Loss of T-Mobile UK weighs on Deutsche Telekom earnings

5th August 2010, Comments 0 comments

Deutsche Telekom, the biggest European telecommunications operator, posted weaker second quarter results on Thursday after it stripped out contributions from British mobile unit T-Mobile UK.

Net profit fell by nine percent to 475 million euros (625 million dollars), while adjusted earnings before interest, tax, depreciation and amortization (Ebitda), its benchmark, lost five percent to 5.01 billion euros, a statement said.

Deutsche Telekom and France Telecom have set up a joint venture with their respective mobile operations in Britain, T-Mobile UK and Orange UK.

The former's results are thus no longer integrated into Deutsche Telekom's figures, a factor in a four percent drop in sales to 15.53 billion euros.

When that development was stripped out of the calculation, group sales gained a slight 0.9 percent, Deutsche Telekom said as it welcomed a stabilisation of its domestic market.

The former German monopoly has been faced with a flood of fixed line clients cancelling their contracts.

Fixed-lines sales decreased by 2.9 percent in the second quarter, the slowest decline since 2008, the statement said.

Around 1.7 million clients have dropped such service in the past year, however.

Sales of the group's T-Mobile USA division gained seven percent over the same period meanwhile, a welcome stabilisation amidst tough competition in one of Deutsche Telekom's most important foreign markets.

© 2010 AFP

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