Deutsche Telekom reported a robust set of results in difficult circumstances, especially compared to some of its peer group in the troubled eurozone. CEO Rene Obermann boasted that the German incumbent was ‘performing very respectably compared with its competitors’ despite many challenges.
Obermann added: ‘We are keeping our word and providing a good deal of reliability to the market with very solid figures.’ Those figures included a net profit of €614m, up 76.4% on the year-ago quarter, on revenue of €14.38bn, though this was down by 0.7%. In the prior year, the quarter was hit by provisions for an early retirement program in Germany, while the current period saw €600m of depreciation and amortization charges against the T-Mobile USA subsidiary ‘ because of the planned sale of that unit to AT&T last year, which fell through, a similar charge was not recorded in Q211.
As for most carriers, the biggest positive trend was increased mobile data revenue, driven by rising penetration of smartphones. However, DT also noted ‘declining revenue from voice telephony, price changes imposed by regulatory authorities and intense competitive pressure’.
At the end of the quarter, the company had 35.47m mobile customers in Germany, compared with 35.1m at the end of Q1, with 18.58m being contract users, though it did conceded that ‘most of these new customers were added in the reseller segment, which generates lower average revenue per user’, and service revenue in the home market was ‘once again unsatisfactory’, with a 1% decline year-on-year.
On the bright side, growth in German mobile data revenue ‘continued unabated’, with a 19% increase to €484m- 29% of ARPU now comes from this source, up from 24% a year before.
In other parts of Europe, the operating companies ‘continued to hold their ground in a difficult environment between April and June 2012, proving to be particularly strong compared with their competitors,’ said the corporate statement although the firm warned that ‘with further deterioration in the economic situation of many countries, intense competitive pressure, and regulatory intervention, revenue and earnings still suffered’.
In the European segment, the company reported EBIT of €462m, down 0.6% year-on-year, on revenue of €3.58bn, down 5.9%. DT now has 60.81m mobile customers in Europe, up from 60.21m at the end of Q1, and smartphones now account for 60% of all devices sold, up from 43% a year ago. That helped push mobile data revenue up by 21.2% on last year.
However, there is still pressure on T-Mobile USA, where EBIT was down 54.4% to €396m on revenue up 8.7% to €3.82bn. The unit lost 205,000 customers during the quarter.