Hellenic Telecommuns Org

Ladies and gentlemen, thank you for standing by. I am Gaili, your chorus call operator. Welcome and thank you for joining the OTEC conference call and live webcast to present and discuss the fourth quarter 2023 financial results. All participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mr. Michael Tamas, Chairman and CEO, Mr. Babis Matarakis, Chief Financial Officer, and Mr. Evrikos Chassidis, Head of IR and M&A. Mr. Tamas, you may now proceed.

Good morning or good afternoon. I'm pleased to be here with all of you again and to welcome you to OTEZ fourth quarter and full year 2023 results call. 2023 has been an interesting and somewhat surprising year for many, but not for us. When it started, we were prepared for the impact of the reshuffling of our competitive environment, and our readiness paid off quarter after quarter. We remain convinced that our most powerful competitive advantage is the quality of the infrastructure we have built over the past decade, and more, together with the passion for customer service that runs through our organizations. We did not deviate from these principles last year as competition became more intense. We had good ground, and I believe that the whole market benefited from our discipline and determination. Quarter after quarter, revenues from our Greek retail fixed services improved. Ending on a positive fourth quarter with solid performances, it brought violent TV. Mobile service revenues delivered strong performances over the year, and even more so if you strip our visitor revenues which were impacted by tariffs and negotiations. In the meantime, ICT revenues, which had been an important driver of growth in the first half, bounced back in the fourth quarter, as we had expected, after a temporary slowdown caused by the change in public administration following the country's elections. All told, we entered a year of intensifying competition in Greece, with revenues inevitably up a little over 1%, The commendable performance as we faced increased competition in fixed and mobile. Delays in ICD projects, lower visitor roaming tariffs, regulatory refusal of inflation-based adjustments, and deferred state subsidies to fixed line upgrades. The progress we have made in all relevant KPIs highlight the success of our efforts and supports our top-line growth. Set in a positive 2024 framework, now most of these headwinds have been eliminated. Starting with broadband, we had another significant rise in the number of subscribers during the year, and nearly 9 out of 10 of our Axis customers are now broadband users. Our high-speed base has also grown sharply, as is the number of our Fiber subscribers. As you know, fiber-to-home rollout has been a key priority for us in the recent past, and we have invested significantly to build fiber-to-home access. As of the end of the year, OTEA loan accounted for over 80% of the country's active fiber-to-home infrastructure, with more than 1.3 million homes passed. And where we lay fiber, demand follows even rises. We are closing in on 20% utilization rate, up sharply from the level one year ago, despite the huge increase in our footprint over the same timeframe. Capturing a majority of Fiber customers early on will support our future performance as the return is traditionally much lower. In the TV market, another key strategic area for us, we've also been adding customers attracted by the breadth and quality of our offering. In mobile, leveraging the top quality of our high-speed data networks, we are continuing to successfully convert customers from prepaid to postpaid. We enjoy a long-lasting competitive advantage in customer experience and network performance surveys. We have also taken revenue-enhancing measures, such as raising the minimum prepaid top-up amounts and eliminated the EBIT discount. This last move supports the fixed as well as the mobile revenue base. In Greece, we achieved higher EBITDA, both in the quarter and 2023 as a whole, with a solid full-year margin level of 41.6%. While a somewhat less favorable revenue mix impacted our margins, our costs remained well under control. So we have entered 2024 in good shape. Our competitive advantages, advanced infrastructure and RPE initiatives will enable us to extend our momentum. They should absorb the headwinds wholesale revenues and energy costs might represent. We expect our Greek operations to achieve further growth in 2024. In Romania, as we told you, we are considering all options regarding the future of this operation, including a disposal. The discussions we disclosed in late November are ongoing. We will keep you apprised of any new developments as it occurs. We have also announced a change in executive leadership of OTE. As you know, after 13 years as a CEO, I have decided not to solicit another mandate. We will talk more about this next quarter, but let me just state here that I couldn't be prouder of the work we have done together during this tenure. We have transformed OTE into a modern competitive telecommunications player, the country and its economy deserves. Our financial KPIs are amongst the best amongst European telecoms. I'm confident that Kostas Nebris, who has been designated to take my place, will bring OTE to new highs. I know I will be leaving this organization in July of 2024 in very good hands. It is because we are convinced our prospects are particularly bright that we have decided to maintain our investments in the future at a high level. and to raise the remuneration of our shareholders. In 2024, CAPEX should remain at or close to its 2023 level, as we pursue a rollout of hybrid infrastructure in particular. Free cash flow will also remain solid at 470 million euros, and despite the small drop there, we are proud to be able to increase our remuneration to our shareholders. We will be asking the next AGM to approve a total shareholder remuneration of €450 million, comprising of a 23% increase in the dividend. On that note, I will ask Babis to review our performance in the fourth quarter.

Thank you, Michael. And to everyone out there, hello and welcome to our call. We had a solid fourth quarter, providing a satisfactory ending to this complex year. Total group revenues in the quarter were up more than 5%, with both Greece and Romania contributing to the growth. In Greece, revenues were up precisely 5%, though the largest increases this quarter came from lower market revenue categories. Retail service revenues were up nicely in fixed as well as in mobile. In Romania, the top line increased more than 6%, boosted by one of revenues linked to an ICT project. The nearly 3% increase in group adjusted EBITDA after leases Slower than the top line in Greece reflects the mix of revenues in the quarter. In Greece, the PTA was up by 1.6%. In Romania, it was over €4 million, as compared to break-even in the same quarter last year. Let's start with Greece. Revenues from retail fixed services continued along the improving trends they had shown since the beginning of the year. and actually turned positive in the quarter, thanks to solid increases in broadband and particularly TV. Even considering the favorable comparison pace, underlying trends improved significantly. Once again, quality and customer recognition paid off, even at a highly competitive context. Broadband revenues were up over 2% and TV was up more than 5%. We added 13,000 broadband customers in the fourth quarter, raising broadband penetration over total base to nearly 88%. We are also signed up a record 35,000 additional fiber-to-the-home subscribers during the period, bringing the total fiber-to-the-home base to 251,000. This represents an 83% increase from the year earlier level. Achieved with no support from state subsidies, which have not been available for well over a year now. We are still anticipating that some form of incentive will be offered in the coming months to further boost the market. Regardless, we are pursuing our fiber-to-the-home rollout across the country and actively marketing fiber takes up to monetize our substantial technological investments. We exceeded 1.3 million homes passed by the end of 2023 and we are shooting for another half million homes in 2024. At year-end, Fibre to the Home Penetration had passed 19.5% of homes passed, a satisfactory increase in relative and absolute terms. Our focus on network quality, service availability, and customer confidence is a winning strategy. In particular, Fibre is driving very high customer satisfaction scores, which itself translates into chain rate that are about half those of the traditional copper-based subscribers. When it comes to TV, we ended 2023 with 678,000 customers, up 13,000 in the quarter and 36,000 or more than 5% during the year, driving the revenue uplift I mentioned before. We are continuing to invest in the programming of our customers' demand particularly with regard to sports content. Last quarter, we mentioned that the blip in other fixed revenues after a steady run of quarterly increases would be temporary, and we attributed it to the upshot of the Greek elections a few months earlier. We are now pleased to report that in the last quarter of the year, other revenues bounced back as we had expected, and we are up more than 11%. We have a solid pipeline of ICT projects, for public and private entities ahead of us. Wholesale revenues were up more than 4% in the quarter, largely from international transit. On the other hand, higher-margin domestic wholesale are and should continue to be impacted by the build-up of our competitors' own infrastructure. We had a very positive quarter in Green Mobile, with sharp acceleration in service revenues, up more than 4% in the quarter, despite the drop in visitors roaming. Momentum remains intense in prepaid as well as postpaid revenues, with revenues in both channels up materially. We are encouraged by the reaction of the prepaid base to our more-for-more packages and the removal of lower-value monthly recharges. In addition, our ongoing strategy to migrate customers from prepaid to postpaid continues to pay off and really highlights the tangible benefits we are getting out of our network leadership. In Q4, through conversion and customer acquisition, we added 43,000 users to our postpaid services for a total now of over 3.1 million subscribers. The considerable appeal of our offering is visible in both our data KPIs and customer satisfaction surveys. We are also ahead of our 5G population coverage targets and we are consistent in improving the quality and reliability of our technological solutions. So, all in all, we are pleased with the development of our brick-fixed and mobile operations in 2023, and we are quite confident in delivering another resilient performance in the current year. Total operating expenses, excluding depreciation and amortization, and warm-ups in Greece were up nearly 8% in the quarter. However, most of this increase in OPEX comes from direct costs primarily interconnectional devices, with structural costs were kept under control. We recorded a temporary increase in personnel costs in the quarter, but the underlying benefits from recent retirement programs are still there, and we expect a steady decline in costs to resume in the coming quarters. The full year numbers are more representative, with operating expenses excluding depreciation, amortization, and one-offs, up just Full-year personnel expenses were down 5% and budget provisions declined 30%. Energy costs were also down sharply, but we expect that items to bounce back in 2024 based on the forward contracts we negotiated. Adjusted EBITDA after the leases increased, totaled €337 million and was up 1.6%, yielding an EBITDA margin of 39.4%. In the full year, the union margin was up 10 base points to a healthy 41.6%. Now a few words about Romania. Total revenues were around 6% at our Romanian combined operations, totaling 78 million euros. However, this includes a 5 million runoff revenue linked to the completion of an ICT project recognized in the quarter. Revenues are still impacted by MTR cuts, mobile termination rate cuts, and the highly competitive environment in which we operate. In the full year, total TKRM revenues were down about 6%. Romania's total operating expenses, excluding depreciation and localization and one-offs, were down marginally in the quarter, reflecting cost discipline across the board, despite higher energy costs. Similarly, full-year OPEX rose less than 1%. Finally, Telecom Romania Mobiles, adjusted to BDA after leases, was a little over €4 million in this quarter and €17 million in the whole year. Now we go rapidly over the rest of the group PML as it's really business as usual. Financial income and expenses are continuing to come down, reflecting the drop in our outstanding debt and higher interest income on deposits. and this objective is to continue as we are not facing any refinancing deadline for another two and a half years. As for the cash flow statement, adjusted capex was down 4% in the fourth quarter to reach 621 million euros in the full year. This is right in line with the revised guidance we gave you at the end of Q3. Pre-cash flow of the lease was 104 million euros in the fourth quarter and for the full year, It came up to €501 million, spot on with our guidance. In addition to our 2024 shareholder remuneration policy that Michael discussed, we have also communicated our cash flow at CAPEX guidance for the full year. We expect a free cash flow in the neighbourhood of €470 million, roughly €70 million lower than in 2023. This difference has nothing to do with operational performance, but it is entirely due to income tax returning to a more normative level following a one-time tax credit last year. We will also continue investing in our infrastructure, mainly the additional half million houses we intend to pass this year, as we mentioned before. As a result, we are expecting CAPEX to be at or slightly below the 2023 level, in a range between 610 and 620 million euros. So, to conclude, we're quite pleased with our performance last year and quite positive and optimistic about our outlook as we enter 2024. On that note, Michael, myself, and our other colleagues around the table are ready to respond to your questions. Operator?

Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their telephone. If you wish to remove yourself from the question queue, then you may press star and two. Please use your handset when asking your question for better quality. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question is from the line of with your bank equities. Please go ahead.

Yes, hello there, and thank you very much for taking my questions. My first one is on the remuneration policy. Could you maybe share some further thoughts as to why you're not proceeding with full distribution? We've seen your cash returns being reduced from 500 million two years ago to 425 last year and 450. in 2024, so that's about 125 million lower on a cumulative basis in the last two years. And I'm just wondering, because this has happened at a time when the debt has actually fallen by the same amount, so 130 million. So my question is basically why you think, you know, this level of prudence is the best approach towards rewarding shareholders? So that's my first question. Secondly, on the operations, you mentioned mobile, which has had quite a strong finish. Just wondering whether you think you can build further on that and you can continue growing service revenues in the low single digits, and maybe if you could comment on the notable reduction in prepaid subs that we saw. Sorry, my phone. So, yeah, because we saw a notable reduction in prepaid subs, does that have to do with this migration from prepaid to postpaid, which you talked about during your introduction? And lastly, on competitive dynamics in Greece, there have been several press reports recently referring to NOVA and its shareholder modeling a potential exit or sale. What do you think might be the read-through for the market in general from a competition perspective is the question. Thank you so much.

Okay. Regarding your first question, which is related to the reduction of the total regeneration, in the previous two years. There's no point in going back into the stories of why you reduced the dividend overall, the total remuneration in the previous years. What is important is to see what will be happening from now on. We had explained to you that one of the reasons was the fact that we had increased the investments for fiber to the home. Now, As you see this year we have changed this policy, we have improved the total remuneration and we have also improved the dividend payout by plus 23%. And we are very optimistic that things, the situation will develop in a very positive way for the coming years. Now, regarding your third point or your third question for Nova and the competitors, we cannot start commenting on speculation of what will happen to the market. But Mr. Vaziotis and to the rest, what I can tell you is look at our history. Look at the history of this company and look at the history of our management team since 2010. Since 2010, it's 14 years, 13 years, but it will be 14 this summer that I became the head of this company. We've had many, many challenges. We've had the crisis, we've had the situation of the very negative customer experiences at the beginning of the decade. We've had price wars, we've had I can go on and name the challenges we've had over the years and we have proven repeatedly that we are quite capable and competent in managing all these challenges and not just managing the challenges but also maintaining our leadership and even increase the gap compared to our competitors. And this has to do with the competencies that this team has and the fact that we are very clear with our strategy and the fact that customer is our key priority in everything we do. So whoever comes or whatever regardless of what will happen in terms of the competitive environment, we are very well equipped in the company will be very well equipped in the future to be able to face any competitive developments in the market. And I gather you know the Greek situation quite well. This year, 2023 started very, very negative in terms of what was happening in the market with a major price war by a competitor. And as you see, our results, we have managed to overcome this. And and get over it in a very positive way, having achieved these results. So, what else can I say? The third point regarding your question on the prepaid, our chief commercial, Mr. Avrilidis, can respond to you.

Yes, the numbers we see in the prepaid, as you mentioned, at least half of... The subscriber reduction is migrations from prepaid to postpaid. And this is actually more for more growth for us. It's not something negative. The rest of it is a cleanup of the base. We had, by the end of the year, it was inactive, it seems, so not contributing to the overall revenue, which is, of course, positive and positive. There is a very nice trend coming up during Q4, which we expect to follow in the upcoming quarters as well.

That's great. Thank you. Could I just follow up on the question regarding shareholder remuneration? Let me rephrase the question, and that's twofold actually. I mean, you have talked about in the past about at some point distributing surpluses that have not been distributed in past years. I'm not sure if I'm framing it the best way, but this is the rationale effectively. Is this something that is close to materializing maybe next year? And effectively, the question effectively is, you know, whether with this low leverage, it makes sense to expect at some point in the coming years, net debt to actually increase after many years of declines. Thank you.

Okay, we cannot respond to any of these two questions, whether we'll increase the net debt or whether we will distribute the surpluses. You're referring to probably a comment. I'm not sure when we stated this, but probably it was at the beginning of when we restarted distributing dividends many, many years ago. Anyway, that was more than five years ago, probably, that was said. I'm not sure how it was said. I don't doubt it, since you say. But anyway, regarding the future, I cannot respond. We cannot respond whether we will distribute supplements and so we will increase their debt. Increasing their debt, I find it less probable.

Okay, that's great. Thank you.

The next question is from the line of Patrick Morris with Barclays. Please go ahead.

Good afternoon, and thank you for the cool presentation and taking the questions. Just a few reasonably small ones from my side, please. The first question on the fiber penetration, you know, you're running at about, I think it was 19.5% penetration of the rollout. If I'm not wrong on the call, just now you talked about government subsidies, meaning that that rate should improve in the future quarters. Maybe you can give some more detail in terms of these sort of subsidies and how that could drive growth. And just linked to that, you mentioned on a previous call that you were running at around 50% penetration for some of the older cohorts. I think it was more than three years. It would be great to get an update. just in terms of what sort of that cohort of penetration is looking like, and so we can get a view in terms of where we're going for the next few years. So that's a question on the cyber side. And then if I could just be very boring and ask about cash tax. In the press release, there was talk about higher cash tax in 2024 was one of the reasons and drivers for the free cash flow for the year being lower. It'd just be great to get a sense from your side in terms of what's the magnitude of that extra headwind and maybe how should we think about cash tax reverting in 2025 would be helpful. Thank you.

Okay, I will respond to the government, the subsidies coming from the state. We're expecting, okay, the fiber to building readiness has been launched at the same time. Now we're expecting also the coupon, the gigabit voucher, which is going to be a benefit for the customer to upgrade the 5G home. Currently a consultation is being taking place between the government and the companies and we will see it being launched very soon. So we are making also some, the government is going to make some maintenance into the policy of how a building would be eligible for the coupon for the EAB readiness which this is going to make make it much easier in order to get the the building application it has to do with bureaucracy so these two the the let's say the improvement of the policy for accessing the building along with the launch of the gigabit voucher which is a benefit on the monthly access for the customers. This definitely will give a boost to the fiber to the home connections. Panagiotis, you want to respond to that?

Regarding the penetration rate? Yes, I remember we mentioned in a previous call that the initial rollout had penetration rates of up to 50%. As we speak, this has increased to close to 75%, but what is more important is that the penetration rate of the latest rollouts of one or two years is close to 35% or 40%. This is the most important part, I would say. So, yes, we have an increase in penetration steadily.

And the third question.

Okay. So regarding the tax, yes, as you mentioned, and as we mentioned actually in the present list, there is a normalization of the tax outflow in 2024 after a couple of years of benefiting from the tax breaks that we achieved. So this data, which is between 2024 and 2023, is about 60 million euros. and it mostly comes from this normalization. So that's why we said that had we had this one, this normalization impact, then the operating free cash flow would have grown, actually. And that's what we mentioned, and obviously, this will be evident in the next, again, 2025, when this effect will have been normalized.

Okay, great. So in conclusion, we should normally for 2025 assume a sort of P&L rate goes to cash flow. Thank you very much.

The next question is from the line of Memisoglos, one with Ambrosia Capital. Please go ahead.

Hello, many thanks for your time on the presentation. A couple on my side, please. Coming back to the revenues, you've had quite a swing to the positive side. In Q4, in mobile, 4%. In fixed, you moved to positive after quite a while. So net-net 5%, which are there any one-offs here that, you know, if you can give us some color, I would imagine if no one-offs, the first half at least, should we see a similar trend in 24? That's the first one. Then in the free cash flow, I'm assuming given the focus on personal costs, there is a VES. I'm guessing it's planned as well. I was wondering if it would be similar amounts to the previous couple of years. That's included in the FCF guidance. And then related to that, you've increased the share of remuneration to FCF to 95%. Is that something now we can look forward to that should stay at this level in the next few years? And final one related to FCF, obviously, CapEx. After 24, how does it trend? Does it start to come down? I'm just trying to understand the evolution of CapEx. Thank you.

Thank you for the questions. Let me take the first one about the... I think also from the presentation speech, we alluded that the growth on mobile is mostly organic, so it's coming from the activities that we are taking. In fixed, as you may recall, in Q4 of 2022, we had some provisions for the for the public projects. If these were taken into account, then it would be a little bit positive. It's one of about three to four million euros there. And the other one, which we also said in the other revenues, in the ICT, last quarter, quarter three, we're discussing in this forum that we had a slowdown in ICT revenues because of the delay of acceptance of projects. Now this came back in Q4, partially, It will also come back in June of 2024, and therefore this one also has a wonderful effect. So, all in all, the revenue generation is quite organic, and even in fixed, with this correction, still there is a sizable improvement versus the rate of the previous quarters. So, that's for the thing, and also, before we give the floor for the precast flow guidance and then the relation. The CAPEX for 2023 and 2024, as we said, they're almost equal because we intensively continue the CAPEX, roll out for fiber to the home and the rest. And also in 2025, the projection is that it would be in neighborhood of 600 million euros. Yet the exact number of course will be defined later on this year when we're preparing our plans for 2025. I'm not sure of the question. Okay. So, that's for the previous law guidance. On the remuneration, the 95% is basically what we have now and how we look at the from this point of view in this year. And obviously, this is where we'll also start from the years after. Thank you.

And the VES, it's going to be similar levels. Sorry, can you repeat because the line wasn't clear? Sure. So, for VES program, I'm guessing given the focus on personal expenses, the free cash flow guidance includes a VES program, right? Is that a similar level to previous years?

Yeah, well, there are... This efficiency program runs across the year, so it's something that will also be present this year. However, the amount and the exact figures will be decided after it's done, because every year there is... it's applicable to a lower population and it is driven also by the choice of the people because it's voluntary. So the amounts will be lower? Yeah, the amounts will be lower and it will be definitely decided in the coming quarters.

Understood. If I can just follow up on the previous question, the tax delta was 5-0, right?

5-0, yes.

5-0, okay. Thank you very much. Thank you.

The next question is from the line of with JP Morgan. Please go ahead.

Hello. Hi team. My question is regarding the fixed service revenues. So in the last couple of quarters, it has been declining, but it has now turned positive. Partially you say it is due to forms easing. So going ahead in 2024, first few quarters of 2024, how do you see it evolving? Do you see the positive trend to continue? And then my second question is regarding the government broadband vouchers. So has a similar thing been announced for 2024? If yes, what's the timeline and quantum of this?

Sorry, did you ask, for the second question, did you ask if the vouchers will continue in 2024?

Right.

Yeah, I said earlier that Yeah, the fiber to the building readiness, which is an amount of 130, 110 million euros, has been launched by the government. And it was launched a couple of months ago. What we're expecting now is a relaxation or an improvement on the application procedure in order to make it much easier for the buildings to apply for the connection. And we're expecting also, on top of this, Another approximately 80 million euros, which will be the gigabit voucher for, you know, it's a subsidy for the connection of the individual customer. So altogether, the whole amount which will be state aid or from the RF funds, whether it will be at 180 million euros. Does this answer your question?

Yeah, right. And then my first question was regarding the fixed service revenues in Greece. So it has turned positive this quarter. Do you see the trend to remain as it is for the next couple of quarters?

Okay, we're not seeing improvement even starting the year, but Panagiotis will give you more.

Yes, as we said before, last year we saw some quarters... In the row with declining revenues there, because remember we have this initiative to increase the value of what our base is getting with the free upgrades of the fiber speeds. So this effect is over. We saw that in Q4. We have a turnaround. We had these losses from mobile telephony, but we have a significant growth from broadband and from fiber to the home. So this nice growth we see together with the IPT projects. This nice growth we see in Q4. We are expecting it for the following quarters as well.

Thank you. The next question is from the line of George with Citi. Please go ahead.

Thank you for taking my questions, and good afternoon. Maybe a couple of follow-ups. The first one on the point you just made around revenue outlook. My understanding is you took certain actions, including an e-billing adjustment in the fourth quarter. So I'm curious if we've seen already most of the benefit in the fourth quarter or whether that should have a bigger effect as we're going to the start of 2024. My second question is around the personnel expenses. You mentioned some one-offs in the fourth quarter. Just curious about the size of these one-offs, just to understand what the organic performance we should anticipate in the coming quarters. And then the final question is around the coverage guidance. If you could give us a bit of an update on the programming costs that you have and any renewals and whether that is already baked into the guidance you are providing or whether that could risk it being slightly higher or lower just to get an idea of what's included in the guidance there.

Thank you. Thank you, John, for the question. So on the revenue outlook, I think We talked about as of today, what we see in Q4 partially is fueled also by the eBinning adjustment that went through in the last week of 2013 and for 24 it plays a role and actually that's why our tone of optimism for the service revenue is there because of this element. But that's not the only one. The other one is the good performance also on the customer base and the more for more programs, both in post-paid and prepaid, they work towards this direction. Personnel expenses, yes, there were some, I would say, sentiment and wrap-ups at quarter four for various programs for the bonus and some inflationary adjustments to the employees. And that one is going to, it does not alter the whole picture of the year, because it was a timely issue to happen in Q4. So, the personnel reduction we see for the whole year in 2023 versus 2022 holds water, And also, some of it is carried over to 2024, which coupled with the continuing efficiency from the digitalization and the voluntary retirement schemes, will make a further reduction visible in the coming quarters. On the capital guidance, the numbers we have mentioned are excluding the spectrum, as always. So they are the, let's say, adjusted Carpex. Spectrum is coming in 2027 mainly with renewals and a small portion in 2025 but the main part is for 2027. Did I miss anything on your questions?

On the Carpex side, I was also curious about the Champions League renewal. and the effect that that could have, whether all the programming expenses have been assumed to continue, or whether there could be some reduction in the event that you don't renew the chunk as soon.

Okay, we're expecting some reduction, but now we're in the process apparently the organizers have decided to relaunch the tender, and I think it's a week of... or the decision. So we're expecting their decision.

Okay. Very clear. Thank you.

You're welcome. The next question is from the line of Patrick Morris with Barclays. Please go ahead.

Hi, guys. Sorry just to come back for one question. Thanks again for doing the call today. Just a question on the mobile data growth and densification. I noticed in the presentation I think you talked about having, I think it was 32% growth in the mobile data traffic in Greece, so continuing to grow. Are you seeing much site densification, or are you doing much site densification in the market in terms of the need to roll out more radio sites for capacity, or actually have you got plenty of spectrum and plenty of 5G so there's no need? I'm curious as to how much capex is being spent on mobile network densification. Thank you.

I'm not sure I understand one of the words that you're using, and probably this is the key word to your question. Densification. Densification. Densification. Yeah. Exactly.

Yeah, I mean, what we see here is the result of the work of the previous years, actually. that allow us to accommodate an ever-continuing increase in the average usage in gigabytes. And I can say that in Q4 we reached the peak of all Q4s ever. We have to invest in more this year because the preparatory work has been happening throughout the year, so we don't wait for the traffic to come, we anticipate the traffic to come. And therefore, in the CAPEX there is no any needed spike in spending which is needed in order to cover the expected traffic of the next year. Note that our, because of the national roaming, sorry, because of the business roaming, we are, our network is designed to accommodate even more higher peak of traffic in the summer. So what we experience in Q4, it's less than in summer. So So, we don't foresee any CAPEX needs, particularly because of the traffic increase. It's already been designed and the notification you mentioned has been happening on a continuous basis.

Yeah. The CAPEX which is allocated on an annual basis for the maintenance and improvement of the network, it takes into consideration any increased capacity. You should not expect any surprises.

That's very helpful. Thank you for coming.

Our next question is a follow-up question with Mimiso. We have one with Ambrosia Capital. Please go ahead.

I just wanted to get your thoughts, if you could give us any color on the pay TV performance after some flat performances you've shown two very solid quarters. I was just wondering what are the drivers there. Thank you.

Okay, the TV performance, as you saw, there was improvement. We're expecting improvement. The drivers for this are the sports rights, particularly the football rights. and the overall content that we have besides sports, plus the user interface and the overall customer experience that we give to our customers. So we expect the same, the positive trends to continue. At the same time, the government is going to pass a law very soon against piracy. which is going to be another driver in helping, let's say, or in boosting the TV connections. Because, you know, piracy of paid TV business increase is probably amongst the highest in Europe. There's an estimation of approximately more than 500,000 pirate customers who use pirate boxes.

Understood. Thank you.

Ladies and gentlemen, there are no further audio questions at this time. I will now pass the floor over to management for any webcast participant written questions. Thank you.

Okay, operator, can you see on the screen here the written questions that we have? Yeah, okay. Okay, Mr. Mihalov is asking for guidance on everyday margin in Romania. Okay. That's one question. The second question is about the home infrastructure. It's growing with increasing utilization of the infrastructure. Subscribers are also growing, yet the fixed-layer revenues are not growing. We'll respond to this question. Babis, you can say a few things about Romania.

For Romania, obviously the current margin is not... It reflects actually the stabilization that has been happening the spin-off from the fixed business in the end of 2021. And this is where we start from, and hopefully with the activities we are taking, excluding of course the strategic activities, we expect this to improve in the coming quarters.

Okay, let me add something to the Romanian developments. If we, let's say, upon the sale or after, if we manage to finalize the sale of the Romanian operation, then this means that we will have, we will stop any bleeding that we have from the Greek cash flow towards the Romanian business. At the same time, following the sale, the following year of the sale, we will have a tax break of more than a hundred million. If That makes any sense to you? Next question. That is in Greek. Will you continue the program on decarcelation? Yes, we announced that we will continue this program on decarcelation. This year, we distribute 95% of the free cash flow. 67% is dividend, 33% is, if I remember the proportions correctly, 33% share buyback, and this will continue. And this will start this Monday coming. Okay? Next question is by Mrs. Dimakou, considering there is a large pool of ICT projects in Greece, are you taking any steps to increase the revenue from taking part in these projects, development of personnel or even an acquisition if needed? Acquiring an ICT company, we don't see it. As we've said, as we've described in the past, we have a very competent team. We have more than 200 people dealing with the ICT projects internally. We are quite well positioned in the ICT, in this market. We are amongst the leaders in ICT revenues and we are probably one of the most trusted partners not only for the public sector but also for the private sector for ICT projects. we are quite optimistic, you know, for the future of this. Okay, this one is, again, Mrs. DeMarco again. Relating to the first question, have you considered other revenue sources in case the over-the-ground fiber-to-home deployed, they will reduce the cost to subsequently the prices and revenues for both things? Okay, as I said earlier, regarding competition, we have had to face Over the, you know, during the last 13-14 years we have faced competitors with different actions so we had quite challenging times and then we, history has proven we have managed quite well. And we have also launched services in adjacent markets which are partially offsetting any loss in core revenue. We are well prepared for the future and the future does not intimidate us. We respect our competitors and the competitors' moves, but we are very, very well equipped in terms of resources and know-how to manage any situation. Next question by Mrs. Ozembrukova. Daphne, thank you for the presentation. Could you please quantify the energy headwind you expect in 2024 and should it reverse in 2025?

Yes, that one is about the energy. I think that just to clarify here that there is no particular headwind in 2024, which was not expected. What really happened is that the price we had in 2023, they were negotiating and the were validated in 2021 before the crisis, so they were lower. But obviously this contract expired at the end of last year, and therefore in 2024 we come back to the prices that are prevailing around the market. Now, the delta is about 30 million euros, but as we guided in the previous call, This one will be covered by the other operational savings. In 2025, which is the question of 2025, obviously any heat will be dependent on the price. Since also in 2025, we are now following more or less the terms of the market. Set aside some specific activities we are taking to or for more longer term agreements that may secure lower prices.

Thank you, Boris. Okay, next question is in Greek. I'll try to give a translation here to interpret it, okay, by Mrs. Karava. Okay, regarding the vouchers, there's a question regarding the vouchers and how much, how the vouchers will boost the connections for 2024. Okay, what we discussed when I described how the vouchers and what would be the subsidy comes from the vouchers this year. Keep in mind that most of the year, last year, most of half year, more than half year, we've not had any vouchers and we've managed to have this performance. So definitely the vouchers and building readiness and the voucher to the customer will boost connections. Now, regarding, there's another question of how we're going to respond to any price moves of our competitors. What I can say to you is that we're looking at our own, let's say, strategy and marketing tactics. And as the leaders, please don't move the panel because I need to see the questions. As the leaders in this market, we... We have our own short-term and long-term pricing strategies, and we don't... We observe what the competitors are doing, but we don't copy what the competitors are doing. Regarding the ad hoc, any ad hoc... The dividend distribution or remuneration because of the, if we march Romania, this is something that we will decide if this happens, when this happens. And regarding the fourth question for the inflationary increases that were not allowed by the government or by the regulator, we don't expect any changes on this front. Okay, what we can tell you, however, is that as we get, when we change the contracts of our customers, in the new customers, we have a provision for this. And the last question regarding the net profits, okay, we discussed about EBDA and the projections of the FICA flow. So, next Next question. No, no, you jumped. Operator? Yeah, wait. Oh, we've answered the rest? We don't have any. I think we have responded to all the written questions.

Thank you, Mr. Zamak. 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. Okay, thank you. We thank you for your attention, questions, and interest in OTE. 2024 should be another exciting year, and we are looking forward to delivering on our commitments. We're also looking forward to our next meeting and to updating you on our progress in the first month of the year. Thank you very much again, and have a nice day. Thank you.

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