Friday, 17 August 2018

Deutsche Telekom looks to US expansion, as European revenues wobble

By Chris Kelly, Total Telecom
Thursday 09 August 18

DT has 172.5 million mobile customers and 19.3 million broadband customers in Europe and the USA

  Deutsche Telekom has posted a challenging set of financials for the first half of 2018, with net revenues, EBITDA and net earnings per share all falling on a year-on-year basis. Revenues stood at €36.2 billion for the period, down 3.3 per cent from €37…

 

Deutsche Telekom has posted a challenging set of financials for the first half of 2018, with net revenues, EBITDA and net earnings per share all falling on a year-on-year basis.

Revenues stood at 36.2 billion for the period, down 3.3 per cent from €37.5 billion in H1 2017. EBITDA shrank to €10.825 billion, while net earnings per share was down 11.4 per cent to €0.31 per share.

Despite the difficult set of financials, DT performed well on an operational level, adding 2.1 million broadband customers and 2.4 million mobile customers to its customer portfolio.

"It's a modest set of financial results with both revenue and EBITDA down. Operationally, the company fared much better and continues to see good growth in fibre and convergent services. It seems all telcos in Europe are pursuing a similar strategy in convergence but not all will be successful. The outlook remains challenging for Deutsche Telekom in light of the Liberty Global and Vodafone deal. Should it receive regulatory approval, the new entity will pose a formidable force both in Germany and Eastern Europe," said tech, media and telecoms analyst, Paolo Pescatore.

 

US growth highlights importance of Sprint merger

As the spectre of the newly formed Liberty Global / Vodafone entity looms over DT's European operations, the company is looking to consolidate growth in the US off the back of its own proposed merger with Sprint.

Second quarter revenues at DT's US subsidiary rose 6.1 per cent to $7.8 billion, with EBITDA climbing by 5.1 per cent to a robust $3 billion. T-Mobile US reported 1.6 million new customers between April and June 2018, with the company's total number of subscribers now standing at 75.6 million.

The strong growth in T-Mobile, particularly since it announced plans to merge with its competitor, Sprint, illustrates just how important it is that the deal completes as expected later this year.

 

Also in the news: 

Germany to create €2.4 billion digital infrastructure fund 

Deutsche Telekom rolls out 100Mbps broadband to 35,000 new customers

German watchdog ramps up rhetoric against US web giants

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