German telecoms giant Deutsche Telekom has reported slightly better-than-expected revenue and earnings for the first quarter but ongoing weaknesses at its key US subsidiary – T-Mobile USA – continues to be a concern. According to a Financial Times report, the firm reported revenues of EUR15.8 billion for the quarter, down 0.6 percent from a year ago, and adjusted EBITDA of EUR4.9 billion, up 1.6 percent over the year. Net profit came in at EUR767 million compared with a EUR1.1 billion loss in the first quarter of 2009 when profits were hit by of a large impairment charge at its UK unit (which has since been merged with Orange UK). “These results show we got off to a good start in 2010. We have further stabilised our operations – in some cases achieving substantial improvements – and implemented important steps in our new strategy at the same time,” said CEO Rene Obermann (pictured). Deutsche Telekom reiterated its 2010 guidance for adjusted EBITDA of EUR20 billion and free cash flow of EUR6.2 billion.

Despite strong performances elsewhere – at its German mobile business for example – investors were disappointed to learn that there was no evidence of a recovery at T-Mobile USA, which continues to struggle against larger US competitors such as Verizon Wireless and AT&T. The unit reported revenue of EUR3.8 billion for the first quarter, down 7.8 percent on the same period last year, partly because of currency swings but also due to customer losses: T-Mobile USA lost 77,000 customers to rivals in the quarter. Adjusted EBITDA at the US unit fell 5 percent to EUR1 billion. By comparison, T-Mobile Germany – the firm’s second-largest unit after the US – saw revenues rise 2.5 percent year-on-year to EUR2 billion.