ATHENS (Reuters) - OTE Telecom (OTEr.AT) will cut expenses drastically to ensure it meets its targets for 2020 earnings before interest, tax, depreciation and amortisation (EBITDA) and free cash flow, the CEO of Greece’s biggest telecom operator said on Tuesday.
OTE Telecom, which is 46% owned and managed by Deutsche Telecom (DTEGn.DE), Europe’s biggest, has projected free cash flow of 350 million euros this year.
“There is indeed a drop in revenues,” Michael Tsamaz told reporters via a teleconference when asked about the impact of the coronavirus pandemic.
“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, adding that those expenses will not relate to human resources.
The stay-at-home restrictions that Greece has imposed since last month to curb the spread of the COVID-19 disease has boosted the usage of data and video streaming but lea to a drop in revenues from traditional channels, like roaming.
OTE said that it would focus on digital services to make up for that loss.
OTE had planned to start upgrading its infrastructure to build a 5G network by May but the general lockdown has pushed back its planning by a few months.
“This will be now delayed by two or three months, four months. But it will begin once restrictions are lifted,” Tsamaz said.
Reporting by Angeliki Koutantou; editing by Jason Neely and Chizu Nomiyama