Deutsche Telekom profits hit by BT, as non-US revenues fall

Deutsche Telekom, T-Mobile, BT

Deutsche Telekom has posted surging annual revenues driven by “unabated growth” in the US, but its shareholding in BT saw profits slide.

The Germany-based operator reported revenues of €73.1 billion in 2016, up 5.6 percent year-on-year, and adjusted EBITDA up 7.6 percent to €21.4 billion.

However, reported net profit slid 17.8 percent to €2.7 billion as it booked an impairment loss on its 12 percent shareholding in BT.

Its UK rival was hit by a crash in its share price following an accounting scandal in Italy and the post-Brexit sterling plunge.

Deutsche Telekom said revenue growth had been driven by a rise in cash capex of 1.3 percent to €11 billion for the first time.

“Once again, we have reliably delivered on our promises,” said Tim Hottges, Chief Executive of Deutsche Telekom.

“The basis of our strong growth remains the high investment in our networks.”

T-Mobile US was the standout performer with its “unabated growth” making it the “star on the US mobile market”.

In 2016 it increased its total number of customers by 8.2 million to 71.5 million and recorded 4.1 million branded postpaid net adds.

US revenues climbed 16.3 percent to $37.3 billion as a result, with EBITDA up 28.7 percent to $9.5 billion.

Deutsche Telekom said the growth, down to its “systematic network build-out and the innovative Un-carrier initiatives for rate plans and offers”, would continue into 2017 with 2.4 to 3.4 million net adds forecasted.

Revenues in its home German market dropped 1.7 percent to €22 billion due to lower mobile terminal equipment revenue and the continued decline in traditional telephone business.

However, it achieved its highest ever sales of fiber-optic based lines with 674,000 net adds in the fourth quarter.

The number of fiber-optic lines climbed 56 percent to 2.4 million year-on-year.

In the rest of Europe LTE network coverage rose to 109 million people, up 13 percent on 2015, with the number of broadband lines reaching 5.6 million.

However, revenues for the region dropped 2.1 percent to €12.7 billion.

Its T-Systems arm recorded order entry of €6.6 billion, up 17.8 percent on 2015 and helped by two high-volume contract extensions with Deutsche Post DHL and Shell.

However, sales at the enterprise unit dropped 2.9 percent to €6.5 billion.

More News

Telia buys cloud provider to boost SME presence Telia buys cloud provider to boost SME presence Telia has acquired Finland-based cloud provider Nebula Top Oy as it bids to expand its offering to small businesses. More detail
Orange Business Services looks to acquire French consulting, SI company Orange Business Services looks to acquire French consulting, SI company Orange’s enterprise arm is in exclusive negotiations to acquire a controlling stake in France-based consulting and systems integrator player Business & Decision. More detail
EC accuses Altice of jumping the gun in PT takeover EC accuses Altice of jumping the gun in PT takeover The European Commission has accused Altice of breaching EU rules by taking over Portugal Telecom before the deal was formally approved. More detail
Nokia finally gets green light for A-L Shanghai Bell joint venture Nokia finally gets green light for A-L Shanghai Bell joint venture Nokia has signed a definitive agreement with China Huaxin to merge the vendor's China business with Alcatel-Lucent Shanghai Bell. More detail
UK consumers able to switch mobile operator by SMS under Ofcom plans UK consumers able to switch mobile operator by SMS under Ofcom plans The UK regulator is consulting on plans that would allow customers to switch mobile operator by sending a standard free SMS message to their current provider. More detail
    

@eurocomms