Freenet reports 3Q losses as sales fall

16 Nov 2007

German cellco and ISP Freenet has reported a loss for the three months ending 30 September 2007 following declining sales. The net loss was EUR22.7 million (USD33.3 million), from a profit of EUR37.9 million in the same period last year, the company said in a statement. Sales shrank to EUR470 million euros from EUR507.4 million in 3Q 2006, less than an analysts’ average estimate of EUR474 million compiled by Bloomberg. Freenet added 50,000 DSL subscribers in the quarter, taking its total to 1.27 million.

Freenet was formed in March this year by the merger of wireless reseller Mobilcom and its unit. Until recently, Freenet CEO Eckhard Spoerr had rejected calls from shareholders to break up the company. Earlier this week Freenet revealed it had started ‘concrete’ talks with German MVNO Drillisch, its largest shareholder, and ISP United Internet about a partnership that would hand Freenet’s wireless unit to Drillisch. which has been trying to break up Freenet and merge it with its mobile phone division for over a year. In September, United Internet set up a venture with Drillisch, saying they wanted to ‘keep all options open’ including a possible takeover of Freenet. United Internet CEO Ralph Dommermuth said last week that the venture is ‘a long-term plan.’

Germany, freenet, mobilcom, United Internet (1&1)