ECONOMY

OTE sales slip on tough competition

OTE telecom posted a 5.4 percent drop in first-quarter sales yesterday as strong price competition and a sluggish economy at home and in the Balkans weighed on revenues. Group revenues declined to 1.454 billion euros from 1.53 billion euros in the same period a year earlier. The group, partly owned by Deutsche Telekom (DT), increased profits by 89 percent year-on-year, mainly helped by a 200-million-euro one-off provision reversal. Net profits at OTE grew to 267 million euros but came in below market expectations. OTE has been counting on mobile phone and Internet revenue growth in Greece and Southeast Europe to offset shrinking income from its fixed-line business, which is declining. «In January, our mobile operations in Greece faced intense pricing competition,» Chief Executive Panagis Vourloumis said in a statement. «[Mobile arm] Cosmote’s vigorous response enabled it to retain its market share and strengthen its leadership but this impacted on the growth of our profitability in mobile,» he said. Analysts believe efforts to contain costs and its cooperation with DT will help the company partly offset the impact on profitability from tougher competition and a tough macroeconomic environment. «OTE said that total synergies with DT should reach 200 million euros per annum with some 133 million euros being realized by full year 2010,» said Proton Securities in a note to investors.