Hellenic Telecommunications Organization SA

ATHEX:HTO

Earnings Call Transcript 2020-Q4

[Operator]

Ladies and gentlemen, thank you for standing by. I am Gaily, your Chorus Call operator. Welcome, and thank you for joining the OTE conference call and live webcast to present and discuss the fourth quarter 2020 financial results. [Operator Instructions] The conference is being recorded. [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 and good afternoon to all of you. I'm pleased to welcome you to our fourth quarter and full year 2020 earnings call.

As we reached the first anniversary of the health crisis, I hope your family and you remain safe and healthy. I will ask Babis to cover the performance of the fourth quarter, which, once again, demonstrated our resilience and ability to protect our profitability under tough circumstances. For my part, I would like to focus on everything our group has done in this extraordinary year to remain fit, at the same time, prepared to continue succeeding in the future.

In this regard, in the final weeks of 2020, we finalized a range of activities that have been in the making for the whole year or even longer. It will not come as a surprise that 2020 was not the year we had expected. And yet, all the steps we have taken and the investments we had made for a decade or so enabled us to emerge from this period of intense turbulence in good shape and in good order. But we would not have weathered the storm without the hard work and dedication of all OTE people. I want to start by thanking them for everything they did in 2020 to keep our customers connected and satisfied.

It is a combination of individual skills, organization and resources that make it possible for OTE to adapt smoothly to a drastic shift in demand. The flexibility of our networks accommodated radically different usage patterns as residential areas overnight saw huge hikes in fixed mobile data volumes due to streaming and work from home, while traditional offices were deserted. At the end, the biggest single factor we could not offset was the absence of tourists, particularly in the summer months with Greece a net importer of visitors, roaming represents an important source of revenues and profits for OTE which we missed in 2020. Excluding this, our resilience during the year was remarkable.

In Greece alone, our revenues in the full year were down just EUR 4 million, despite a EUR 22 million drop in visitor revenues as other sources, notably broadband and ICT made up for much of this shortfall. Adjusting for the absence of tourism, revenues and EBITDA in Greece would be up almost 1%. But in addition to dealing with constantly changing situations, we directed much of our efforts last year to moves aimed at further enhancing our systems and our agility over the medium and long term.

Despite of year's obstacles and delays due to the pandemic, our full year adjusted CapEx at EUR 544 million was not changed compared to 2019. We continued investing wisely and consistently in our infrastructure to support our clients and the economy in general. In particular, we continue to build our fiber-to-the-home network to meet the customer growing demand for high speed connectivity. On top of that, in mid-December, we participated in the multiband spectrum auction in Greece investing EUR 123 million, chiefly for 5G frequencies that will enable us -- enable our customers to benefit from superfast connectivity. Cosmote was ready ahead of the auction and immediately became the country's first operator to launch 5G commercially, opening a new era and strengthening our network superiority, a key competitive advantage. At launch, we already covered 40% of the population, and our coverage is expected to grow to approximately 50% by the end of 2021.

Another major strategic area is Pay-TV, and our sports offering is, of course, key to our dominance. The day before Christmas, we secured the broadcasting rights for all UEFA club soccer tournaments, including the Champions League and Europa League through the '23, '24 season. That represents over 420 matches each year for the next 3 seasons, an important asset for our TV contract portfolio, which we're proud of.

As we reinforce our offering, we also accelerated our transformation with 2 significant moves. In November, we announced the sale of our Romanian fixed line operations as we concentrate on the parts of our business where we expect the highest return in cash generation. We expect to close of this transaction in the second half of this year. Even more importantly, our transformation reached another level in the shape of a fundamental shift in our organization. To boost our efficiency, at the end of the year, we spun off into specialized stand-alone entities, 3 activity segments that we want to see even closer to the final customers and to their needs. Cosmote value now carries out our customer services. Germanos is responsible for our retail shop network. Cosmote technical services is in charge of our field operations. With this move, it is about 5,000 OTE employees who have been transferred to the newly created subsidiaries.

Finally, with another round completed at the year-end, voluntary exit schemes have been accepted by over 1,300 Greek employees of the group in 2020, resulting in annual savings of almost EUR 60 million. Together with the spin-offs I just discussed, the early retirement plans contribute to making OTE a leaner, faster, more technology-driven and a more people-centric organization. This is the type of organization we need right now. Though there are reasons to be optimistic and to think that our resilience will not be tested as hard this year as it was in 2020, any return to normal could only be gradual. We hope that tourism, which, as I pointed out, caused the largest revenue shortfall, will resume this summer but it might not instantly come back to 2019 levels. In the meantime, our investments of recent years and our moves of 2020 strengthen our position in the short term and ensure that we would be able to benefit from the return to better business conditions.

In order to do so, regardless of how fast the environment recovers, we will continue to invest for the future. In 2021, we expect adjusted CapEx in the neighborhood of EUR 550 million. But our cash generation will also remain significant, about EUR 580 million at the adjusted level and EUR 480 million reported. As you know, this is reported -- this reported number is the base for our shareholder remuneration which will, as a result, increase by 20% in 2021. And these numbers do not include the return to our shareholders of the net proceeds from the sale of Telekom Romania fixed. So 2021 should be a very good year for our shareholders as well, and we are proud to be able to maintain this remuneration policy in these tougher times.

On that note, I will turn the call over to Babis.

[Charalampos Mazarakis, executive]

Thank you, Michael, and hello to everyone on the call. The fourth quarter of OTE is a little hard to read, particularly at the EBITDA level as a very solid performance in Greece was obscured by a series of one-offs in our Telekom Romania mobile business.

With Romanian fixed line operation now accounted for as discontinued operations, the first stand-alone reporting of Romania mobile bears the marks of this operation. This being said, we expect this impact to be temporary, and we are pleased with the underlying performance of our operations in Romania mobile and very satisfied, of course, with Greece.

Starting with group revenues. In the fourth quarter, they totaled EUR 849 million, down 2.3% or roughly EUR 20 million compared to Q4 of last year, partly due to the high base of comparison in Romania. Adjusted EBITDA after leases totaled EUR 295 million in the quarter, a dip of 5.8% reflecting the exceptional situation in Romania, I just mentioned. The group adjusted EBITDA margin was down 130 basis points from Q4 2019 to 34.8%.

Now just a few words about 2020 as a whole as the fourth quarter is not really a representative. On a full year basis, our top line and profitability clearly demonstrated the resilience Michael was talking about before. Revenue in this unusual year were down only 1.3% to EUR 3.259 billion. And the adjusted EBITDA after leases dropped by 0.5%, resulting in a 30 basis points increase in margin to 37.5%. This was achieved despite the huge annual roaming impact of about EUR 20 million. Adjusting for roaming, EBITDA would be up nearly 2% and even more, excluding Romania one-offs.

Now let's start with Greece, where total revenues in the quarter were close to EUR 778 million, an increase of 2.9%. Total revenues in fixed were up 3.8%, while mobile was up over 1%. Focusing on Greek retail fixed services, revenues were up 0.6% this quarter. We had another excellent performance in broadband with a revenue increase of 7.5%, more than offsetting lower numbers in voice and TV.

Broadband was once again able to leverage our network, quality and investments, reliably delivering high-speed connectivity to all of our customers. We added almost 60,000 new fiber subscribers to our base, the highest quarterly increase of the year. For 2020 as a whole, our fiber subscriber base jumped by more than 27% to a total of 940,000 customers. Subscriptions with speeds above 100 mega bps or more now account for 14% of the total, double the share they represented just a year ago.

Revenues from Pay-TV declined nearly 7% in Q4. The sequential deterioration is largely due to the COVID-related shutdown of cafés and restaurants. Subscriber numbers were up nearly 4% year-on-year at 575,000 customers, the growth being entirely due to our over-the-top media service.

ICT was another bright spot this quarter as revenues rose 14%, 1-4, year-on-year, largely driven by public sector initiatives, notably the signature project. Cosmote's partnership with Microsoft in cloud services has also been a significant contributor and is now being expanded. Revenues from wholesale were up sharply, primarily in interconnection traffic at our subsidiary of OTE Globe.

Greek mobile service revenues totaled EUR 230 million, down 2.5%, a sharp improvement after 2 quarters of high single-digit decline. Part of this rebound is obviously due to the smaller contribution from tourism in the fall/winter season. However, service revenues also benefited from improving conditions in prepaid and postpaid. The bounce was particularly encouraging in postpaid, still down slightly year-on-year but much closer to 10 positive again driven by more-for-more programs. Trends in prepaid were also strong, though new lookdown measures late in the year slowed them down somewhat.

Now if we exclude business roaming, mobile service revenues were down less than 2%, coming back from declines of 6% in Q2 and 4% in Q3. So we have clearly made nice sequential improvements here. Once again, data traffic was up sharply by about 46% compared to the same quarter in 2019. The average monthly data usage per customer reached 4.5 gigabytes, 40% higher than in Q4 last year. And it even jumped to 6 gigabytes in December, reflecting special holiday offers.

The number of active users continues to rise as does smartphone penetration and reliance on the Cosmote smartphone applications. The launch of our 5G services within 24 hours only after the spectrum attribution reinforced our position as the market technology leader and should lead to further growth in data. Revenues from handsets and equipments jumped nearly 18% this quarter.

We expect the positive trends in Greek, fixed and mobile to continue in 2021 with the same drivers at work. However, there are a few factors to keep in mind. First of all, in Q1 of 2021, we'll still be facing pre-pandemic comparisons, and you'll remember that we enjoyed excellent momentum in the first months of 2020. Secondly, we are not out of the woods where COVID-19 pandemic is concerned and new restrictions have been imposed in recent weeks. And third, the competitive scene may get more crowded. This being said, we are confident that our best-in-class technology in the customer service supported by our new organization should enable us to defend our positions in the market, no matter what obstacles we do face.

Now Greek operating expenses, excluding depreciation and amortization and one-offs, amounted to EUR 463 million in Q4. That's an increase of nearly 6%, reversing the trend in the first 9 months of the year largely from interconnection and device costs as a result of higher traffic and ICT revenues, respectively. Despite the recent voluntary exit schemes, personnel expenses were down only 2%, mainly due to a special EUR 500 bonus paid to every employee at the end of this particular trying year, total cost of about EUR 6 million. As a result, adjusted EBITDA after leases in Greece was down less than 1% at EUR 300 million in the fourth quarter, and the margin at 36 -- 38.6%, dipped by 140 basis points. In the full year, EBITDA increase of EUR 1.2 billion was down just EUR 13 million, much less than the drop in visitor roaming during the year.

Turning now to Romania, where a lot of moving parts this quarter, as I noted earlier. For the first time, the fixed business is treated as activities held for disposal under IFRS 5, and we report only mobile as continued operations. In addition, the MVNO providing fixed mobile converged services as well as the handset revenues that will migrate to the new buyer of fixed are also treated as discontinued. Overall, total revenues were EUR 84 million for Romania mobile as compared to EUR 120 million in Q4 2019, with the bulk of the decrease coming from a one-off ICT revenue that have been built by mobile operations in 2019 and were not present in 2020. So Q4 is an unusual quarter as we are not really comparing apples-to-apples, like to likes. The station should get easier to read going forward.

Service revenues of EUR 56 million were down nearly 7% in this quarter, making an improvement compared to the previous 2 quarters, disproportionately impacted by the decline in visitor roaming. Lower mobile termination rates were also a factor. While the competitive landscape should remain intense, we expect that telecom Romania mobile situation will stabilize in 2021 supported by upcoming tariff movements.

The company's operating expenses, including depreciation and amortization and one-offs in Q4, decreased by more than 18%, with costs down pretty much across the board, reflecting the ongoing efforts. Personnel costs, however, were up in the quarter here, also reflecting the special EUR 500 bonus paid to all employees and other seasonal adjustments.

Telekom Romania Mobile's Q4 adjusted EBITDA after leases was negative by almost EUR 5 million due to one-off adjustments triggered by the separation of the fixed and mobile activities prior to the disposal. We are confident that the profitability will resume in 2021. Excluding one-offs, EBITDA would have been positive by about EUR 6 million in the quarter, reaching out EUR 30 million annually. This is consistent with our roughly EUR 40 million EBITDA target once the asset has been restructured and refocused on the new mobile only operation. Cash flow generation for its part improved certainly.

Now let's go down to the rest of the P&L from the group adjusted EBITDA after leases of EUR 295 million I mentioned in my introduction. Group operating expenses, excluding depreciation and amortization and one-offs, was nearly EUR 534 million, virtually unchanged from the same quarter in 2019. Group personnel expenses of EUR 117 million were down over 1% in the quarter. In the full year, they are down 2.5%. Most major fixed cost items posted a decrease in the quarter and full year.

Group depreciation and amortization totaled EUR 185 million, down sharply from Q4 2019, which included an impairment charge in mobile Romanian operations. Interest expense of less than EUR 10 million was cut in half compared to the 2019 level, reflecting both lower indebtedness and lower cost of debt. In the full year, interest expense was down an impressive 39%. Income taxes of EUR 33 million in the quarter also returned to normative levels compared to Q4 2019, which included exceptional corporate tax deductions.

Looking at our cash flow statement. Adjusted CapEx was EUR 162 million in the quarter, up 13% compared to Q4 last year. In the full year, CapEx of EUR 544 million is roughly in line with last year. In addition, we had spectrum CapEx of EUR 123 million in the quarter, mostly related with the 5G auction. Adjusted free cash flow after lease, was EUR 255 million in the quarter and EUR 656 million in the full year, up more than 38%. Reported free cash flow exceeded EUR 412 million in the full year, above our EUR 350 million full year target, supporting our 2020 shareholder remuneration commitments.

Before we go to your questions, a few remarks on outlook and guidance. First of all, we are cautiously optimistic that the sanitary conditions will slow but surely return into normality. Clearly, for us and for the Greek economy in general, the pace of this normalization is a question mark, notably as it impacts the tourist season in December as you have seen that visitor roaming was the key swing factor in 2020. Aside from this, we expect trends to remain moderately favorable throughout the year.

While we continue spending and investing to meet our customers' needs and strengthen our competitive positions, we remain extremely vigilant when it comes to costs. Our agility and adaptability have been enhanced by our organization and our cost base benefit from our recent voluntary retirement plans. So we have started the year in excellent state, and this is why we are confident in meeting the cash flow generation and shareholder remuneration target that Michael outlined before.

Now this concludes my remarks. Michael and myself and our other colleagues around the table are now ready to take your questions. Operator?

[Operator]

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

[Stamatios Draziotis, analyst]

My first one has to do with free cash flow. We saw a strong finish to the year, which seems to have been partially driven by working capital. Just wondering, to what extent does this working capital swing explain the bit relative to your guidance this time last year? And similarly, on that basis, to what extent should we assume the unwind in 2021?

Second question has to do with Romania. You referred to one-off adjustments related to the continuation of the business as a stand-alone operation, which has dragged down EBITDA. Could you just tell us whether this charge was accounting only or also had a cash element, please?

And lastly, on Greek mobile, could you tell us -- you mentioned briefly about the prospects of the group in general. But how do you expect the particular segment, which is more cyclical, if I can say, to perform this year? Obviously, comps are easier as we go through the year, given the cycling of the roaming drag. You said we saw sequential improvement in service revenues in the last quarter. On the other hand, there ought to be continuing pressure on the prepaid side or floating of data to WiFi due to remote working and the lockdown. So I would appreciate your thoughts here.

[Charalampos Mazarakis, executive]

Thank you for the questions. Let me tackle the first one on the free cash flow. Yes, working capital usually in all Q4 is strong, and this comes from a series of factors, specifically from -- usually this quarter, we get -- we collect the invoice, the payments for the big ICT programs that are developed over the year. And since, as we all know, the Greek state is a big customer in this one since we deliver quite a few of ICT programs that are usually be paid at the end of the year. So it's not only this year that has strong free cash flow, but maybe there's a little bit more this year because of the ICT. And this, of course, is going to flow over, and they'd be normalized in the coming periods.

Regarding Romania, if I got your question right, yes, we have booked some one-off provisions that will help us to migrate towards the stand-alone operations of Romania mobile. These are mostly provisions with no cash element on it, at least for the time being. Some of these expenses are going to be materialized in the coming periods, where there will, of course, be offset versus the provision and will have the cash element. So the cash element is going to be spread out in the coming periods.

Regarding the service revenue in general, I can make a comment and then our Head of B2C can comment, is that this is something that -- I mean distinguished between the 2, the pandemic effect and the trajectory of our business, I think it was clear from the presentation that the elements that we are feeding the positive momentum with the sequential improvement are still there and will be there, and I'm talking about the investments that we have been doing in the infrastructure, call it, fiber to the customer. And also the 5G and 4G plus allow us to be closer to the customer and offer a much better customer experience than in the past by either connecting the customer to the high-speed Internet, the fiber Internet or the mobile to offer what we call more-for-more which is more 3 gigabytes for a small top-up on the access fee. And also, the continuous preference of the customers to join our network because of the better service that we provide.

So these elements are there. And of course, obviously, the pandemic, what it does is it puts some obstacles when the pandemic is picking, call it, on the prepaid users or on the pressure on the small businesses. But overall, the belief is that we are persistent, and we are keep investing all the drivers. And that's why we are confident that when the pandemic will subside, the drivers will be there, which will drive the sustainability of the service revenues.

And closing to say that this is not a straight line here. It's a bumpy road since -- as we are experiencing in this month. For example, in February, we have the lockdown, which takes a little bit up and down. But we have to be focused on the midterm, and this is what we are doing in order to have the fundamentals that will drive the revenue sustainability.

[Stamatios Draziotis, analyst]

Could I just follow-up quickly on Greek mobile? I'm just wondering, we recently saw one of your competitors introducing unlimited pricing based on speed rather than gigabyte, so like a finished style pricing, if I can say. Do you foresee a significant migration to such plans in the next couple of years as 5G rollout accelerates customers' focus on speed?

[Michael Tsamaz, executive]

As we speak, there is still a lot of demand for mobile data. So Cosmote strategy is that we have our network with unlimited speeds for our customers, both prepaid and postpaid. If the market moves to totally unlimited data packages in the future or in the near future, this is something -- I mean speed differentiation is something that we will surely consider in order to continue to monetize this data demand.

[Operator]

The next question is from the line of Kim Ivan with Xtellus Capital.

[Ivan Kim, analyst]

Two questions, please. Firstly, can you please update us on the key competitive advantage, which allows you to consistently connect pretty much all of the broadband subscribers in Greece. Or maybe what your competitors fail to do?

And then the second question is just a follow up on, I think what you said just before during the presentation on the additional shareholder distribution upon Romania sale fixed business in Romania sale proceeds. How much do you expect from that? Because I think you said before that it would be roughly free cash flow neutral for you.

[Charalampos Mazarakis, executive]

Let me start from the second one, which is the distribution of the proceeds from the sale at the stand of fixed. This is not coming from the cash flow of the company, but it comes from the price that we have negotiated with the buyer. And obviously, that will be casting when the transaction is closed, which we expect to happen in the second half of the year. And thereafter, the price will be distributed to the shareholders, by using the same manner of distribution that we are keeping for the main dividends.

[Ivan Kim, analyst]

So may I follow up on this before you go into the second question. But I think you said before that the proceeds will be invested into the mobile network into billing in mobile network like migration of billing.

[Charalampos Mazarakis, executive]

No, no. So the full

[Ivan Kim, analyst]

No, okay. Okay.

[Charalampos Mazarakis, executive]

Yes. These are 2 different things. I mean, the proceeds of -- from the fixed will be distributed to the shareholders. Obviously, the mobile business we will be continuing to operate in. As I said, a long company protecting its own cash flow, which we expect to be on the positive territory.

So for the first question about the broadband subscribers in Greece, I mean the overall idea here is that it's not something that started this year. It's been a journey investing in the fiber to the customer infrastructure, well, 3 or 4 years. We started in 2016, '17 with extending fiber to the customer, and now we are covering with either veteran technology or fiber to the home, close to almost 2/3 of the population. This is a combination of the 2 technologies. That gives -- obviously, this is an upgrade of the service we were offering versus the previous ADSL, let's say, world.

But also what comes with up to and is also the customer service that we offer to them, which is really one of the differentiating factors, which is also appreciated by the customers, meaning the after-sale service, the consistency of the service and also, whatever the case is the rapid fixing of the defaults of any fault that may happen. So this is what drives the growth of the broadband and the increase you have seen in the numbers, which is converting the existing B2B and B2C customers from the old technologies to fiber to the customer. So that's the -- what we are offering, and this is what we -- the customers are -- our customers are appreciating if that was the question that you had.

[Operator]

The next question is from the line of Degtyarev Slava with Goldman Sachs.

[Vyacheslav Degtyarev, analyst]

A couple of high-level questions on my side. Firstly, do you feel that the group structure is optimal following the deconsolidation of fixed line business in Romania? Or do you see scope for M&A opportunities over the next 3 to 5 years, including on the passive infrastructure side?

And secondly would be, can you highlight some competitive dynamics in the fixed and the mobile side in Greece recently?

[Charalampos Mazarakis, executive]

Thank you for the questions. On the first part, I must say that the M&As are not preannounced. So we are in the mode that -- obviously, we always evaluate the assets and we do very cautious steps. But right now, we are focused on completing the transaction on the fixed business in Romania. And obviously, if we have other interesting news to share, I mean that will come at that time.

Competitive dynamics in mobile and fixed in Greece, maybe Panayiotis, can you say a few words on our B2C?

[Panayiotis Gabrielides, executive]

I don't know what the question was about. I don't know if you refer to the fourth player, Nova, but there is not much change in what we've seen in the last couple of years. Both our main competitors, Vodafone and WIND, are using their own strategies for fixed and mobile. Nova seems that is reviving in the content business. We do not see much change, a lot of change of what we've seen in the previous years. Nothing much different from what we have discussed before.

[Michael Tsamaz, executive]

But allow me to add. We don't really okay with respect to competitors. But at the same time, we look at our own house. We continue improving our network, whether it's fixed or mobile. We have a clear advantage there, and the competitors will need huge amounts of money in order to come close to us in terms of quality and speeds and customer service. Customer service is much, much better compared to our competitors, plus our marketing activities, our brand perception, the brand preference. So in all aspects to connect points with customers, we have a clear advantage. And that is not by accident. It has been for many years, same high levels and with the differences.

The reason for this is that we constantly improve. We try to improve and invest behind it, the quality of the network and the customer interfacing, the products, the services. And that's why it's no wonder that we can say that we are the loved brand. And this is clearly shown by the trim results that we get every quarter and by the brand preference numbers, but also by the net promoting scores that we get.

[Operator]

The next question is from the line of Ierodiaconou George with Citigroup Global Markets.

[Georgios Ierodiaconou, analyst]

I have 3. The first one is on mobile service revenue and the 1% decline we've seen underlying in the fourth quarter. I know there's been a bit of an impact from the lockdown during the period, but I was wondering if you can give us an idea of how that will compare to what you would expect at during 2021, and specifically in Q1 with the lockdown you have now, whether we should expect more headwinds ahead, at least in the early parts of next -- of this year.

My second question is on fixed, and we are seeing very strong KPIs in retail. And obviously, still positive growth and not a lot of telcos are growing retail revenues, but perhaps 0.6 despite the improvement, it's not as good growth as the KPIs would imply. So I was wondering if there is anything specific that's driving these headwind studies macro-driven and therefore, could improve if things normalize or whether there's a structural reason for that.

And then the last question is on dividends. And if I'm not mistaken, the last couple of years, we wanted to exceed your free cash flow expectations. So I was just wondering whether at some point you may revisit and maybe make some adjustments for the spare dividend capacity over the last couple of years.

[Charalampos Mazarakis, executive]

Thank you for the questions. Let me start with the third one, the dividends, and the answer is yes. I mean the surplus of the dividend policy is also to distribute the generative free cash flow and also to have a kind of normal increase over the years in order not to create ups and downs. But certainly, whatever is the surplus in any year is going to be considered to -- for distribution in the coming years.

On the mobile part, if I got the question rightly, it's -- this 1% down also includes a couple of things. One is that other than the business roaming, which is excluding from this 1%, also our own roamers, which is in there, were impacted by the lockdown and travel as they did in previous quarters. So that takes at all there. There's also an effect from the mobile termination rate, which continues to -- talking about why it doesn't have any impact on the EBITDA or the impact in EBITDA is not material. However, in the revenues, it weighs. And we are in a couple of more quarters with -- and then we find the anniversary of the most recent MPR cut. And obviously, there is a small effect from the lockdown in Q4 '20, which existing in Q4 '19. Although I can say that the effect on the mobile revenues in the second lockdown, let's call it that way, at the end of the year was not as severe as it goes in the first lockdown. Or noting also the adjustment that our -- and the -- I would say the amendment of the usage that our customers have been doing by adjusting themselves in this situation.

Going forward, the elements that are feeding the mobile service revenues, if we exclude, of course, the MPRs is, obviously, with the return of the more normality, also our own roamers will start traveling again, so they will feed the service revenues. And the ability to move customers from prepaid to postpaid, this flow, which is very important and part of the mobile network monetization, will be more pronounced. And certainly, the data appetite of the customer base with the continuous increase in usage facilitates the more for more strategy, which is offering a small top-up in the monthly access fee with a higher bucket of free data as Panayiotis described before.

So for the mobile, the grades are there. On the retail fixed, yes, the broadband customers are growing, and they are feeding the increase. However, in this quarter, we also had a couple of effects from the, let's call it, which is created by the crisis. And this is at the -- this fixed retail service revenues also include the TV revenues. And we must observe that most of our, let's call them, small business customers, cafés and restaurants, which are an integral part of the TV offering, have been shut down. And some of them, they are connecting some of them, they are asking for the good customers. We are giving some discounts and support them staying alive, to put that way, at least in this part.

So going forward, again, here, the ingredients are in good track, and we need to make sure that the continuous rollout of the fiber to the home infrastructure will be there to connotate the continuation of the service and then and the suite of -- the move of customers from the old technologies to the new technologies.

[Georgios Ierodiaconou, analyst]

Very clear. If I could ask one clarification, the question around the dividend you mentioned you will revisit. Is there a specific time frame you are thinking about? Or is it driven by other events?

[Charalampos Mazarakis, executive]

Right. It's the timing effect. Again, the fact that the increase in the dividend eurocents per share has to have a nice trajectory, and we don't want to have big movements there. So I would expect that in the next couple of years, this will be equalized or will be smoothen out.

[Operator]

The next question is from the line of Papalora Alexandros with NBG Securities.

[Papalora Alexandros, analyst]

I have 2 questions. The first one is on Romania. Are you considering any further disposals of Telekom Romania mobile if any opportunity comes up?

And the second question is on your buyback program. I know the current one ends in 2022. Should we be thinking about an extension as the last one was extended? Well, a new one was introduced for 2 years. Should we be thinking about another buyback program for -- after 2022?

[Charalampos Mazarakis, executive]

In Romania, the focus right now is to, as we said, to close the deal on the fixed. Mobile stays, and we are focusing on constituting mobile with a new brand-new model, i.e., lean and efficient, and therefore, you saw that we also took the correct provisions in order to start transforming the business. So for the time being, we sell -- the future, we keep the mobile.

On the second question, on the buyback, yes, the program that was voted last year, it was completed, and we announced the results. Now we are going to commence the next one. If you recall that in the previous -- last year, we took a decision to renew the program for 2 years. So we run the first year. And pretty shortly, we will start the activity of the second year. So you should expect to see this happen in the time in a -- starting in the time in a few days.

[Operator]

[Operator Instructions] 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.

[Michael Tsamaz, executive]

Thank you all for your attention, questions and interest in OTE. We started the year with a strong organization, renewed confidence and improving outlook. Our next appointment is in May, where we will be able to discuss our progress. In the meantime, we wish you a nice day and stay healthy and safe.

[Operator]

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