DEUTSCHE TELEKOM : article FT

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04 nov. 2010 •12:17

Published: November 4 2010 09:30 | Last updated: November 4 2010 09:30

Deutsche Telekom on Thursday offered the first glimmers of hope for its long-struggling US mobile-phone business when it said that T-Mobile US added customers in the third quarter after shedding them earlier in the year.


Deutsche Telekom Q3 2010 Sales Net profit Earnings per share Dividend
€15.6bn €1.0bn €0.23 –
↓4.1% ↑7.9% ↑4.5% –


The number of mobile-phone customers in the US hit 33.8m, 1.2 per cent more than the 33.4m recorded in the same period in 2009, as a surge in clients with pre-paid deals made up for a decline of those with classic contracts.

Deutsche Telekom is only the fourth-largest mobile-phone operator in the US and it has seen its business come under scrutiny as rivals have more quickly rolled out new high-speed networks for mobile internet and new so-called smartphones.

Chief executive René Obermann has come under pressure to improve Deutsche Telekom’s US performance and last year bet that he could do this through improved investment and marketing rather than acquisitions or mergers.

As a result, Deutsche Telekom was able to slow erosion of mobile revenues in the US. Third-quarter revenue for mobile services fell only 0.4 per cent in annual comparison with $4.6bn, while total US revenues dipped 0.5 per cent to $5.4bn.

However, higher marketing costs to attract new customers for the mobile internet helped diminish the unit’s earnings before interest, taxes, depreciation and amortization, adjusted for one-off factors, by 14.8 per cent to $1.3bn.

The recent fall in the value of the dollar helped Deutsche Telekom make good some of these local-currency woes. US revenues in euros rose 10.2 per cent to €4.1bn ($5.8bn), while underlying profit dropped only 5.6 per cent to €1.0bn.

Following the de-consolidation of T-Mobile UK – another struggling foreign mobile operation which Deutsche Telekom last year merged with France Telecom’s Orange UK – Deutsche Telekom’s total quarterly revenues declined 4.1 per cent to €15.6bn.

Underlying profit fell 9.2 per cent to €5.0bn, although this total was down only 6.1 per cent with T-Mobile UK factored out of the 2009 comparison period. Quarterly net profit hit €1.0bn, compared with €959m a year earlier.

But the company, which counts the German government its biggest shareholder, confirmed its full-year forecast by saying it expected adjusted ebitda to come in “at around €20bn” and free cash-flow to hit “at least €6.2bn”.