DT Q1 net profit up 3.5%; branded customers rise in US

8 May 2013

German telecoms group Deutsche Telekom (DT) has reported net revenue of EUR13.785 billion (USD18.04 billion) for the first quarter of 2013, a decrease of 4.5% from EUR14.432 billion in the year-ago period, as international turnover dropped 6.7% and domestic revenue by 1.7% year-on-year to EUR7.487 billion and EUR6.298 billion, respectively. EBITDA was EUR4.079 billion for the first three months of 2013, down 7.2% compared to EUR4.397 billion in 1Q12, while adjusted EBITDA fell 4.3% from EUR4.482 billion to EUR4.288 billion over the same period. Meanwhile, the company said that reported net profit rose 3.5% year-on-year to EUR564 million, while adjusted net profit jumped 30.9% to EUR767 million. Investments in the first three months of the year reached EUR3.024 billion, up 39.4% from last year, mainly on expenditure for the acquisition of spectrum in the Netherlands. ‘With the merger of T-Mobile USA and MetroPCS, positive regulatory decisions on unbundled local loop (ULL) lines, and encouraging indications of how vectoring will be deployed in Germany, promising prospects are opening up for the group,’ DT noted in a press release.

DT’s Germany operating segment generated net revenue of EUR5.216 billion in Q1 2013, a decrease of 2.0% year-on-year, while adjusted EBITDA fell 3.8% to EUR2.255 billion, due to an increase in market investments, and reported EBITDA dropped by 8.9% to EUR2.118 billion. Net revenue in the Europe segment declined 6.7% to EUR3.172 billion in the first quarter of 2013, with sales negatively affected by the tough economic environment and regulatory decisions related to mobile termination rates. Adjusted EBITDA meanwhile decreased by 8.6% to EUR1.089 billion, with DT noting that more than half of this was attributable to regulatory decisions in mobile communications and special taxes for telecommunications companies in Hungary. Meanwhile, T-Mobile USA reported a 7.9% year-on-year fall in 1Q13 net revenue to EUR3.540 billion, with adjusted EBITDA for the three month period dropping 9.7% to EUR888 million.

In operational terms, at the end of March 2013 DT’s domestic wireless subscriber base stood at 37.005 million (up 5.4% from 35.100 million a year earlier), while retail fixed broadband connections increased by 0.6% year-on-year to reach 12.443 million and pay-TV accesses climbed 18.0% to 2.036 million. Internationally, the group’s US subsidiary ended the first quarter with 33.968 million mobile subscribers, an increase of 1.8% against the same date a year earlier, as the number of branded customers rose for the first time in 15 quarters. Across all of its European operations (excluding the UK) DT’s wireless voice customers numbered 61.503 million at 31 March 2013, up 2.2% from 60.208 million twelve months earlier, while retail broadband lines climbed 4.4% to 4.817 million.

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