OTE Won the Satellite War and Is Now Losing the Price War

OTE's third quarter, reported Friday, looks like a sleepy incumbent quarter: adjusted EBITDA after leases up 3.1% with the margin widening 90 basis points to 42.1%, revenue up 5% on an adjusted basis, free cash flow after leases up 27.7% to EUR 137.4 million. Look one layer down and the quarter is really about two fights — one the company is winning, one it is quietly starting to lose.

The defense that worked

Three years ago Starlink landed in Greece and took customers off OTE's worst copper. Management has never hidden this. On Friday, CEO Kostas Nebis told the story with unusual candour about how the counterattack went:

So far, Starlink has been growing quite strongly in the Greek market. This has progressively slowed down starting 2026. And we saw that Starlink more or less run on the same levels as last year in the last couple of months, which is the result of us having managed to grow our fixed wireless access base by more than 100,000 customers in less than 1.5 years' time.

The numbers back him: fixed wireless access net additions of 15,000 in the quarter took the base to 134,000, more than double the 62,000 of a year ago. This is a genuinely company-unique win, and it reads in the keyword set — satellite and "defending" were among the sharpest movers in OTE's own keyword momentum this quarter, and homes passed and "copper to fiber" climbed alongside them. FWA is explicitly a bridge: the CEO called it "a temporary solution until we manage to get with fiber there."

Worth noting the sector backdrop. On the market tape, wireless service revenue is down roughly 14% over 360 days across the listed telco comparables — this is a de-rated industry. OTE grew mobile service revenue 2% with postpaid net adds of 49,000 and its base up 7.5% year-on-year. Relative strength, not absolute euphoria.

The war that is costing it

Then there is PPC, the Greek utility that has decided telecom is its next adjacency. The escalation ladder across OTE's own calls is the story. In August 2025 the line was that PPC covered "less than 10% of the broadband market" “they're covering less than 10% of the broadband market” — Konstantinos Nebis, Management · 2025-08-07. By February 2026: “we have not yet felt any material pressure or effect on our numbers” — Kostas Nebis, CEO · 2026-02-26. By July 2026: “for sure, we see some pressure. But I would not flag it with a material effect on our numbers so far.” — Kostas Nebis, Management / Executive · 2026-07-29

Friday's framing is different in kind — not magnitude, but character:

PPC brought up a lot of extra competitiveness into the market. It's not only the numbers that they generate. It is the fact that they are creating a far more competitive environment. It's not only PPC acting, it's also the market reacting. So this overall has heated up, I would say, the competitiveness in the market.

That is an admission that the whole Greek fixed market has repriced, not just one entrant. And the price of defending the base is now explicit. Under prodding from JPMorgan's Ajay Soni on why traditional fixed lines are shrinking 2.5%–3%, Nebis conceded: “True, which is result of pricing.” — Kostas Nebis, Chief Executive Officer · 2026-10-30 The competitive intensity keyword jumped to a prominent position in OTE's Q3 keyword set for the first time at this level of emphasis. Keeping broadband share broadly stable at 50% is a real achievement — FTTH customers are now 739,000, or 31% of the broadband base versus 21% a year ago, with 3.0 million homes passed — but it is being paid for in ARPU, offset only partially by copper-to-fiber upgrades and in-home Wi-Fi rentals.

What stopped being said

The most interesting silence: the PPC–Vodafone fiber joint venture, which dominated the July call — a potential 50/50 merger of their fiber companies that management flagged as carrying incremental wholesale revenue risk of roughly EUR 50 million — vanished entirely from the Q3 narrative. The PPC Vodafone theme that spiked in the second quarter is simply gone, replaced by generic "market reacting" language. Either the deal has de-risked or management prefers not to litigate it; either way, readers should treat the omission as a signal, not an absence.

Two other structural shifts also went quiet. First, the planned phase-out of roughly EUR 160 million of near-zero-margin international transit revenue completes this year, plus a further ~EUR 15 million domestic wholesale decline — a revenue hole with minimal profit consequence, but one that distorts the reported top line and makes the "adjusted" 5% growth the only number that matters. Second, spectrum remains in limbo: the consultation closed, but Greece's regulator has had no chair since August, and no timing or structure for the auction has been set. That leaves open the question of whether PPC bids for mobile — and leaves a multi-hundred-million-euro capital call hanging over the 2027 shareholder remuneration decision.

The engine that has to replace it

With the Recovery and Resilience Facility cycle complete, OTE still guides System Solutions to double-digit growth for the full year, and management claims it can hold both top line and margin into 2027 by pivoting to the private sector, cloud, security and AI, plus European institutions — “run more or less along the same levels of this year moving into 2027, both in terms of top line, but also in terms of margin.” — Kostas Nebis, Chief Executive Officer · 2026-10-30 Note the data communication line, up on SD-WAN demand, is now the visible growth leg inside fixed.

Pay TV is the cleaner story: past 800,000 subscribers (+6%), revenue +9%, with legitimate penetration around 35% against 50%–60% in the rest of Europe. The UEFA Champions League rights tender and the Nova wholesale sports agreement — running for one more year — are live catalysts management would not price. And the group has now formally rebranded to Telekom, closing a thread analysts had questioned since 2025.

Cash is where the confidence sits. “this implies an extraordinary strong free cash flow generation in the last quarter of the year” — Charalampos Mazarakis, Chief Financial Officer · 2026-10-30 — the CFO's words, with full-year reported free cash flow guided to ~EUR 750 million and underlying to EUR 570–580 million, against CapEx of just over EUR 600 million. There is also a loaded, unfired pricing lever: contract terms were amended in July to align CPI-linked increases with the market, with a cap around EUR 2.80, effective for February 2027. Asked whether they would pull it, Nebis demurred: “what we are going to do, we'll see.” — Kostas Nebis, Chief Executive Officer · 2026-10-30

The tension

OTE is doing the hard part — defending a legacy base against both a satellite disruptor and an aggressive utility entrant — and doing it well enough to accelerate EBITDA. But the defence is now visibly funded out of price, the market's competitive reset is no longer attributable to one rival, and the growth that must replace the RRF cliff and the EUR 160 million transit roll-off sits in a Systems Solutions business management itself has described as hard for outsiders to model. A 3% EBITDA grower with a fortress cash engine and a stalled share price story is not a broken company. It is a company whose next twelve months hinge on how expensive the peace gets.