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US boosts Deutsche Telekom's revenue but profit falls

Zentrale Bonn Magenta T Aussen Aussenkennzeichnung CI CD Dach Nur zur redaktionellen Nutzung im direkten Zusammenhang mit der Deutschen Telekom AG
Richard Handford


The ability of T-Mobile US to hoover up new subscribers is driving its parent’s revenues but the picture on profitabilty was less pretty in Deutsche Telekom’s first quarter 2014 results.

Group revenue grew by eight per cent to €14.9 billion. Although net profit was three times higher than Q1 2013, the surge was due to the sale of internet firm Scout24. Adjusted net profit fell dramatically by 23.5 per cent to €587 million in the quarter.

Last week, T-Mobile US revealed it signed up 2.4 million new customers in the first quarter of 2014, as well as revising upwards full year forecasts for subscriber growth.

The US business also revealed revenue growth but posted a net loss as its aggressive ‘uncarrier’ promotions bit into the bottom line.

US revenue grew by 43.3 per cent to €5.1 billion. Excluding the inclusion of MetroPCS, it grew by 16.4 per cent. However, adjusted Ebitda decreased by 5 per cent (in € terms) compared to 2013.

Outside of the US, the picture for Deutsche Telekom was decidedly less rosy. The company’s German business reported a 0.2 per cent growth in mobile service revenue.

Even more disappointing, the European segment reported a 6.5 per cent drop in revenue to €3.1 billion, while adjusted Ebitda fell by 6.4 per cent to €1 billion.

But CEO Tim Hottges was upbeat, describing the decision to invest aggressively in the US as “right on the mark”. He also said the Q1 figures put the operator on track to grab leadership in Europe.


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