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Earnings: Deutsche Telekom Profits Plunge On Fixed Customer Decline, Mobile Holds Up

By Ingrid Lunden - Thu 09 Aug 2007 01:10 AM PST

Half-year results from Deutsche Telekom (FRA:DTE) released today. For the period that ended June 30, the German incumbent operator posted a 40 percent drop in its net profits to 608 million euros ($836 million) from 1.02 billion euros ($1.4 billion) a year earlier, due largely to customers migrating to competitors in its domestic market—it lost 516,000 fixed-line customers in Q2, and has lost 1.1 million customers overall in H1 2007, one of the worst records in Europe this year. Still, the numbers beat analysts’ forecasts, says Reuters. Earnings before eliminations rose to 4.9 billion euros ($6.75 billion), boosted by one-off items such as the sale of Club Internet in France and Ya.com in Spain. The good news is mobile content and services: non-messaging data usage was up 44.5 percent to 0.9 billion euros ($1.2 billion), which is a third of total data revenues or 5 percent of overall revenues...and T-Mobile said within that it is seeing roughly equal revenues for the U.S. compared to Europe.

--The mobile business has been progressing at a clipping pace, especially internationally. T-Mobile saw double-digit revenue growth of 10.5 percent to 17.1 billion euros ($23.5 billion). Total customers stand at 111.8 million, a 10.6 percent increase. The company plans to buy Orange in the Netherlands to boost its presence in that market.

--Mobile data growing up: In a press conference this morning, CEO Rene Obermann reiterated that T-Mobile’s mobile Internet initiatives are a key focus for the company. Web’n’walk customers grew to 2.4 million, adding 500,000 customers in H1. Total data revenues were 2.6 billion euros ($3.6 billion), up 31.5 percent and representing 15 percent of total mobile revenues on global basis; in the U.S. alone, data revenues were just under 1 billion euros ($1.4 billion).

--The company noted in its presentation that it also intends to sell off media and broadcast assets but did not elaborate further.

Earnings (pdf) | Webcast | Webcast presentation (pdf)

Posted in: Companies, T-Mobile, Countries, Europe, Germany, Money, Earnings



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paidContent:UK covers the business of digital media for the U.K. and European markets.

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Staci D. Kramer
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