Fiber and 5G Drive Growth: Greece’s OTE Reports Solid Q3 Performance Despite Margin Pressure

Greece’s leading telecommunications provider, OTE Group, has released its financial results for the third quarter, showcasing a resilient performance driven by a surge in high-speed connectivity and mobile service demand. Despite the challenges of a shifting economic landscape, the company managed to post a 2% increase in adjusted core earnings, signaling that its heavy investments in infrastructure are beginning to pay off in terms of subscriber loyalty and service uptake.

Financial Performance and Margin Dynamics

The third-quarter report reveals that OTE’s adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) rose to 360.1 million euros ($420 million), up from 353.1 million euros during the same period last year. While the growth in absolute earnings is a positive sign, the company did see a slight compression in its profitability metrics. The EBITDA margin narrowed to 41.2%, down from the 42.4% recorded a year prior. This tightening reflects the competitive nature of the Greek market and the ongoing costs associated with maintaining a massive national network.

Mobile and Fiber Services Leading the Charge

The primary engines of this growth were the mobile and fiber-to-the-home (FTTH) segments. Service revenues for OTE’s mobile business grew by 2.7%, largely buoyed by a significant 6.4% increase in the number of postpaid subscribers. In an industry where recurring revenue is king, shifting the customer base toward long-term contracts is a strategic win for the operator.

On the fixed-line side, the push for ultra-fast internet continues to accelerate. OTE added 38,000 new FTTH customers during the third quarter alone, bringing its total fiber subscriber base to 509,000. This rapid adoption highlights a clear appetite among Greek consumers for more reliable and faster broadband, moving away from legacy copper connections.

Strategic Acquisitions and Infrastructure Expansion

OTE isn't just growing organically; it is also making major moves to dominate the digital infrastructure landscape in Greece. Just last week, the group signed binding agreements to acquire TERNA Fiber. This entity is a special-purpose vehicle that manages four of the seven lots of the Ultra-Fast Broadband (UFBB) Public-Private Partnership project.

By taking control of these UFBB zones, OTE is positioning itself to bring FTTH connectivity to approximately 480,000 additional premises, specifically targeting semi-urban and rural areas that have historically been underserved. This move solidifies OTE’s role as the primary architect of Greece's digital transformation.

Future Outlook and Shareholder Rewards

Looking ahead, OTE—which counts Deutsche Telekom as its majority shareholder—has set ambitious targets for the coming years. For 2025, the company anticipates continued adjusted EBITDA growth of around 2%. To support this, a capital expenditure budget of 600 million euros has been earmarked for the deployment of FTTH and 5G Stand-Alone (SA) networks. These technologies are crucial for the next generation of mobile services and industrial IoT applications.

Furthermore, the company expects its free cash flow to reach approximately 530 million euros. In a move that will likely please investors, OTE also declared an extraordinary dividend of 40 million euros, or roughly 0.10 euros per share. This payout follows the successful completion of the sale of its operations in Romania, allowing the company to return capital to its shareholders while remaining focused on its core domestic market.