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OTE embarks on economy drive, delays 5G, but no job cuts

Michael Tsamaz, CEO of OTE Group, which operates under the Cosmote brand in Greece and as Telekom Romania, said the top line was hurting because of the coronavirus outbreak.

Speaking to reporters on a teleconference call, and as reported by Reuters, Tsamaz indicated that expenses would need to be cut drastically to preserve this year's free cash-flow (FCF) target of €350 million (US$380 million).

OTE previously had a shareholder return target of €400 million (US$435.5 million) for this year. The Reuters report didn't mention if that was still in place, but without maintaining FCF the chances of dividend cuts or a reduced-share buyback program inevitably increase.

"We will cut expenditure and activities which don't have a direct impact on our revenues ... to make sure that the EBITDA target will be achieved," he said.

[Ed. note: Light Reading is not sure if Tsamaz was using "EBITDA" and "FCF" interchangeably, but there's no mention of an EBITDA target in OTE Group's outlook section in fiscal 2019 results.]

One casualty is a delay in 5G upgrades, originally slated for May in collaboration with Ericsson. This will be pushed back, said the CEO, by maybe as much as four months. Tsamaz appeared to rule out job cuts, adding that savings in expenses would not come from human resources.

To try to offset falls in roaming revenue – the grim telco side-effect of lockdown measures – Tsamaz seemed keen on developing digital services. Details, however, were scant.

— Ken Wieland, contributing editor, special to Light Reading

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