business.

So in the energy costs, I think we have also communicated in the past that our total bill will be around EUR 20 million to EUR 25 million. We are seeing this because, at the end of the year, there's also some clearing with our providers. So far, at the end of Q3, we had -- out of that bill, was a little bit over EUR 15 million -- EUR 16 million. And therefore, the range is -- and the trajectory is to -- that would be within our initial estimates. And this increase -- for one more time, we like to make it clear. This increase versus last year, it's not consumption, but it's the different contract deals that we have been doing and the sequential of moving from a long contract that we had before to spot price this year before we move to our more favorable pricing through PPAs and other agreements for the years ahead.

[John Karidis, analyst]

Can I just double check? You said the year-on-year increase for the full year is like to be EUR 20 million to EUR 25 million, is that right?

[Charalampos Mazarakis, executive]

EUR 20 million to EUR 25 million, yes.

[John Karidis, analyst]

Okay. And then Kostas, I'm sorry about this, but you extended the numbers of homes passed this summer by 30,000. Last summer, 2023, the number was 97,000. So it was summer then. It was -- in '23 as it was in 2024. Is there really nothing going on other than people were taking extra holidays during the summer of 2024?

[Kostas Nebis, executive]

It has to do with the nature of the network that you're rolling out every year. So different networks carry different challenges and difficulties when it comes to rollout. Nothing to worry about at all.

[Operator]

The next question is from the line of Kollias, Vasilis with Pantelakis Securities.

[Vasilis Kollias, analyst]

From my side, I have 2 question. The first question is associated with the decision made by OTE's BoD about the initiation of infrastructure spinoff. Have you ever thought a potential sale of mobile towers, given that transaction in this field have been executed on multiples of 2025 in terms of EBITDA, which may lead to a rating for OTE stock?

And my second question, is the estimate gains in OTE's ARPU, specifically in 2025 from the deal with Nova, from the giga voucher commence -- which set to commence tomorrow, coupled with the discount in the wholesale prices?

[Charalampos Mazarakis, executive]

Okay. Thank you for the questions. On the infrastructure spinoff, it is what we announced. It's an effort to spin off the passive infrastructure and try to make the most efficiency out of it. No other plans for the time being.

Then for the gigabit voucher, I think what was presented throughout the call so far is that this will be all of the enablers in order to drive -- further the fixed servicing revenues for next year. But it's really the only one, no other more. So let's -- now let's wait for this to be enacted. And then, obviously, as we move on to the next quarters, we will specify more about the benefits of that one.

[Kostas Nebis, executive]

And just to build on Babis' point, because we also brought up the activities. I mean the TV penetration increased -- the legitimate Pay-TV penetration increased today at around 30%. When you compare Greece to the rest of Europe, we are lagging at least 20 to 30 percentage points in Pay-TV penetration. This gives you a possible maximum upside. So we just started the journey. We recorded one of the strongest quarters in [indiscernible]. Basically, we have some way to go in order to converge with the European leaders on this one.

[Operator]

The next question comes from the line of Soni, Ajay with JPMorgan.

[Ajay Soni, analyst]

My first one is around wholesale. Within your press release, you mentioned that you're seeing pressure from other builders. So can you just go into a bit more detail what exactly you're seeing in the market? And more specifically, on PPC, whether they've been rolling out in your regions and whether they're impacting your wholesale revenues there?

And then the second one was just around the fiber coupon that's due to come in at the end of this month. So obviously, you've seen pretty flat fixed revenue growth this year. Do you think this actually inflect that into more positive territory? Or do you expect pretty flat growth again in 2025 on the fixed side?

[Kostas Nebis, executive]

Thanks, Soni. Okay, let me start with the second one. I think that I've already addressed this one. So yes, there is an expectation that once that coupon kicks in, this will allow us to move customers in bigger numbers and in better ARPU development from a copper infrastructure to FTTH infrastructure. That's clear. Now when it comes to the other builders, yes, we see PPC overbuilding part of our networks.

Now with regards to our wholesale revenues, having set up and signed recently this wholesale agreement with the 2 retailers up to today, at least, in the markets, we have more or less secured the monetization of our infrastructure even in territories where we are overbuilt by PPC. That's the only thing that I could comment at this point in time.

[Operator]

The next question comes from Draziotis, Stamatios with Eurobank Equities.

[Stamatios Draziotis, analyst]

Well, 2 questions on my side, please. Firstly, on TV, you record quite a positive message following the recent wholesale agreement with Nova and I guess the read-through that this might have in terms of the legal markets moving onshore. I'm just wondering, do you see a risk from these initiatives having a counter effect, namely resulting in the commoditization of the Pay-TV market since, effectively, consumers will be able to access pretty much the same sports content irrespective of the provider they subscribe to?

And secondly, for Romania, I got cut off before. Maybe you already addressed this. So I'm just wondering, after several twists and turns, you seem to have changed strategy, taking to sell this in pieces. Do you think this might eventually facilitate the approval of the relevant authorities? And what is the Plan B if the latest agreement does not go through?

[Kostas Nebis, executive]

Thank you for the question, Stamatios. Let me take the first one. I mean, obviously, sports content is not the only thing that comes with COSMOTE TV. So we have a far more extensive lineup. We have also included recently an agreement deal that Deutsche Telekom has struck with Netflix. So for sure, our proposition, from a content perspective, is differentiated, which, of course, make us feel extremely confident to go ahead with this cooperation. Also, the product experience that each one of the operators are providing, coming out of different platforms, is another element which differentiate us. So we felt very, very confident with going ahead because of the fact that we have other things that differentiate and keep the customers happy with us.

When it comes to Romania, Babis, do you want to comment?

[Charalampos Mazarakis, executive]

For Romania, it's true that this time, the factor of the sale is different than previously. So it's a mixture of selling the company and selling the assets to 2 different existing players. That gives much more high credibility on the possibility to complete the transaction, and this is what we are focusing on. And you have seen in the past that we have tried to -- we have attempted to sell with different schemes. At that time, the next plan was to try to modify the selling structure in order to be successful. Now this time, we believe we are on the very right track. And depending on how it is going, we will also calibrate our next steps.

[Operator]

Ladies and gentlemen, there are no further audio questions at this time. We will now move on to questions from our webcast participants.

The first question comes from [ Andreas Demetrakis ] with NTUA, and I quote, "Firstly, congratulations, Mr. Nebis, and wish you the best for a successful term. Based on the presented data, there is limited growth for the fixed services segment. How do you plan to reverse the trend? Other than the 3-gigabyte service, do you want to roll out the 10-gigabit service? This is currently investing. And if yes, are there premium services able to drive revenue besides acting as technology demonstrators?"

[Kostas Nebis, executive]

Yes. I mean, I think I have covered most of the questions. We talked a lot about the fixed service revenue growth pools and opportunity that we see ahead. Now when it comes to the 3-gigabit service or the 10-gigabit service that will come, I mean, it is still quite early. At this point in time, the speed that we offer are the right ones based on the customer needs and the applications expectations. So yes, progressively, we'll be moving up the speed ladder. But at this point in time, customers would care more about 300 megabits or 500 megabits around 1 gigs in the consumer segment. Then of course, yes, we could see some higher speeds in more demand in B2B customers.

[Operator]

The next question is from [ Ana Oshenchugova ] with [ JS ].

And I quote, "One, please could you talk about the competition you are now seeing now in fixed and mobile? And two, what exactly drove the weaker broadband net adds this quarter, minus 7,000 versus plus 1,000 last quarter?"

[Kostas Nebis, executive]

Yes. I think I have also addressed this one. I commented on the challenges that in addition to traditionally summer months being low key months in terms of broadband momentum, broadband net adds, we also had some challenges in the copper areas, result of satellite effects -- satellite pressure and FMS pressure, which are predominant season last I commented.

[Operator]

Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to management for any closing comments. Thank you.

[Kostas Nebis, executive]

Thank you all for your attention, questions and for your interest in OTE. I'm looking forward to pursuing our dialogue and meeting some of you in the coming quarters. Building on the evident strengths of the group, I'm absolutely committed to the development and success for OTE. We will talk again for our full year results next February.

In the meantime, take care, and have a nice day.

[Operator]

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