12 April 2018
| Jason Mcgee-Abe
OTEGLOBE has recently announced a 15% increase in EBITDA as part of its 2017 financial results, COO George Nikoloudis explains to Capacity how the carrier has reached €333.5 million in revenues and 2.9 billion total traffic billed minutes.
JMA: What are the key conclusions that can be
drawn from your financial report?
GN: Our EBITDA margin was significantly improved in 2017
when compared to 2016 thanks to the continuing strong
performances in Europe and Asia, where our recent investments
in AAE-1 and the upgrade of our European backbone network with
new fibre lease and next-generation technologies have started
yielding results. We have created cash and cash equivalents
(bonds) of more than €100 million, despite our heavy
investment in new network infrastructure. OTEGLOBE also remains
one of the few Greek companies that stay "loan free".
OTEGLOBE reached €333.5 million in revenues in 2017
recording a 15% increase in EBITDA. This was a result of the
company’s previous years’ investments
and the maintenance of high revenues in international voice
services. 80% of 2017 revenues came from international
JMA: There was a price decrease in
international wholesale on OTEGLOBE’s revenues,
what were the main reasons for this?
GN: Stiff competition in a shrinking market, combined with
new regulatory frameworks to reduce termination rates in EU
markets led to significant price erosion in both international
data and voice wholesale business, with a strong negative
impact on companies’ revenues and profitability.
In this challenging and unfavourable environment, OTEGLOBE
achieved not only to operate fluently, but increase its
profitability with a positive, healthy EBITDA margin.
JMA: In the
management report it says that "the company successfully
addressed significant challenges, such as: fiercer competition
in Greece by international wholesale companies with alternative
infrastructure connecting the country with neighbouring
markets". Please could you name a couple of the ways OTEGLOBE
has differentiated itself from this
GN: OTEGLOBE is continuously trying to differentiate from
the competition not only in Greece but also in Europe by:
leveraging on its strong and innovative network infrastructure,
expanding towards new markets and building strong partnerships
with other well-known carriers worldwide.
Our company is the only carrier that connects Greece and the
Balkans to Western Europe with four different routes, two
routes transiting Balkan countries and another two routes
transiting Italy. During 2017 we expanded and redesigned our
network by leasing new fibre across Europe and now have more
than 21,000km of own dark fibre connecting all the major
At the same time we have expanded our data business to new
markets in Asia, M. East and Africa by investing in a new
intercontinental submarine cable, Asia Africa Europe -1, that
connects Hong Kong, Singapore and other countries to Europe and
that became fully operational in the second half of 2017.
OTEGLOBE is a full member and landing party in AAE-1,
with its international cable landing station at Chania
– Crete. Traffic from Asia is routed through AAE-1 new
subsea cable to OTEGLOBE’s landing station at
Chania, and from then on through OTEGLOBE’s
diverse and protected terrestrial network to Europe, ensuring
resilience and diversity in the region.
Finally having become the leading regional carrier in
Southeast Europe, OTEGLOBE has built strategic partnerships
with other telecom providers worldwide to offer "OFF-NET"
services beyond its network’s footprint. A
significant portion of OTEGLOBE’s data revenues
can be attributed to off-net services, from places where
OTEGLOBE does not have own infrastructure and relies on its
partners networks to offer the end to end service.
JMA: This report
also says another challenge was: "Delay or even suspension of
the implementation of strategic development plans in the
broader markets of Middle East and North Africa due to the
volatile environment and political instability in certain
countries, e.g. Syria, Libya." Please could you provide me with
updated timeframes if possible?
GN: During the previous years we have made plans to partner
with other carriers to build new routes connecting Middle East
and Africa to Europe and provide much needed diversity on the
existing subsea cables. Unfortunately due to the turmoil in
countries in the region i.e Libya, Syria these plans had to be
postponed or even canceled. The situation in Libya has improved
lately and I’m happy to report today that the
Silphium cable connecting Libya to Greece will resume its
commercial operation within 2018.
traffic billed by the company network was 2.9 billion minutes
(2.6 billion in 2016), what is your initial prediction of how
this traffic may increase in 2018? What do the January and
February 2018 figures suggest?
GN: We expect a significant increase of international voice
traffic within 2018. Part of it because of the new EU
regulation that diminishes roaming fees within EU networks,
hence boosting the voice traffic across Europe, another part
due to increase of IP and hubbing business models that make
global destinations such as i.e Africa and Latin America
accessible to a regional carrier like OTEGLOBE. January and
February results are not indicative, high season in Greece and
Southeast Europe is during the second and third quarter of each
year, so we will have a clear picture of the new traffic trends
during the last quarter of 2018.
JMA: How this
increase was as a result of both the upgrade of the
international network with the new IP capabilities and the
targeting of hubbing services that reinforced the
company’s commercial activity and led to the
expansion into new developing markets, such as Africa and Latin
GN: During 2017 OTEGLOBE carried around 5.8 billion minutes
(in/out) over its IP voice platform, not only supporting voice
roaming to Greece but also to other remote destinations in i.e.
Africa or Latin America. The expansion of our hubbing
activities helped us reach these new destinations and maximise
the potential of our international voice network and IPX
platform. Moreover as an important voice hub in Southeast
Europe OTEGLOBE maintains more than 200 voice bilateral
commercial agreements with major wholesale carriers around the
world in order to offer exceptional voice services
JMA: What are the
main wholesale areas of focus for OTEGLOBE in
GN: Maintaining our leading role in Greece and the wider
area of Southeast Europe is our primary target. By investing in
AAE-1 we aim to enhance and strengthen our position in the
developing markets of the Middle East, North Africa and
Southeast Asia to make Greece the alternative hub in the
Mediterranean region. In our Voice Business we will continue
placing emphasis on international hubbing services to reach
remote destinations and maximise the benefits of our
international voice (IPX) network. And last but not least
we’ll keep on reducing our operational costs to
cope with price erosion and remain competitive in a tough