T-Mobile-parent Deutsche Telekom appeared to take investors by surprise yesterday by issuing a profits warning caused by weakening performance at its business units in the US, UK and Poland. The German telecoms giant said adjusted EBITDA for the group would be between 2 and 4 percent lower this year due to unfavourable conditions. According to the Financial Times, the firm now expects EBITDA of between EUR18.7 billion and EUR19.1 billion compared to its earlier guidance (made less than eight weeks ago) of EUR19.5 billion. It added that adjusted EBITDA for the first-quarter – which it is scheduled to report on 7 May – will drop 5 percent to EUR4.5 billion. Revenues are expected to remain “almost stable” and the company said in a statement that the full-year cash flow projection of  EUR6.4 billion will “lay part of the foundation for a shareholder-friendly dividend policy.” CFO Timotheus Höttges said: “We are currently in difficult times for rapid, comprehensive and clear communication. For that reason, we have decided to inform our shareholders as early as possible.”

The FT notes today that the profits warning is the first from a large European operator group this year and came as a shock to investors that had regarded telecoms as a “safe haven” in the downturn. Deutsche Telekom cited a fall in ARPU and the cost of 3G rollout for the problems at T-Mobile USA, and unfavourable currency fluctuations for the deteriorating situation at T-Mobile UK and PTC, its Polish mobile arm. T-Mobile UK, for example, recorded a significant drop in revenues of around 21 percent due to the fall in the value of the UK pound. The FT notes that the profits warning could ignite further speculation on the future of T-Mobile UK and T-Mobile USA, which are both deemed to be struggling against larger rivals in their respective markets. Shares in Deutsche Telekom dropped by as much as 10 percent in response to the warning.