Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Hellenic Telecommunication Organization SA (HLTOY, Financial) reported a solid quarter with increased revenues and higher EBITDA, driven by a rise in subscriber numbers.
- The company signed a sports content agreement with Nova, boosting total subscriptions and contributing to growth.
- The Greek government approved gigabit voucher schemes to subsidize high-speed connections, which are expected to boost fiber uptake and reduce costs.
- Wholesale agreements with Vodafone and Nova are accelerating the monetization of HLTOY's fiber infrastructure.
- HLTOY is focusing on digitization and efficiency improvements, aiming to enhance productivity while investing in network expansion.
Negative Points
- HLTOY faced challenges in Romania, with deteriorating topline and squeezed profitability due to tax settlement provisions.
- Fixed service revenues in Greece remained flat, with pressure on legacy services and a decline in voice lines.
- Energy costs increased significantly due to a shift from long-term contracts to spot tariffs, impacting financials.
- The rollout of fiber infrastructure was slower than expected during the summer, raising concerns about future expansion.
- HLTOY's operations in Romania continue to be affected by a highly competitive market and mobile termination caps.
Q & A Highlights
Q: Can you provide more details on the impact of the new wholesale tariff and the current penetration rate of fiber? Are you seeing uptake from other providers?
A: We have seen a significant increase in demand due to the new wholesale discounts, with net additions more than 50-60% higher in Q3 compared to the beginning of the year. This is despite Q3 traditionally being a lighter quarter. The fiber penetration rate among our retail customers in areas where we have rolled out FTTH is now 44%. We expect further growth with the upcoming gigabit vouchers and other initiatives. - Konstantinos Nebis, CEO
Q: What is the expected impact of the gigabit vouchers and the removal of the broadband tax on your fixed service revenues?
A: The gigabit vouchers and the removal of the broadband tax are expected to significantly boost our fixed service revenues. These initiatives will help move customers to higher ARPU FTTH tariffs and support the transition to legitimate TV offerings, contributing to our growth in 2025. - Konstantinos Nebis, CEO
Q: Can you explain the reasons behind the lower FTTH rollout during the summer and your expectations for future quarters?
A: The slower FTTH rollout during the summer was due to the nature of the networks being rolled out, which carry different challenges. We are on track with our plans and expect to meet our targets by year-end. The rollout is expected to accelerate with the upcoming vouchers and increased demand. - Konstantinos Nebis, CEO
Q: What is the status of the Romanian operations, and what are your plans if the current agreement does not go through?
A: We have reached a preliminary agreement with established market participants in Romania, which should ensure the future of the operations. This approach increases the credibility of completing the transaction. We are focusing on this plan and will calibrate our next steps based on its progress. - Charalampos Mazarakis, CFO
Q: How do you plan to address the limited growth in the fixed services segment, and are there plans to roll out higher-speed services?
A: We are optimistic about growth in the fixed services segment due to the gigabit vouchers and other initiatives. While we plan to progressively increase speed offerings, current speeds meet customer needs. Higher speeds may be introduced for more demanding business customers. - Konstantinos Nebis, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
