DT reveals 2007 targets at AGM

4 May 2007

German incumbent telco Deutsche Telecom (DT) has confirmed its 2007 financial targets. CEO Rene Obermann told the annual shareholders meeting in Cologne that DT continues to lose fixed line customers, adding that it will be difficult to keep further customers from turning their backs on DT in the future, due to competitive imbalances he blames on German telecoms regulations, a possible reference to the recent u-turn by the regulator BNetzA over the opening of DT’s new VDSL network. He pointed out that in the meantime however, broadband internet connections were growing, and the company wants to sign up at least 40% of all new customers in this sector during 2007. Last year DT achieved less than half that figure. The main financial targets outlined by Obermann were planned adjusted operating profit of EUR19 billion (USD25.8 billion) and free cash flow of around EUR5.7 billion at the year-end. In terms of income from investments, DT is looking for nine digits. The CEO noted that the company is in exclusive negotiations with French internet company Neuf Cegetel regarding the sale of DT’s French subsidiary, Club Internet, and is hoping to close the deal in the first half of this year. He also said the sale of DT’s real-estate marketing company Sireo to previous partners has been agreed upon, as has the sale of two other real-estate assets. Obermann concluded that the goals were ambitious but achievable. ‘[They] won’t be reached without some effort,’ he said. ‘We will have to work hard in the current year to reach this goal.’

Germany, Deutsche Telekom (DT)