We feel the urge to express optimism through our creations. We look upon our future with confidence. OΤΕ Group 1 2 OΤΕ Group OΤΕ Group 3 4 OΤΕ Group OΤΕ Group 5 ΟΤΕ Group Greece Romania Bulgaria Albania Serbia Montenegro 6 OΤΕ Group OTE Group GREECE Fixed-line and mobile telephony Fixed-line subscribers: 4,992,000 ADSL subscribers: 1,124,000 Mobile telephony subscribers: 9,218,000 ROMANIA Fixed-line and mobile telephony Shareholders Structure, March 31, 2010 Fixed-line subscribers: 2,741,000 ADSL subscribers: 807,000 30% Deutsche Telekom 29.4% Foreign Institutional Investors Satellite TV subscribers: 884,000 20% Helenic State Mobile telephony subscribers: 6,921,000 10.4% Other BULGARIA 10.2% Greek Institutional Investors Mobile telephony Subscribers: 3,902,000 ALBANIA Mobile telephony Subscribers: 1,909,000 SERBIA Fixed-line and mobile telephony OTE owns 20% of Telekom Srbija • Through Germanos, OTE Group operates the most efficient telecoms and technology retail distribution network in SE Europe with 1,075 stores. • In May 2009, Cosmote completed the sale of its mobile operations in FYROM. • In October 2009 Cosmote completed the acquisition of the mobile telephony operator in Romania, Zapp. OΤΕ Group 7 8 OΤΕ Group Group Structure Germanos SE Europe (100%) Globul ΟΤΕ GLOBE Bulgaria Greece (100%) (100%) Zapp Cosmote Hellas Sat OTESat-Maritel CosmoONE ΟΤΕ S.A. Romania* Greece Greece Greece Greece Greece (100%) (100%) (99%) (94%) (62%) OTE Investment AMC ΟΤΕestate ΟΤΕAcademy OTEPlus Services Albania Greece Greece Greece Greece (95%) (100%) (100%) (100%) 100%) Cosmote RomTelecom Romania (30%) Ρουμανία (70%) (54%) Group Structure Fixed-line Telephony Mobile Telephony Other Operations * Cosmote completed the acquisition of Zapp in October 2009 OΤΕ Group 9 OTE Group Key Financial and Operational Highlights Operating Income before Depreciation and Amortization Earnings per Share (€)** (€ mn), (OIBDA)* 2009 0.82 2009 2,125.9 2008 1.23 2008 2,320.9 2007 1.35 2007 2,240.8 Net Income (€ mn)** Revenue Breakdown by Region 2009 (gross) 2009 404.0 72.2% Greece 2008 601.8 27.8% Other Countries 2007 662.6 * Excluding impact of voluntary retirement programs and employee exit schemes (cost of €22.1 mn in 2007, €50.2 mn in 2008 and reversal of 30.3 in 2009) ** Figures of 2007 include non-recurring gains from the sale of InfOTE 10 OΤΕ Group OTE ADSL Subscribers (000) Mobile Telephony Subscribers (000) 2009 1,124 2009 21,950 2008 972 2008 20,027 2007 825 2007 15,546 RomTelecom ADSL Subscribers (000) 2009 807 2008 651 2007 360 OΤΕ Group 11 OTE Group Operations OTE GROUP OTHER OPERATIONS IN GREECE AND ABROAD Consisting of the parent company OTE SA and its subsidiaries, the Group In Greece, the Group is involved in a range of activities, notably in offers fixed-line, broadband, data, leased line and mobile telephony real-estate, international wholesale telephony, satellite and maritime services in Greece and Romania, as well as mobile telephony services in communications, and professional training. The Group is also present in Albania and Bulgaria. The Group is also present in Serbia through its 20% Serbia through its 20% stake in the country’s incumbent operator Telekom stake in the country’s incumbent operator, Telekom Srbija. OTE Group is Srbija. additionally involved in a range of activities in Greece, notably in real- Strategy: Development of synergies between the companies of the estate, satellite telecommunications and professional training. OTE Group. FIXED-LINE OPERATIONS IN GREECE (OTE SA) OTE SA is the incumbent telecommunications operator in Greece, offering fixed-line, broadband, data and leased line services. Strategy: Development of competitive bundled products (broadband Internet, voice, mobile telephony and IPTV), adoption of a dynamic tariff policy, investments in infrastructure, increased efficiency and competitiveness. MOBILE TELEPHONY OPERATIONS IN GREECE AND ABROAD (COSMOTE GROUP) Cosmote, fully-owned by the OTE Group, is the leading provider of mobile communications in Greece. The company also enjoys significant mobile telephony market shares in Albania and Bulgaria, and is expanding rapidly in Romania. Cosmote is also the owner of Germanos SA, the largest distributor of ICT (Information & Communication Technology) products in SE Europe. Strategy: Maintain market-leading performance, increased focus on reducing operating costs in Greece and abroad. FIXED-LINE OPERATIONS IN ROMANIA (ROMTELECOM) OTE owns 54% of RomTelecom, the main telecommunications operator in Romania, providing fixed-line, broadband, data, leased line and satellite TV services to the local market. Strategy: Development and promotion of broadband services, introduction of new bundled products, competitive tariff policy, investments in infrastructure, emphasis on restructuring and reduction of operating costs. 12 OΤΕ Group Segment Revenue Contribution (2009) * 45.5% Cosmote 36.2% OTE 12.1% RomTelecom 6.2% Other Segment OIBDA Contribution (2009) ** 50.3% Cosmote 32.5% OTE 12.3% RomTelecom 4.9% Other * Gross ** Operating income before depreciation and amortization excluding impact of voluntary retirement programs and employee exit schemes OΤΕ Group 13 2009 At a Glance OTE GROUP: ACQUISITIONS, SALES AND ORGANIZATIONAL During the same month OTE offered Conn-x services to customers of the CHANGES KATEXOCHIN package (a special program addressed to residential In April, Cosmote increased its share capital participation in AMC by customers who own a country home) for the time period that they are 12.6% (this stake was formerly held by the Albanian State) for a total cost visiting their country home. of €48.4 mn. Following this transaction, Cosmote’s participation in AMC In August OTE presented the new OTE business flat rate packages for now stands at 95%. small and medium companies. These packages combine low tariffs in In May, Cosmote completed the sale of its subsidiaries Cosmofon Mobile telephony services with the convenience of one single bill. Telecommunications AD Skopje (through its 100% subsidiary OTE MTS In October, and through its Conn-x package, OTE offered unlimited Holding BV) and Germanos Telecom AD Skopje, to Telekom Slovenije. Internet access at 8Mbps and unlimited calls to all fixed-line numbers in In July, Deutsche Telekom AG increased its share capital participation Greece. in OTE through the acquisition of shares and the respective voting rights. In October, OTE offered the “Conn-x at work Start Up” program for small Following this transaction, Deutsche Telekom’s stake in OTE’s share capital and medium sized companies. Addressing small businesses, the “Conn-x stands at 30%, while the Hellenic Republic (which sold its shares and the at work Start Up” program combines Internet access and web presence respective voting rights) now holds a 20% in OTE’s share capital. services (web & mail hosting) at attractive rates. In July, Cosmote signed an agreement to buy Telemobil S.A. (Zapp) in During the same month OTE’s three sales channels (OTEshops, the 134 Romania, which is the oldest mobile telephony company in Romania and call center and the electronic shop of www.oteshop.gr) were grouped has CDMA 450 MHz and 3G 2100 MHz licences. under the same brand of OTESHOPPING. In September, the voluntary retirement of 601 OTE employees was completed, within the context of the 2005-2006 voluntary retirement plan AWARDS (in accordance with Law 3371/2005 and Law 3762/2009). To meet In April the OTE Investor Relations team garnered four awards in four company needs in terms of personnel, as a result of the above voluntary different categories at the annual “Capital Link Greek Investor Relations retirement program, OTE recruited 87 new employees with expertise in Awards” ceremony. various fields. In April, ΟΤΕ won the bronze award for “Best Annual Report 2007” at the European Design Awards, which took place in May 2009, in Zurich. OTE SA: NEW PRODUCTS AND SERVICES During the same month OTE received a silver level distinction for its CSR In January, ΟΤΕ launched the “my E-Bill” service which allows customers program at the first CR Index in Greece. to manage and pay their OTE bill online. Also in April, OTE’s 2007 Annual Report received the highest distinction, In February, OTE launched the new flat-rate packages Business Call & the “EVGE Award” at the Greek Graphic Design and Illustration Awards Business Call Premium from the OTE business family of products. The new (“EVGE”) that took place in Athens. Business Call program offers companies low tariffs, depending on their In May, OTE and Cosmote garnered awards for its CSR program at the bill and the new Business Call Premium product for large corporations CEO & CSR Money Conference 2009. that have many phone connections, offers discounts based on their total In December, OTE Chief Operating Officer, Mr. Iordanis Aivazis, was monthly traffic from all the connections of the monthly bill. voted Best CFO for Investor Relations, by European analysts and investors During the same month the company launched Connx-TV. at the 2009 Extel Survey Awards. In March OTE introduced the new fixed-line service MusicCall. With this service, OTE provides its customers the opportunity to choose the music, that callers, who are dialling in, will be listening to. In July the company offered two new fixed-line flat rate packages “Fixed- line 180” and “Fixed-line and Mobile 300” for local, long-distance calls and calls to mobile phones. 14 OΤΕ Group OΤΕ Group 15 16 OΤΕ Group Contents OTE GROUP Message from the Chairman 18 ΟΤΕ SA OPERATIONS