Deutsche Telekom ups full-year guidance on US merger boost

German telecoms operator Deutsche Telekom boosted its guidance for the full year on Thursday after reporting a jump in second-quarter revenues thanks to its acquisition of US rival Sprint.

The Bonn-based company said it now expected adjusted earnings of 34 billion euros ($40 billion) for 2020, up from a previous forecast of 25.5 billion euros.

Between April and June, group revenues climbed 37.5 percent year-on-year to 27 billion euros, it said in a statement.

The $26-billion merger between Deutsche Telekom’s US unit T-Mobile and Sprint was completed in April, allowing Sprint and its millions of US customers to be included in the German group’s second-quarter figures.

“The merger in the US is a historic step for the group,” chief executive Tim Hoettges said.

Deutsche Telekom booked a net profit of 754 million euros for the quarter, a fall of 20 percent compared with a year earlier.

Deutsche Telekom said it had already indicated that “the costs of integrating the two companies would have a negative impact on net earnings.”

The coronavirus pandemic had a “limited impact”, it added, primarily in the corporate customer unit where new orders slowed.

Mobile roaming revenue also fell on the back of travel restrictions.

Deutsche Telekom is now the second-largest US mobile telecoms provider in terms of customers, with more than 98 million users, it said.

The Sprint brand has been retired and replaced with T-Mobile.

In its German home market, the company reported 87,000 new broadband customers, “its most successful quarter in broadband business in two years,” it said.

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