OTE is establishing its leading position in the telecommunications market for the coming decades by expanding its investment program in the development of the Fiber To The Home (FTTH) network, which in the coming years will almost completely replace the copper network. which is the most important assets of the group.
As announced yesterday, OTE undertakes to bring fiber optic (FTTH) to 3 million homes and businesses, increasing its investment plan to over 3 billion euros by 2027. Only the group’s investments will cover almost 2 / 3 of the lines of Greece with optical fiber to the house.
In particular, the total number of lines in the country today is estimated at about 4.8 million. Based on yesterday’s announcements, OTE will cover the 3 million lines, including the connections it will create within the PPP project “Ultra-Fast Broadband” (UFBB) in which it participates.
In combination with the announced investments of the other providers in urban areas and in the UFBB, the coverage of FTTH networks will reach 4.6 million lines. So the country will be covered by FTTH almost in its entirety, if the rural networks of the Rural Broadband project are included, which covers about 150,000 lines with VDSL connections.
How the FTTH expansion will proceed
Having started from 2018 to pass fiber optic lines to the house, the OTE group currently has the largest FTTH network in the country, with 560,000 lines. To achieve the ambitious goal of 3 million lines by the end of 2027, it increases its investments and accelerates the roll out.
By the end of 2022, the group is expected to cover one million homes and businesses with FTTH networks. By 2027 and the target of three million, the annual roll out will range between 300,000 – 500,000 lines, depending on the coverage areas and the speed of licensing by municipalities.
Upgrade connections
However, in addition to the expansion of the Fiber To The Home network, OTE announced another initiative, which has as its main goal the enhancement of the penetration of high speeds in households and businesses but also marks the “beginning of the end” of ADSL connections, offering speeds “up to 24 Mbps”.
In particular, OTE announced that it will upgrade, at no additional cost, the fixed internet speeds that Cosmote subscribers currently have in areas where fiber optics have not yet reached home, where this is technologically feasible.
In practice, this is a doubling of the nominal speeds, as each subscriber will be upgraded, completely free of charge, to the next commercially available speed. For example, anyone with VDSL 50 today will be upgraded to VDSL 100. Anyone with a 24-bit program will be upgraded to 50-bit. The same goes for all available packages (24, 50, 100).
The only condition, according to OTE executives, is that this be technologically feasible. For example, if a subscriber has opted for the 50Mbps commercial plan and his or her telephone connection technically gives the maximum available speed of 50Mbps, it will not be possible to upgrade from 50 to 100Mbps.
The free gear upgrade, if approved by the National Telecommunications and Post Commission (EETT), will begin in the first quarter of next year and is expected to be completed gradually in 2022. This period is necessary, as depending on network technology, different actions are required (in most cases the upgrade is done automatically and remotely, in other cases a router or card needs to be replaced, in others a technician needs to be consulted).
Competent sources note that Cosmote landline customers do not need to take any action, as each customer of the company who has the option of free upgrade will be informed separately. Within 2022 and after the approval of EETT, new fixed commercial programs with reduced prices are expected to be available, as the goal is in the long run in an area where it is possible to connect at speeds of at least 50 Mbps not to sell 24 Mbps packages.
Value to investors
The increase of the Group’s total investments to over 3 billion euros by 2027, which is initially expected to be expressed in an increase of annual investments by 100 million euros to about 600 million euros, has the approval of the main shareholder, Deutsche Telekom, and the Board of Directors of the company.
This is because it is estimated that the creation of the new network, in combination with the increase in demand for high-speed services, will enhance the value for shareholders, as it will consolidate the company’s position and strengthen its competitiveness for the coming decades, as well as the country is heading towards the “decalcification” of telecommunications.
Given that the increase in annual investment costs will come from OTE’s own funds, the group pledged yesterday that in the coming years OTE will continue to offer an attractive remuneration to its shareholders, divided between dividends and repurchase of own shares.
To address any deficits, OTE also announced that the surpluses created in the period 2018-2021 will be incorporated in the annual cash flows in the coming years, to support the overall remuneration policy of shareholders in the coming years.
In 2022, despite the increasing investments, OTE expects to provide a regular total remuneration to the shareholders at least equal to 2021. The Board of Directors will determine the remuneration policy of the shareholders for 2022 as well as for the following years on February 23, 2022, together with the approval of the financial statements of 2021.
Source From: Capital
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