Greece's incumbent phone operator, Hellenic Telecommunications Organization SA (OTE), said Monday it would cut its 2009 dividend as part it efforts to restrain costs and in light of Greece's protracted economic and fiscal crisis.

In a statement to the Athens stock exchange, OTE said it would propose a lower 2009 dividend to EUR0.19 per share to shareholders at its annual general meeting on June 16.

Earlier this year, the company had originally proposed an EUR0.50 per share dividend.

"Given the change in circumstances as a result of the austerity measures which have been introduced as a consequence of the financing problems faced by the country, as well as the continuing uncertainty about macroeconomic developments, (OTE) has decided... to intensify its efforts to save on outlays," the company said in the statement.

After months of turmoil in the financial markets and facing rising borrowing costs, the Greek government last month agreed to an EUR110 billion loan package from the European Union and the International Monetary Fund.

In exchange for the loan, however, the government has adopted a three-year austerity and reform plan that includes new taxes on companies and steep public sector spending cuts.

The measures are seen weighing on consumer spending and pushing the economy into a deep recession this year.

On May 12, OTE reported a 76% drop in first-quarter net profit to EUR65.8 million on weak sales and higher taxes.

-By Alkman Granitsas, Dow Jones Newswires; +30 210 331 2881; alkman.granitsas@dowjones.com
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