Deutsche Telekom reports 3Q results and announces sale of Media&Broadcast unit

8 Nov 2007

German incumbent telco Deutsche Telekom (DT) has reported its results for the three months ended 30 September 2007. Adjusted net profit for the third quarter rose to EUR1.06 billion (USD1.55 billion), from EUR990 million a year earlier, on the back of increased overall revenues of EUR15.69 billion, up from EUR15.48 billion in the corresponding period in 2006. EBITDA also grew to EUR5.16 billion, from EUR5.10 billion a year ago. The main driver was the T-Mobile division, which posted sales of EUR8.69 billion, up from EUR7.98 billion in 3Q 2006, with EBITDA climbing to EUR2.94 billion from EUR2.69 billion. T-Mobile USA performed particularly well, sigining up 857,000 new customers in the third quarter, against analysts’ forecasts of 782,000 additions. In total, the company added 1.914 million new mobile customers, with 219,000 coming from T-Mobile UK. In the highly competitive German market, DT lost 497,000 fixed line customers in 3Q 2007, but broadband subscriptions were boosted by 480,000 additions.

DT reiterated its full year 2007 adjusted EBITDA forecast of EUR19 billion, and predicted that EBITDA would remain stable throughout 2008. Industry-watchers had forecast higher EBITDA in 2008, but DT said that its earnings would be affected by investments in its US mobile network as well as its domestic broadband infrastructure. ‘We are fully on track to meet our targets for 2007,’ said CEO Rene Obermann.

Meanwhile the telco has said it is selling its Media & Broadcast (M&B) unit to France’s TDF for EUR850 million, in a deal expected to close early in 2008. M&B is a service provider for the media sector and transmits television and radio programmes on behalf of 850 national and 110 international broadcasting companies. It employs around 1,250 people and earned EUR500 million in revenues in 2006, with operating profit of almost EUR100 million.

Germany, Deutsche Telekom (DT), T-Mobile UK, T-Mobile US