OTE's AI-First Pivot: From Passive Infrastructure to Active Competitor
Record fiber growth and AI commercialization set the stage as OTE braces for new competition.
HTO.AT · Earnings Call · 2026-07-29
OTE's AI-First Pivot: From Passive Infrastructure to Active Competitor
Resilient Results, Changing Strategy
OTE delivered another solid quarter: adjusted revenues up 8% year-on-year, EBITDA growth of 3%, and a margin above 40%. But beneath the numbers lies a strategic inflection. CEO Kostas Nebis framed it as “Data and AI are becoming an increasingly important part of our agenda and a key enabler of our internal transformation, driving greater efficiency.” — Kostas Nebis, Management / Executive · 2026-07-29 The company is not just using AI internally—it is commercializing it.Monetizing AI: From Cost-Saving Tool to Revenue Driver
Earlier this year, management described AI as an internal efficiency lever, citing “our operating/production model transformation using technology, digital technologies, including AI, will help us also deliver an incremental boost to our EBITDA by rationalizing our costs.” — Kostas Nebis, CEO · 2026-02-26 But this quarter, the narrative shifts decisively outward. OTE now offers GPU-as-a-Service and has implemented the first AI agents for procurement, finance, and HR processes for B2B customers. The ambition is to evolve into “a digital first and over time, an AI-native company.” That represents a fundamental repositioning—the telecom is entering the cloud and AI transformation journey market as a service provider. This aligns with a global surge in AI infrastructure spending. The company is also embedding AI into its network, with trials of AI calling expected soon. The strategy leverages its existing assets: a leading fiber network and a vast customer base. It also taps into the same demand that is driving hyperscale data-center growth globally.Defending the Turf: FWA, FTTH, and the PPC-Vodafone JV
The competitive landscape is heating up. The potential JV between PPC and Vodafone could reshape Greece's fixed market. OTE acknowledges the risk but points to record wholesale net additions. “even if we have not yet seen any slowdown in the pace of Vodafone migrating their customers to our FTTH infrastructure, to the contrary, we have had another record high net adds in our wholesale base.” — Kostas Nebis, Management / Executive · 2026-07-29 The defensive arsenal includes a rapidly expanding FTTH footprint—687,000 customers, 42% utilization—and wireless access (FWA), which crossed 100,000 subscribers, effectively countering Starlink. This is a bridge technology, as management has consistently argued. The company is also preparing for a potential spectrum auction, which adds another layer of strategic complexity. Earlier, the CEO had dismissed PPC's entry as manageable: “So we feel confident that any challenges will be properly addressed.” — Kostas Nebis, Chief Executive Officer · 2025-02-26 Now, with the JV on the table, that confidence is being tested, but the company's record wholesale adds suggest it has room to maneuver.Financial Discipline and Growth Outlook
Despite headwinds from the forced international wholesale wind-down and RRF project normalization, OTE reiterated its 3% EBITDA growth guidance. Cost efficiencies continue to drive margin improvement, with indirect costs down to 28% of service revenues from 31% a year ago. Free cash flow guidance of EUR 570–580 million remains intact, providing ample firepower for shareholder returns and spectrum investments. The transition from Cosmote to Telekom is more than a logo change—it signals a unified, digitally-led brand for an AI-ready Greece. As Kostas Nebis noted, “By leveraging the strength of the world's #1 telco brand, we are strengthening our market presence and further differentiating ourselves versus the competition.” — Kostas Nebis, Management / Executive · 2026-07-29OTE is no longer just a utility—it is becoming a digital service platform. The combination of AI monetization, fiber leadership, and a clear-eyed competitive response positions it well for the next phase of growth.We are doubling down on the software development life cycle, our network management, our customer service introducing conversational agents, the productivity of our front liners with a number of AI agents while progressively shifting our internal processes towards AI augmented solutions, with the ambition to evolve into a digital first and over time, an AI-native company.