CONTENTS OTE GROUP AT A GLANCE OTE Group at a glance................................................................................................................6 Shareholder structure and share information.................................................................................................8 OTE Group key financial and operational highlights...................................................................10 OTE Group operations..............................................................................12 OTE Group key developments...............................................................................................................14 Message from the Chairman ...................................................................................................................16 OTE SA: THE PARENT COMPANY OF THE GROUP Corporate governance..................................................................................................................................20 Corporate responsibility...........................................................................................................................30 Investments in infrastructure...........................................................................................................................34 Human resources...............................................................................................................39 OTE GROUP OPERATIONS FIXED-LINE ΟΤΕ SA Broadband services....................................................................................................................................48 Voice services......................................................................................................................56 Services for telecom operators...........................................................................................................................62 Fixed – line regulatory framework.....................................................................................................................68 International telephony, Internet & data (OTEGLOBE).........................................................................71 ROMTELECOM...............................................................................................................................74 -2- OTE Annual Report 2010 MOBILE TELEPHONY Cosmote Group.........................................................................................................................................82 Greece (Cosmote)................................................................................................................................84 Albania (AMC).........................................................................................................................................90 Bulgaria (Globul)...............................................................................................................................93 Romania (Cosmote Romania).............................................................................................................96 OTHER OPERATIONS IN GREECE AND ABROAD OTEestate.........................................................................................................................................102 Hellas-Sat.........................................................................................................................................105 OTESat-Maritel.........................................................................................................................................107 OTEplus.........................................................................................................................................109 OTEAcademy......................................................................................................................................111 Telekom Srbija.........................................................................................................................................114 ANNUAL FINANCIAL REPORT Annual financial report...............................................................................120 -3- OTE Annual Report 2010 -4- OTE Annual Report 2010 -5- OTE Annual Report 2010 -6- OTE Group at a glance OTE GROUP AT A GLANCE GREECE BULGARIA Fixed-line, mobile telephony, and IPTV Mobile telephony Number of Subscribers: Number of Subscribers: 3,919,767 Fixed-line: 3,856,794 Mobile telephony: 7,993,492 ALBANIA Fixed-line ADSL*: 1,149,162 Mobile telephony IPTV Services: 50,038 Number of Subscribers: 2,022,541 * Includes only those in operation, not the total number sold SERBIA ROMANIA Fixed-line, mobile telephony and Pay TV Fixed-line, mobile telephony, IPTV and satellite TV Number of Subscribers: Number of Subscribers: Fixed-line: 3,000,000 Fixed-line: 2,603,983 Mobile telephony: 5,549,000 Mobile telephony*: 6,849,468 Fixed-line ADSL: 543,000 Fixed-line ADSL: 1,013,445 IPTV Services: 59,000 IPTV and satellite TV services: 1,053,627 *OTE owns a 20% stake in Telekom Srbija *Including Zapp -7- OTE Group at a glance SerbiaS AlbaniaA RomaniaR GreeceG BulgariaB OTE Group -8- OTE Group at a glance SHAREHOLDER STRUCTURE AND SHARE INFORMATION SHARE INFORMATION OTE’s shares trade in the Athens and London Stock Exchanges (GDRs). As of September 2010, OTE’s shares ceased to trade in the New York Stock Exchange (NYSE). Following OTE’s delisting from the NYSE, OTE’s ADSs (American Depositary Shares) trade in the OTC (Over the Counter) market under the ticker HLTOY through the Level I ADSs program. OTE continues to report to the US Securities and Exchange Commission (SEC). ASE Symbol > OTE Bloomberg symbol > HTO GA Reuters symbol > OTEr.AT 31.12.2010 Capitalization > € 3,004.6 mn Annual-High > € 10.75 Annual-Low > € 5.20 Average Trading Volume > 1,098,932 -9- OTE Group at a glance 30.3% 30.0% 20.0% 10.1% 9.6% International Deutsche Hellenic Greek Other institutional investors Telekom State institutional investors Shareholder structure March 31, 2011 120 100 80 ΟΤΕ 60 SΧΚΕ* ΧΑ 0 Jan.10 Feb.10 Mar.10 Apr.10 May 10 Jun10 Jul.10 Aug.10 Sep.10 Oct.10 Nov.10 Dec.10 Jan.11 Feb.11 Mar.11 Price relative performance chart for Jan. 10 – Mar. 11 * Εuro Stoxx Telecommunications Index -10- OTE Group at a glance ΟΤΕ GROUP KEY FINANCIAL AND OPERATIONAL HIGHLIGHTS 2010 1,919.4 2010 0.08 **2009 2,168.0 **2009 0.84 **2008 2,356.4 **2008 1.24 Operating Income before Depreciation and Amortization* Earnings per Share (€) (€ mn) 2010 13.7% **2009 15.0% 28.1% 71.9% **2008 15.1% Other countries Greece CAPEX as % of Revenues Geographical distribution of revenues (2010)*** * Excluding the effect of voluntary retirement plans ** Adjusted amounts due to a change in accounting policy *** Before eliminations -11- OTE Group at a glance 2010 1,149 2010 20,785 2009 1,113 2009 22,309 2008 959 2008 20,027 OTE ADSL subscribers (000) OTE Group mobile telephony subscribers (000) 2010 1,013 2009 824 2008 651 RomTelecom ADSL subscribers (000) -12- OTE Group at a glance OTE GROUP OPERATIONS FIXED-LINE OPERATIONS IN OTHER OPERATIONS GREECE AND ROMANIA IN GREECE AND ABROAD In Greece, OTE Group is involved in real estate, sat- Greece ellite and maritime communications, professional OTE offers fixed-line, broadband, IPTV, data and training, etc. It is also present in Serbia through its leased line services in Greece. Through its wholly- 20% stake in the country’s incumbent telecommuni- owned subsidiary OTE Globe, OTE also offers inter- cations operator, Telekom Srbija. national wholesale telephony and data services. Romania OTE also owns 54% of RomTelecom, the telecom- munications incumbent in Romania, providing fixed- line, broadband, data, leased line, IPTV and satellite TV services to the local market. MOBILE TELEPHONY IN GREECE AND ABROAD (COSMOTE GROUP) Cosmote, OTE Group’s fully-owned subsidiary, is the leading provider of mobile telephony in Greece. The company also enjoys significant mobile telephony market shares in Albania and Bulgaria. Cosmote is the owner of Germanos SA, one of the largest distri- bution chains of technology products in SE Europe. -13- OTE Group at a glance 45.6% 35.4% 11.7% 7.3% Cosmote OTE RomTelecom Other Segment revenue contribution (2010)* 50.7% 34.4% 9.3% 5.6% Cosmote OTE RomTelecom Other Segment OIBDA contribution (2010)** * Before eliminations ** Operating income, depreciation & amortization, excluding the effect of voluntary retirement plans -14- OTE Group at a glance OTE GROUP KEY DEVELOPMENTS FEBRUARY 2010 NOVEMBER 2010 OTE proceeds with the launch of a series of pack- Mr. Michael Tsamaz, Managing Director of Cosmote, ages that combine talk time to fixed-line and mobile is appointed Chairman and CEO of OTE, in replace- phones, as well as broadband and IPTV services, con- ment of Mr. Panagis Vourloumis, who held these posts siderably enhancing thereby its portfolio of products from May 2004. Mr. Michalis Tsamaz joined the OTE and services. Throughout the year new packages were Group in 2001, initially as the Executive Vice-Presi- offered in order to meet the distinct needs of custom- dent of OTE International, CEO of OTE Investments ers. and CEO of OTE Globe, while at the same time he was in charge of the major transformation program AUGUST 2010 of OTE fixed-line. Before joining OTE, Mr. Tsamaz Aiming to reduce its operational costs, the complexi- held senior executive positions in multinational com- ty of its financial reporting and to focus on the trading panies, such as Vodafone and Philip Morris. of its shares in its