Cosmote helps OTE profits

Greece’s largest telecom group OTE, soon to be 20 percent-owned by Deutsche Telekom, grew profit by 15 percent last year, with mobile and Internet operations providing the bulk of earnings. OTE increased its stake in its Cosmote mobile phone unit to 99 percent and focused on the Internet to offset a continuing fall in income from fixed-line telephony as Greece deregulates its telecom market. The strategy may pay off – revenue from mobiles and fast Internet ADSL take-up was significantly higher than income from OTE’s fixed-line operations. «The full integration of Cosmote… puts us in a much better position to benefit from the growing convergence between fixed, mobile and broadband,» said OTE President and CEO Panagis Vourloumis in a statement. «The nature of our competition is changing and intensifying throughout our markets.» The total number of ADSL subscribers in the country doubled to about 1.1 million customers, OTE said. OTE said net 2007 profit rose to -662.6 million compared with -575 million a year earlier, with sales up 7.3 percent to -6.32 billion. Cosmote’s contribution to the top line was about -3.06 billion for the year. «Without Cosmote’s strong 2007 performance the results would have been worse,» said an Athens-based analyst who declined to be named. «The increase in mobile users is one key to future growth, which is also why Deutsche is interested in OTE.» On Monday, Deutsche Telekom said it had agreed to buy a 20 percent stake in the Greek group with a view to increasing its holding as part of growth plans based on the acquisition of mobile phone companies. Deutsche Telekom is also seeking to buy part of the government’s 28 percent stake. Greek media have said Deutsche wants to lift its stake to about 30 percent. OTE expects Cosmote, which will be delisted soon, to maintain its position as Greece’s market leader and sees the unit’s revenue for 2008 up by about 15 percent, helping offset a drop of about 4 to 5 percent in fixed-line revenue, it said. (Reuters)

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